Lode Gold Signs Letter of Intent to Execute Tax-Efficient Spin-Out, Creating Two Pure Play Companies
Lode Gold Signs Letter of Intent to Execute
Tax-Efficient Spin-Out, Creating Two Pure Play
Companies
Toronto, Ontario--(Newsfile Corp. - September 23, 2024) -
Lode Gold Resources Inc. (TSXV: LOD)
(OTCQB: SBMIF) ("Lode Gold " or the "Company")
is pleased to announce its wholly-owned
subsidiary, ("1475039 B.C. Ltd." or "Gold Orogen") has entered into a non-binding Letter of Intent (LOI)
on September 23, 2024 to acquire Great Republic Mining ("GRM", "Great Republic" or GRM:CSE),
pursuant to which the GRM and the Company's subsidiary propose to complete a
Reverse Take Over
(RTO) transaction pursuant to which GRM will acquire all of the issued and outstanding shares of the
Company's subsidiary.
The Company plans to carry out a tax-efficient Spin-out transaction by way of a RTO of the currently
CSE-listed GRM. Upon closing, the shareholders of Lode Gold (the target shareholders) will own up to
74.16% of the issued and outstanding shares of the company on a non-diluted basis, Fancamp
Exploration Ltd. ("Fancamp") will own 19.9%, and existing GRM shareholders will own 5.94%. The
resulting entity from the proposed RTO will continue the business as Gold Orogen. After the completion
of the Spin-out, Lode Gold shareholders will receive shares in Gold Orogen.
"We are systematically executing our strategic plan as we had promised. This Spin-out will unlock value
for shareholders, creating two pure play companies to attract new investors," comments Wendy T. Chan,
CEO of Lode Gold.
Bill Fisher, CEO of Great Republic Mining, adds, "We are glad to partner with Lode Gold to acquire
highly prospective exploration packages in Yukon and New Brunswick. Launching a new company, in
this challenging market, that is already funded with $3 million to pursue exploration work - is a great step
forward."
Proposed RTO and Plan of Arrangement
Pursuant to the terms of the Letter of Intent and the upcoming Definitive Agreement, the proposed RTO
is expected to be completed by way of a court-approved plan of arrangement pursuant to the laws of
British Columbia. The shareholders of Lode Gold and Gold Orogen will own directly the GRM shares
exchanged from the transaction.
It is proposed that the Company will complete the Spin Out of Gold Orogen and each outstanding Gold
Orogen share will be exchanged for GRM shares. In connection with the proposed RTO: (i) the resulting
entity expects to change its name; (ii) the Company will hold a special meeting of shareholders to
approve the transaction; (iii)
GRM intends to seek the consent resolution approval; and (ii) GRM shares
shall be consolidated so that 1,973,684 GRM post-consolidation shares shall be issued and outstanding
prior to the closing of the proposed RTO, or about 5.94% of total issued and outstanding shares on the
closing.
The Letter of Intent includes exclusivity provisions, pursuant to which the company and GRM have agreed
to negotiate and deal exclusively with one another with respect to the proposed RTO.
Conditions of closing the proposed RTO
The terms of the transaction will be set out in a definitive agreement. The completion of the proposed
RTO is subject to a number of conditions, which include, but are not limited to:
Receipt of all required shareholder, regulatory and other approvals, authorizations and consents for
the proposed RTO as may be required;
1,875,000 of founder and seed investors' GRM shares (pre-consolidation) are escrowed for 12
months following the close of transaction, with the right for equal quarterly releases of the shares;
No material adverse change in the business, results of operations, assets, liabilities, financial
conditions or affairs of the parties subsequent to the date of the letter agreement;
No legal proceedings or regulatory actions against the company or GRM that would reasonably be
expected to have a material adverse effect on the company or GRM, in the reasonable opinion of
the other party, as applicable;
No inquiry, action, suit, proceeding or investigation commenced, announced or threatened by any
securities regulatory authority or stock exchange in relation to the company or GRM;
There being no prohibition at law against the completion of the proposed RTO;
Compliance by the company and GRM with all representations, warranties, covenants, obligations
and conditions of such party as set out in the definitive agreement to be negotiated between the
parties;
GRM having a minimum of $250,000 cash at closing and no liabilities;
GRM terminating the Porcher Island property option agreement immediately prior to closing.
Timing
The transaction will be subject to necessary regulatory approvals, including acceptance of the TSX
Venture Exchange ("TSXV") and Canadian Securities Exchange (the "CSE").
The anticipated timing of Definitive Agreement and submission to the CSE and TSXV will be within the
next two weeks. Audited financial statements and updated NI 43-101's for the listing projects: Golden
Culvert/WIN, McIntyre Brook and Riley Brook have been completed.
Gold Orogen plans to raise an additional $1.5 million to add to the Spin Co's current $3.0 million budget
for Fiscal 2025, resulting in a total $4.5 million spend in the first 12 months. This ensures systematic
exploration and drilling can be executed in Yukon and New Brunswick. Please reference the Company's
Strategic Alliance in the
August 30, 2024 news release.
The anticipated Spin-out will be in Q4 2024 when Spin Co Gold Orogen will be trading as a public entity.
Shareholders of Lode Gold will receive shares of Gold Orogen at that time in a tax-efficient manner.
About Lode Gold
Lode Gold (TSX.V: LOD) is an exploration and development company with projects in highly prospective
and safe mining jurisdictions in Canada and the United States.
Its Golden Culvert and WIN Projects in Yukon, covering 99.5 km
2
across a 27-km strike length,
are situated in a district-scale, high-grade-gold-mineralized trend within the southern portion of
the Tombstone Gold Belt.
Gold deposits and occurrences within the Belt include Fort Knox, Pogo,
Brewery Creek and Dublin Gulch, and Snowline Gold. A NI 43-101 technical report entitled "Technical
Report on the WIN-Golden Culvert Property for Lode Gold" with an effective date of May 15, 2024,
summarizing the work to date on these properties is available on the Company's profile on SEDAR+
(www.sedarplus.ca)
and on the Company's website (
www.lode-gold.com
).
In New Brunswick, Lode Gold has created one of the largest land packages with a 42km strike
within 420km
2
. Its McIntyre Brook Project, New Brunswick, covering 111 km
2
and a 17-km
strike length in the emerging Appalachian/Iapetus Gold Belt
, is surrounded by Puma Exploration's
Williams Brook Project (5.55 g/t Au over 50m)
1
and is hosted by orogenic rocks of similar age and
structure as New Found Gold's Queensway Project.
The Fancamp's Riley Brook is a 309 km
2
package covering a 25 km strike of Wapske formation with its numerous felsic units.
Previous
exploration efforts have focused on just VMS-style mineralization hosted in the felsic intrusions, and
mostly focused on the base metals - the Company is the first to focus on and assay for gold. This
transaction will close upon Exchange's acceptance.
The Company is also advancing its Fremont Gold development project in the historic Mother
Lode Gold Belt of California where 50,000,000 oz of gold has been produced.
Fremont, located
500km north of Equinox Gold's Castle Mountain and Mesquite mines, has a Preliminary Economic
Assessment ("PEA") with an after-tax NPV (5%) of USD $217M, a 21% IRR, 11-year LOM, averaging
118,000 Oz per annum at USD $1,750 gold. A sensitivity to the March 31, 2023 PEA at USD $2,000/oz
gold gives an after-tax NPV (5%) of USD $370M and a 31% IRR over an 11-year LOM. The project
hosts an NI 43-101 resource of 1.16 MOz at 1.90 g/t Au within 19.0 MT Indicated and 2.02 MOz at 2.22
g/t Au within 28.3 MT Inferred.
The MRE evaluates only 1.4 km of the 4 km strike length of the Fremont
property which features five gold-mineralized zones. Significantly, three step-out holes at depth hit the
mineralized structure, typical of orogenic deposits that often occur at depth.
Fremont is located on
3,351 acres of 100% owned private land in Mariposa, the original Gold Rush County, and is 1.5
hours from Fresno, California. The property has year-round road access and is close to
airports and rail.
Please refer to the Fremont Gold project NI 43-101 PEA technical report dated March 31, 2023, which is
available on the Company's profile on SEDAR+ (
www.sedarplus.ca
) and on the Company's website
(
www.lode-gold.com
). The PEA technical report has been reviewed and approved by independent
"Qualified Persons" Eugene Puritch, P.Eng., FEC, CET, and Andrew Bradfield, P.Eng. both of P&E, and
Travis Manning, P.E. of KCA.
QUALIFIED PERSON STATEMENT
The scientific and technical information contained in this press release has been reviewed and approved
by Jonathan Victor Hill, Director, BSc (Hons) (Economic Geology - UCT), FAusIMM, and who is a
"qualified person" as defined by NI-43-101.
About Great Republic Mining Corp.
Great Republic is a Canadian exploration company engaged in the business of acquiring and exploring
mineral resource properties - founded by a team with extensive geological, mining, and capital markets
experience. Great Republic has an option to acquire a 100% interest in the Porcher Property, which is
composed of nine contiguous mineral titles covering an area of 3,560.4 hectares in the northwest part of
British Columbia, Canada, approximately 40 kilometers southwest of the city of Prince Rupert on
Porcher Island.
ON BEHALF OF THE COMPANY
Wendy T. Chan, CEO & Director
Information Contact
Winfield Ding, CFO
+1-416-320-4388
Kevin Shum
Investor Relations
+1 (647) 725-3888 ext. 702
Cautionary Note Related to this News Release and Figures
This news release contains information about adjacent properties on which the Company has no right to
explore or mine. Readers are cautioned that mineral deposits on adjacent properties are not indicative
of mineral deposits on the Company's properties.
Cautionary Statement Regarding Forward-Looking Information
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.
This news release includes "forward-looking statements" and "forward-looking information" within the
meaning of Canadian securities legislation. All statements included in this news release, other than
statements of historical fact, are forward-looking statements including, without limitation, statements
with respect to the completion of the transaction and the timing thereof, the expected benefits of the
transaction to shareholders of the Company, the structure, terms and conditions of the transaction and
the execution of a definitive agreement, the timing of submission to the CSE and TSXV, Gold Orogen
raising an additional $1,500,000 and the anticipated use of proceeds. Forward-looking statements
include predictions, projections and forecasts and are often, but not always, identified by the use of
words such as "anticipate", "believe", "plan", "estimate", "expect", "potential", "target", "budget" and
"intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be
achieved and other similar expressions and includes the negatives thereof.
Forward-looking statements are based on a number of assumptions and estimates that, while
considered reasonable by management based on the business and markets in which the Company
operates, are inherently subject to significant operational, economic, and competitive uncertainties,
risks and contingencies. These include assumptions regarding, among other things: that the
Company and GRM will be able to negotiate the definitive agreement on the terms and within the time
frame expected, that the Company and GRM will be able to make submissions to the CSE and TSXV
within the time frame expected, that the Company and GRM will be able to obtain shareholder
approval for the transaction, that the Company and GRM will be able to obtain necessary third party
and regulatory approvals required for the transaction, if completed, that the transaction will provide the
expected benefits to the Company and its shareholders.
There can be no assurance that forward-looking statements will prove to be accurate and actual
results, and future events could differ materially from those anticipated in such statements. Important
factors that could cause actual results to differ materially from the Company's expectations include
adverse market conditions, general economic, market or business risks, unanticipated costs, the
failure of the Company and GRM to negotiate the definitive agreement on the terms and conditions
and within the timeframe expected, the failure of the Company and GRM to make submissions to the
CSE and TSXV within the timeframe expected,
the failure of the Company and GRM to obtain
shareholder approval for the transaction, the failure of the Company and GRM to obtain all necessary
approvals for the transaction, and r other risks detailed from time to time in the filings made by the
Company with securities regulators, including those described under the heading "Risks and
Uncertainties" in the Company's most recently filed MD&A. The Company does not undertake to
update or revise any forward-looking statements, except in accordance with applicable law.
1
See Puma Exploration Inc.'s news release dated September 15, 2021.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/224340