Prestwick Executes Definitive Option Agreement for Baner Gold Project in Idaho, USA; Provides Additional Information on Proposed Qualifying Transaction; Director Change
Prestwick Executes Definitive Option
Agreement for Baner Gold Project in Idaho,
USA; Provides Additional Information on
Proposed Qualifying Transaction; Director
Change
Calgary, Alberta--(Newsfile Corp. - July 24, 2024) -
Prestwick Capital Corporation Limited
(TSXV:
PWIK.P) ("
Prestwick
" or the "
Company
") is pleased to announce that it has entered into a binding
option agreement dated effective July 22, 2024 (the "
Option Agreement
") with Champion Electric
Metals Inc. ("
Champion
") that provides for the grant of an option (the "
Option
") to Prestwick to acquire
a 100% undivided interest in and to the mineral claims comprising the Baner gold project located in
Idaho County, Idaho, USA (the "
Baner Gold Project
"). Prestwick is a "capital pool company" (as
defined in the policies of the TSX Venture Exchange (the "
Exchange
")) and the Option and transactions
contemplated in the Option Agreement (the "
Transaction
") are to constitute its "Qualifying Transaction"
(as such term is defined in the policies of the Exchange).
The Baner Gold Project
The Baner Gold Project is located in Idaho Country, Idaho, approximately 6.2 miles (10 km) southwest of
Elk City and is comprised of 215 unpatented lode claims covering approximately 3,818 contiguous
acres (1,545 hectares).
Champion acquired the Baner Gold Project in 2015 and through 2020 and completed prospecting, rock
and soil sampling, drilling of 30 diamond drill holes, an induced polarization geophysical survey,
geological mapping and additional claim staking. The exploration work led to the definition of a number
of exploration zones of interest among and/or on trend of historical mining activities. Some highlights of
the Baner Gold Project identified by the Company include the following:
Multiple high-grade gold intersections in previous drilling
(1)
, including:
8.7 g/t Au over 6.3m, including 147.7 g/t Au over 0.3m (ICG2018-08);
5.1 g/t Au over 5.1m, including 24.3 g/t Au over 0.5m (ICG2018-16); and
20.8 g/t Au over 12.0m, including 48.9 g/t Au over 4.5m (ICG2018-13).
Only 30 holes drilled within which there are 37 assays reporting greater than 5.0 g/t Au (with three
over 50 g/t Au).
(1)(2)
Mineralization has been identified by drilling over a N-NE to S-SW surface extent of approximately
2,300m.
(1)(2)
Multiple strong vein sets are present (e.g. 9 zones in drill hole ICG2018-15).
(1)
Distinct soil and rock geochemistry anomalies associated with cross-over structures, geophysical
anomalies, and historic prospects. Two major north-south mineralized structures -and likely
crossover (shear) structures in between.
Soils/geophysics show numerous strong untested anomalies along trend, plus elsewhere on the
Baner Gold Project.
Prospective areas that have not yet been drilled, including:
east-west Baner veins (3 known veins to date);
cross-over structures - with strong gold in soil and geophysical anomalies (conductors); and
9,000ft by 600ft aplite dike with 360 historical samples averaging 1.9 g/t Au.
(3)
Approximately 3 million ounces Au recovered in area rivers which surround the Baner Gold Project
(which occupies the triangular middle high ground) and adjacent districts in central Idaho.
(4)
Sources: (1) NI43-101 Technical Report on the Baner Project, Updated from the August 2018 Report by Darren W. Lindsay, P. Geo. (EGBC 30145)
dated July 2, 2020, amended July 21, 2020 and dated effective March 31, 2020; (2) Champion's May 9, 16 and 22, 2021 press releases; (3) Wagner,
E R. (1946); Report, Baner Mine and Baner-Champion Combination; and (4) Reid, R. R., 1959, Reconnaissance Geology of the Elk City region, Idaho:
Idaho Bureau of Mines and Geology Pamphlet 120.
A National Instrument 43-101 -
Standards of Disclosure for Mineral Projects
compliant technical report
(the "
Technical Report
") has been prepared in respect of the Baner Gold Project and is currently being
reviewed by the Exchange. Information regarding the Technical Report and the Baner Gold Project will
be disclosed in detail in the Filing Statement being prepared in connection with the Transaction, and the
Technical Report will be filed under the Company's SEDAR+ profile at
www.sedarplus.ca
when the Filing
Statement is similarly filed on SEDAR+.
The Resulting Company
Board of Directors and Management
The founders of the Company are an experienced group that have successfully founded, financed, and
developed numerous world class mining operations and companies (including Kirkland Lake Gold and
Rupert Resources) and have assembled the proposed management team and Board members below
whom they believe have the experience and expertise to explore and develop the Baner Gold Project
and build the resulting Company into a successful mining exploration and development company. Upon
completion of the Transaction, the proposed directors and officers of the resulting Company are as
follows:
Brian Hinchcliffe - New York, USA - Chairman and CEO
- Mr. Hinchcliffe has been involved in the
founding of mining projects in the natural resources sector for nearly 30 years working with Harry
Dobson. Mr. Hinchcliffe is a co-founder of Kirkland Lake Gold and served as its President and CEO.
Mr.
Hinchcliffe is also formerly the Executive Chairman and CEO of Rupert Resources Ltd. (TSXV) and co-
founded American Pacific Mines. Prior to launching this mine founding career, Mr. Hinchcliffe worked for
Goldman Sachs in New York and London in the mining and metals sector.
Mike Sutton - Ontario, Canada - VP, Exploration and Director
- Mr. Sutton's career spans over 40 years
as an exploration geologist which included the founding of Kirkland Lake Gold with Mr. Hinchcliffe and
Mr. Dobson. Mr. Sutton served as exploration and production geologist at Kirkland Lake Gold and was
awarded the Prospector of the Year for Ontario (along with Stew Carmichael) for the discovery of the
very high-grade South Mine Complex.
He is a member of the Association of Professional Geoscientists
of Ontario and has been a member of the Prospectors and Developers Association of Canada since
1982.
Andrew Dunlop - Ontario, Canada - Chief Financial Officer and Corporate Secretary
- A finance and
accounting professional with over ten years of experience in the mining sector, focused primarily on
assets in North and South America. Mr. Dunlop was previously the Corporate Controller of Discovery
Silver Corp. where, over his three-year tenure, had a broad scope of authority, including executive
guidance for finance, accounting, treasury, taxation, and regulatory filings. Mr. Dunlop holds a Bachelor
of Accountancy, with Honours, from Brock University and holds the designation of Chartered
Professional Accountant and Chartered Accountant.
Trevor Gabriel - Monaco - Director (Independent)
- Mr. Gabriel is qualified as a Chartered Accountant
and spent 12 years in financial and general management roles with Jardine Matheson in Southeast Asia
before returning to Europe in 1985. He subsequently ran a privately owned oil company based in the
United Kingdom and had concessions in Gabon and a distribution infrastructure in several West African
countries. Mr. Gabriel previously had a non-executive director role with Kirkland Lake Gold (where he
also chaired the audit committee) and is currently a non-executive director and Audit Committee Chair of
LSE listed DG Innovate Plc, a hi-tech sector start-up in energy storage and hi-torque electric motors.
John Gravelle - Ontario, Canada - Director (Independent)
- Mr. Gravelle is currently a director of Century
Global Commodities Corporation, KP3993 Resources Inc. and AXMIN Inc. He was previously on the
Board of Directors of several companies in the mining sector, including Century Metals Inc., Brio Gold
Inc. and Foremost Lithium Resource & Technology Ltd. He is a retired partner at
PricewaterhouseCoopers where he served in various leadership roles related to the mining sector
including being the Global Mining Industry Leader. He is a Canadian CPA/CA with a strong financial
background and is recognized as a financial expert. His public company board experience includes
roles on Audit, Compensation and Strategic Committees.
Proposed Name Change
It is expected that the name of the Company will be changed to "Legacy Gold Mines Ltd." in connection
with the completion of the Transaction to reflect the resulting Company and its business going forward.
Any such name change is subject to applicable Exchange and other regulatory approvals, as applicable.
At its annual meeting of shareholders on March 1, 2024, shareholders of the Company approved an
amendment to the Articles of the Company to change its name to such other name as may be
determined and acceptable to the Board of Directors of the Company in their absolute discretion.
Pre-Closing Capitalization of the Company
As of the date hereof, Prestwick's authorized share capital consists of an unlimited number of Common
Shares, of which 11,050,100 Common Shares are issued and outstanding. As well there are 1,105,000
options and 200,000 broker options outstanding, each exercisable to acquire one Common Share at an
exercise price of $0.10 per share.
Other Insiders of the Resulting Company
The Company proposes to complete a concurrent financing in connection with the Transaction and the
terms of any such concurrent financing will be disclosed by separate press release when finalized.
If, for
example, that concurrent financing was for $2.7 million worth of Common Shares at $0.20 per share and
none of the current shareholders of the Company participated in such financing, it is not expected there
would be any additional insiders (10%+ shareholders) of the Company. Additional information regarding
insiders of the Company upon completion of the Transaction and any concurrent financing will be
disclosed once terms and of any concurrent financing and participation by subscribers are finalized.
Finder's Fees and Transfer of Shares within Escrow
Subject to Exchange approval, it is proposed that in connection with the completion of the Transaction:
(a) 150,000 Common Shares be issued to Mr. Mike Sutton as a finder's fee; and (b) certain founding
shareholders of the Company whose Common Shares are in escrow pursuant to the policies of the
Exchange, will transfer an aggregate of 500,000 Common Shares within escrow to Mr. Sutton.
The Transaction
Terms of the Option Agreement
Under the terms of the Option Agreement, Champion has agreed to grant the Option to the Company.
In
order to exercise the Option and keep it in good standing, the Company will be required to make cash
payments and issues securities to Champion as follows:
1
.
On completion of the Transaction, paying or issuing (as applicable) to Champion:
a
.
$75,000;
b
.
1.1 million common shares of the Company ("
Common Shares
"); and
c
.
warrants to purchase up to 200,000 Common Shares at $0.30 per share for two (2) years
from the date of issuance.
2
.
Paying or issuing (as applicable) to Champion within 18 months from the completion of the
Transaction ("
Payment #1 Date
"):
a
.
$350,000;
b
.
200,000 Common Shares; and
c
.
warrants to purchase up to 200,000 Common Shares at the last closing price for the
Common Shares prior to the date of issuance, for two (2) years from the date of issuance.
3
.
Paying or issuing (as applicable) to Champion within 12 months from the Payment #1 Date
("
Payment #2 Date
"):
a
.
$500,000; and
b
.
warrants to purchase up to 200,000 Common Shares at the last closing price for the
Common Shares prior to the date of issuance, for two (2) years from the date of issuance.
The Company paid Champion $25,000 upon execution of a binding letter of intent with Champion dated
May 13, 2024 (see the Company's May 15, 2024 press release).
During the term of the Option, the Company will have the exclusive right to manage and operate all work
programs carried out on the Baner Gold Project in its sole discretion.
The Company will also be
responsible for maintaining the Baner Gold Project in good standing through such time.
Upon satisfaction of the payments and securities issuances above, the Option will be deemed to be
exercised and a 100% undivided interest in the Baner Gold Project will be transferred to the Company,
free and clear of all encumbrances, subject to a 1% net smelter return royalty (the "
NSR
") in favour of
Champion. The Company may buy-back the NSR in consideration for payment of $7.5 million to
Champion.
The Common Shares issuable under the Option will be deemed to be issued at a price equal to $0.235
per share, being the price of the Common Shares on the Exchange on May 13, 2024.
These Common
Shares will be subject to hold periods under applicable securities laws, and subject to voluntary escrow.
Voluntary Escrow
Upon completion of the Transaction, it is proposed that the Company and Champion, along with an
escrow agent, will enter into an escrow agreement providing for voluntary escrow as follows: (i) the
Common Shares issued to Champion upon completion of the Transaction (including any Common
Shares issued on exercise of the warrants issued on that date) will be subject to voluntary escrow until
the Payment #1 Date; and (ii) the Common Shares issued to Champion on the Payment #1 Date
(including any Common Shares issued on exercise of the warrants issued on that date) will be subject to
voluntary escrow until the Payment #2 Date.
Conditions of Completion of the Transaction
The completion of the Transaction is subject to a number of conditions, including Exchange approval,
obtaining all necessary third-party consents and the Baner Gold Project satisfying the Exchange's Initial
Listing Requirements for a Mining Issuer (pursuant to Policy 2.1 -
Initial Listing Requirements
of the
Exchange), including, without limitation, the public float requirements.
The Company expects that upon completion of the Transaction, it will be an exploration stage company
with no producing properties and, consequently, no current operating income, cash flow or revenues.
The Company can give no assurances at this time that commercially viable mineralization
exists on the Baner Gold Project.
The Company intends to use its working capital and a concurrent financing to be completed in
connection with the Transaction to make the cash payments required under the terms of the Option.
Arm's Length Transaction and Shareholder Approvals
The proposed Transaction will not constitute a "Non-Arm's Length Qualifying Transaction" (as such terms
is defined by the Exchange), because of which, it is not expected that the Company will be required to
obtain shareholder approval for the Transaction.
Trading Halt
The Common Shares are presently halted, and it is expected they will remain halted until the Transaction
is approved by the Exchange and completed.
Sponsorship
Sponsorship of the Transaction is required by the Exchange unless an exemption or waiver from
sponsorship requirement is available. The Company is currently reviewing the requirements for and
expects to apply for an exemption from the sponsorship requirements pursuant to the policies of the
Exchange.
Resignation and Appointment of Director
Effective July 24, 2024, Mr. Rupert Williams has resigned as a director of the Company and Mr. Brian
Hinchcliffe has been appointed as his replacement (see Mr. Hinchcliffe's bio above). The Board of
Directors of the Company would like to thank Mr. Williams for his efforts in connection with the initial
public offering of the Company and the proposed Transaction. Mr. Williams currently remains an
"insider" of the Company by the fact that he holds 13.57% of the outstanding Common Shares prior to
the completion of the Transaction and any concurrent financing.
Review by Qualified Person
Mr. Mike Sutton, P.Geo., a consultant of the Company at this time, is the Qualified Person, as defined
under National Instrument 43-101 -
Standards of Disclosure for Mineral Projects
, who reviewed and
approved scientific and technical disclosure in this press release. The Qualified Person has not
reviewed the mineral tenure, nor independently verified the legal status and ownership of the Baner Gold
Project or any underlying property agreements.
Additional Information
Prestwick will issue additional press releases related to the Transaction, concurrent financing terms,
sponsorship, and other material information as it becomes available.
Any reference to "$" in this press release is to Canadian dollars.
For further information, please contact:
Prestwick Capital Corporation Limited
Gordon Chmilar, Chief Financial Officer and Director
Telephone:
+1-403-589-2468
Email:
Completion of the Transaction is subject to a number of conditions, including but not limited to,
Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority
shareholder approval. Where applicable, the Transaction cannot close until the required shareholder
approval is obtained. There can be no assurance that the Transaction will be completed as proposed
or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing
statement to be prepared in connection with the Transaction, any information released or received with
respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in
the securities of a capital pool company should be considered highly speculative
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Transaction
and has neither approved nor disapproved the contents of this press release.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined
in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This press
release includes certain "forward-looking statements" under applicable Canadian securities
legislation. Forward-Looking statements include, but are not limited to, statements with respect to the
proposed timing for completion of the Transaction, any concurrent financing; the ability of Prestwick to
complete the Transaction and any concurrent financing; the resumption in trading of the Common
Shares; the Company's future business operations and results; the receipt of all necessary
shareholder, Exchange, securities regulatory authority and other third party consents and approvals;
and the receipt by Prestwick of an exemption from the sponsorship requirements of the Exchange.
Forward-Looking statements are necessarily based upon a number of estimates and assumptions
that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other
factors, which may cause the actual results and future events to differ materially from those expressed
or implied by such forward-looking statements. Such factors include, but are not limited to: general
business, economic, competitive, political and social uncertainties; delay or failure to receive
shareholder or regulatory approvals; and the results of continued development, marketing and sales.
There can be no assurance that such statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such statements. Accordingly, readers should
not place undue reliance on forward-looking statements. Prestwick disclaims any intention or
obligation to update or revise any forward-looking statements, whether because of new information,
future events or otherwise, except as required by law.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/217559