Kenorland Minerals Converts 20% Joint Venture Interest in Frotet Project to 4.0% NSR Royalty
Kenorland Minerals Converts 20% Joint
Venture Interest in Frotet Project to 4.0% NSR
Royalty
Vancouver, British Columbia--(Newsfile Corp. - January 16, 2024) -
Kenorland Minerals Ltd.
(
TSXV:
KLD
) (
OTCQX: KLDCF
) (
FSE: 3WQ0
) ("
Kenorland
" or the "
Company
") is pleased to announce that
it has entered into a definitive agreement dated January 15, 2024 (the
"Agreement")
with Sumitomo
Metal Mining Canada Ltd.
("Sumitomo")
to exchange the Company's 20% participating interest in the
Frotet Project (the
"Project"
), located in Quebec, for a 4.0% net smelter return royalty (the
"Frotet
Royalty"
) on all minerals extracted from the Project. The transaction results in Sumitomo consolidating
100% ownership of the Project and termination of the joint venture agreement dated April 17, 2018
between Kenorland and Sumitomo.
Zach Flood, President and CEO of Kenorland commented,
"Today marks the beginning of an exciting
new chapter as we exchange our participating project interest for a substantial royalty interest covering
the Frotet Project. This includes the high-grade Regnault gold discovery, which has been steadily
advancing under our joint venture with Sumitomo over the past year. This strategic transaction is
poised to deliver long term value for our shareholders and allows Kenorland to allocate its capital
towards generating new discoveries elsewhere while preserving substantial upside in the Frotet Project
and the Regnault gold discovery. Meanwhile, under consolidated ownership, Sumitomo can advance
the development of the Project utilizing the resources of a larger mining company. We look forward to
continuing our involvement in the Project as we transition operatorship over the next year."
Transaction Highlights
Exchange of Kenorland's 20% participating interest in the Frotet Joint Venture for a 4% net smelter
return royalty covering the 39,365 hectare property.
The Frotet Royalty is subject to the following buy down rights in favour of Sumitomo:
A 0.25% royalty interest may be purchased for a C$3,000,000 cash payment
to the
Company within five (5) years of the grant of the Frotet Royalty upon the closing of the transaction.
A 0.50% royalty interest may be purchased for a C$10,000,000 cash payment
to the
Company within ten (10) years of the grant of the Frotet Royalty upon the closing of the transaction,
provided Sumitomo has exercised the first buy down right.
In the event Sumitomo exercises the foregoing buy down rights, the Frotet Royalty would be reduced to
an
uncapped 3.25% net smelter return royalty
on all minerals extracted from the Project.
Kenorland has agreed to remain the operator of the Project for at least one year following the transaction
to facilitate a successful transition of operatorship to Sumitomo.
The transaction is subject to receipt of regulatory approvals, including the approval of the TSX Venture
Exchange, and the satisfaction of transfer obligations pursuant to underlying agreements covering
portions of the Project.
Additionally, as Sumitomo is the beneficial owner of more than 10% of Kenorland's outstanding shares,
it is a "related party" to the Company within the meaning of Multilateral Instrument 61-101-
Protection of
Minority Security Holders in Special Transaction
s ("MI 61-101"). As such, the transaction constitutes a
"related party transaction" within the meaning of MI 61-101.
The Company expects to rely on exemptions from formal valuation and the minority shareholder approval
requirements of MI 61-101 found in sections 5.5(a) and 5.7(1)(a) of MI 61-101 as the fair market value of
the transaction does not constitute more than the 25% of the Company's market capitalization.
Figure 1. Map of the Frotet Project and Royalty
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/6489/194361_da839a3fd4629a40_001full.jpg
Exploration Update
The Fall 2023 exploration program, which commenced in mid-September (see press release dated
September 20, 2023) concluded with the completion of 11,918m of drilling at the Regnault gold
discovery along with a large-scale surface geochemical program covering targets directly to the east of
Regnault. Complete assays results from drilling and the geochemical survey will be reported in due
course. The upcoming 2024 winter drill program will begin later this month.
About the Frotet Project
The Project covers 39,365 hectares of the Frotet-Evans greenstone belt within the Opatica geological
sub-province of Quebec. The property is adjacent to the past-producing Troilus Au-Cu mine (9.23Moz Au
indicated resource) and covers several major deformation zones associated with known orogenic gold
prospects, as well as stratigraphy hosting VMS deposits elsewhere in the belt. Kenorland initially staked
the Project in 2017 and then entered into a Joint Venture and Earn-in Agreement with Sumitomo Metal
Mining Co Ltd. in 2018.
The Project hosts the Regnault gold system, a greenfields discovery made by Kenorland and Sumitomo
in 2020 following two years of systematic exploration. Since the initial discovery, Regnault has seen
extensive exploration, totaling 82,273 meters of drilling (193 drillholes). In 2023, 25,277m were drilled,
with 13,360m completed in the Winter 2023 drill campaign and 11,918m in the Fall 2023 campaign.
Further drilling and exploration programs will continue in 2024.
The Project is located 100 kilometers to the north of Chibougamau, Quebec. Favorable infrastructure
exists in the Project area with an extensive forestry road network as well as the Route-du-Nord crossing
the southwestern portion of the property. A power transmission line also crosses through the property
which supplied power to the past producing Troilus mine.
Qualified Person
Janek Wozniewski, B.Sc., P.Geo. (EGBC #172781, APEGS #77522, EGMB #48045, PGO #3824) and
Cédric Mayer, M.Sc., P.Geo. (OGQ #02385), each a "Qualified Person" under National Instrument 43-
101, has reviewed and approved the scientific and technical information in this press release.
About Kenorland Minerals Ltd.
Kenorland Minerals Ltd. (TSX.V KLD) is a well-financed mineral exploration company focussed on
project generation and early-stage exploration in North America. Kenorland's exploration strategy is to
advance greenfields projects through systematic, property-wide, phased exploration surveys financed
primarily through exploration partnerships including option to joint venture agreements. Kenorland holds
a 4% net smelter return royalty on the Frotet Project in Quebec which is owned by Sumitomo Metal
Mining Canada Ltd. The Frotet Project hosts the Regnault gold system, a greenfields discovery made by
Kenorland and Sumitomo Metal Mining Canada Ltd. in 2020. Kenorland is based in Vancouver, British
Columbia, Canada.
Further information can be found on the Company's website
www.kenorlandminerals.com
On behalf of the Board of Directors,
Zach Flood
President, CEO & Director
For further information, please contact:
Alex Muir, CFA
Investor Relations Manager
Tel +1 604 568 6005
Cautionary Statement Regarding Forward Looking Statements
This news release contains forward-looking statements and forward-looking information (together,
"forward-looking statements") within the meaning of applicable securities laws. All statements, other
than statements of historical facts, are forward-looking statements. Generally, forward-looking
statements can be identified by the use of terminology such as "plans", "expects', "estimates",
"intends", "anticipates", "believes" or variations of such words, or statements that certain actions,
events or results "may", "could", "would", "might", "will be taken", "occur" or "be achieved". Forward
looking statements involve risks, uncertainties and other factors disclosed under the heading "Risk
Factors" and elsewhere in the Company's filings with Canadian securities regulators, that could cause
actual results, performance, prospects and opportunities to differ materially from those expressed or
implied by such forward-looking statements. Although the Company believes that the assumptions
and factors used in preparing these forward-looking statements are reasonable based upon the
information currently available to management as of the date hereof, actual results and developments
may differ materially from those contemplated by these statements. Readers are therefore cautioned
not to place undue reliance on these statements, which only apply as of the date of this news release,
and no assurance can be given that such events will occur in the disclosed times frames or at all.
Except where required by applicable law, the Company disclaims any intention or obligation to update
or revise any forward-looking statement, whether as a result of new information, future events or
otherwise.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined
in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/194361