Deep-South Resources Has Closed the Acquisition of 100% of Haib Copper Deposit IN Namibia IN Partial Share Deal
Suite 162, 2906 West Broadway, Vancouver, British Columbia, V6K 2G8
Tel: 604-340-0140. E-mail: [email protected]
Web site: http://www.deepsouthresources.com
DEEP-SOUTH RESOURCES HAS CLOSED THE ACQUISITION OF 100% OF
HAIB COPPER DEPOSIT IN NAMIBIA IN PARTIAL SHARE DEAL
Vancouver, B.C., Canada – May 8, 2017 – Deep-South Resources Inc. ("Deep-South"
or “the Company") (TSX-V: DSM) is pleased to announce that it has closed the
acquisition of the remaining 70% of Haib Minerals (Pty) Ltd. (“Haib Minerals”) that it does
not own. The shares were acquired from Teck Namibia Ltd. (“Teck”), a wholly owned
subsidiary of Teck Resources Limited in exchange for, among other things, 14,060,000
common shares of Deep-South. Deep-South now holds 100% of Haib Minerals. Haib
Minerals holds the Exclusive Prospecting Licence 3140 (“EPL 3140”), which hosts the
Haib copper project (“Haib” or “the Property”) situated in the south of Namibia. Teck now
holds 18,226,667 of the common shares of Deep-South, representing about 35% of the
Company’s share capital based on the common shares currently outstanding.
In addition to the Deep-South shares to be issued to Teck, Deep-South shall:
- pay $400,000 to Teck in accordance with the following schedule:
- First anniversary of the agreement: $200,000
- Second anniversary of the agreement: $200,000
- Teck shall hold a pre-emptive right to participate in any financing of Deep-South
as long as Teck holds over 5% of Deep-South’s outstanding common shares;
- Teck shall be granted a 1.5% NSR. Deep-South shall have the option to buy
back 1/3 of the NSR in consideration for $ 2 million;
- If Deep-South sells or options the Property or a portion of the Property during the
36 months following closing, Teck shall receive 30% of the gross proceeds of the
sale if the sale occurs during the first 24 months after the closing and shall
receive 20% of the gross proceeds if the sale occurs between the 24th and 36th
month after closing;
- Teck shall be entitled to a production bonus payment that will be declared at the
time the company takes the decision to start mine developm ent. Half of the
bonus shall be paid upon the decision to start mine development and the second
half shall be paid upon commencement of commercial production. The bonus
value is scaled with the value of the capital expenditures as follows:
Development Expenditures (CAD$M) Cash Payment (CAD$M)
$0 - $500 $5.0
$501 - $600 $6.7
$601 - $700 $8.3
$701 - $800 $10.0
$801 - $900 $11.7
$901 - $1,000 $13.3
$1,001 and over $15.0
This transaction constitutes a fundamental change under the policies of the TSX Venture
Exchange. As required by the TSX Venture Exchange, the transaction has been
approved by a shareholders resolution representing 62.26% of the shares issued and
outstanding on March 17, 2017.
Mr. John Akwenye, Chairman of Deep-South stated, “We are delighted with this
transaction. Haib is the largest known porphyry copper deposit in Africa and is situated
in an ideal location adjacent to modern infrastructure and in one of the best mining
countries in Africa. In becoming our largest shareholder, Teck is a strong shareholder to
have in support of the Company. Haib has substantial exploration potential and is a
quality asset that adds strong value for our shareholders.”
About the Haib Copper Project:
The Haib project is a large copper-molybdenum porphyry deposit located in the Karas
region of southern Namibia, 8 km from the Orange River and the South African border.
The deposit, discovered in the 1950’s, has seen over 50,000 metres of drilling in the
1970’s by companies such as Rio Tinto and Falconbridge Ltd.
Since 2010, Teck Namibia has completed over 14,000 metres of drilling with results
such as: 121 m @ 0.5% Cu, 494 m @ 0.36% Cu and 30 m @ 0.81% Cu.
A report by Behre Dolbear, completed in 1996, estimated an Historical Estimate at Haib
in a range as presented in the table below:
(The Behre Dolbear report was produced from a geostatistical block model completed in
1996 by Great Fitzroy Mineral NL (“GFM”)). GFM and Behre Dolbear models used the
Kriging method as the basis for their estimate calculations. Kriging is a statistical
estimation technique widely used for porphyry deposits. The Inverse Distance Squared
and Nearest Neighbour methods, were used by Behre Dolbear for validation of the
Kriging method estimates.
The Historical Estimate comprised principally the compilation and verification of all the
drillhole data incorporating all available data to the end of the Rio Tinto Zinc program
completed in 1975 and comprising over 50,000 metres of drilling, assays and surveys.
The estimates of tonnages and grades quoted in this report were prepared prior to
publication of National Instrument 43-101 in 2001 and are considered as Historical
Estimates.
Haib Historical Estimate - Behre Dolbear / GSM
Cut-off
(%Cu)
GFM Model
Behre Dolbear’s Model
Kriging Inverse Distance
Squared
Nearest
Neighbour
Million
Tonnes
Grade
% Cu
Million
Tonnes
Grade
% Cu
Million
Tonnes
Grade
% Cu
Million
Tonnes
Grad
e %
Cu
0.1 1350 0.23 1353 0.23 1331 0.23 1184 0.25
0.2 730 0.28 739 0.29 726 0.29 630 0.34
0.3 230 0.37 244 0.37 262 0.38 292 0.46
The historical grades and resources terminology from the original historical reports are to
be used only as a reference and should not be considered as a current mineral resource
under NI 43-101 but are to be considered as Historical Estimates as per the NI 43-101
Rules and Policies. Deep-South is not treating the Historical Resour ce as a current
mineral resource under NI 43-101.
P & E Walker Consultancy (“The consultant”), were engaged to prepare a technical
review of all the historical data and reports and to act as Qualified Person. The
Consultant did not have the mandate to classify the Historical Estimate as current
mineral resource under NI 43-101.
P & E Walker Consultancy has prepared a technical review of all the historical data and
reports. The NI 43-101 qualification report can be found on SEDAR at www.sedar.com.
Peter Walker B.Sc. (Hons.) MBA Pr.Sci.Nat. is the author of the 43-101 qualifying report
and is responsible for the technical part of this press release, and is the designated
Qualified Person under the terms of National Instrument 43-101.
About Deep-South Resources Inc.
Deep-South Resources Inc. is a mineral exploration company with a large Namibian
shareholding, actively involved in the acquisition, exploration and development of major
mineral properties in Namibia and Canada. Deep-South growth strategy is to focus on
the exploration and development of quality assets, in significant mineralized trends,
close to infrastructure, in stable countries.
This press release contains certain "forward-looking statements," as identified in Deep-South’s
periodic filings with Canadian Securities Regulators that involve a number of risks and
uncertainties. There can be no assurance that such statements will prove to be accurate and
actual results and future events could differ materially from those anticipated in such statements.
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.
More information is available by contacting Tim Fernback at 604.340.3774 or at