Combined spin-out assets valued at C$22.66 million Newly acquired assets include the Anik property from Kintavar Exploration Inc. (TSXV: KTR) and the Diego project Concurrent financing of a minimum of C$8 million in the spin-out corporation, Monster
TomaGold Announces Spin-Out Corporation
for Monster Lake and Newly Acquired Gold
Assets
Combined spin-out assets valued at
C$22.66 million
Newly acquired assets include the Anik property from Kintavar Exploration Inc. (TSXV: KTR)
and the Diego project
Concurrent financing of a minimum of
C$8 million
in the spin-out corporation, Monster
Exploration
New consolidated Monster Lake sector will consist of 610 claims covering 311 square
kilometres
MONTREAL
,
Jan. 25, 2019
/CNW Telbec/ -
TOMAGOLD CORPORATION (TSXV: LOT)
("TomaGold" or the "Corporation") today announced that its Board of Directors has approved, in
principle, a strategic reorganization of the Corporation's assets pursuant to which the Corporation
would spin out (the "
Spin-Out
") its interests in the Monster Lake and
Irene Lake
exploration projects
(the "
TomaGold Exploration Assets
") into a newly incorporated subsidiary ("
Monster
Exploration
"), with the intent of listing Monster Exploration on the TSX Venture Exchange (the
"
TSXV
"), and that the Corporation has entered into two letters of intent (the "
Letters of Intent
") with
arm's length parties, with respect to the acquisition by Monster Exploration of interests in two
additional gold projects in the vicinity of Monster Lake: Anik from Kintavar Exploration Inc.
("
Kintavar
") (TSXV: KTR) and Diego from a private individual. TomaGold will continue to hold its
interests in its other projects in
Quebec
and
Ontario
. Subsequent to, or in connection with the
completion of the Spin-Out, TomaGold intends to pursue capital market opportunities and to
consolidate its share capital.
TomaGold Announces Spin-Out Corporation for Monster Lake and Newly Acquired Gold Assets
(CNW Group/Corporation TomaGold)
It is proposed that the transaction be carried out by way of statutory plan of arrangement (the
"
Arrangement
") pursuant to the
Canada
Business Corporations Act
. Under the terms of the Spin-
Out, shareholders of TomaGold would exchange their existing common shares of TomaGold for the
same number of new common shares of TomaGold (having the identical terms of the existing
TomaGold common shares) and common shares of Monster Exploration. The number of common
shares of Monster Exploration to be issued to each TomaGold shareholder under the Spin-Out has
not yet been determined, but the TomaGold Exploration Assets are expected to be transferred at a
valuation of
C$22,660,000
based on an independent valuation and fairness opinion. There would be
no change in the shareholders' holdings in TomaGold as a result of the Spin-Out.
Concurrent with the Spin-Out, the Corporation intends to complete a financing (the "
Financing
") into
Monster Exploration for minimum gross proceeds of
C$8,000,000
. The net proceeds of the
Financing will be used to fund, among other things, the working capital of Monster Exploration,
exploration work and potential future acquisitions. Further terms and conditions shall be set out in the
form of a subscription agreement that will be made available to interested eligible investors, who are
directed to
contact the Corporation by email
.
"Spinning out our Monster Lake assets will create a tremendous opportunity for our shareholders
and for investors that wish to be part of an area play with great potential," said
David Grondin
,
President and Chief Executive Officer of TomaGold. "Monster Exploration's main asset will be the
Monster Lake deposit, which has a high-grade inferred resource of
1,109,700 tonnes at 12.14 g/t
Au, for 433,300 ounces
of contained gold
1
. It will also include several promising underexplored
projects and an enhanced technical team with a recognized expertise for exploring mining projects in
Quebec
, and will be well funded once the private placement closes."
"For its part, TomaGold will be able to focus on its wholly owned Obalski project, as well as its
Sidace Lake and Baird properties, which also hold promising value," added Mr. Grondin.
BACKGROUND AND TRANSACTION
The Letters of Intent arose out of discussions with mining companies that had projects around
TomaGold's flagship Monster Lake project and sought to consolidate the properties and
management's operational know-how in the region. The Corporation plans to create Monster
Exploration as a stand-alone entity for these projects in order to increase the potential of the
Monster Lake project through consolidation and capitalize on the positive global gold market
anticipated in the coming years. Monster Exploration is anticipated to have some overlap with
TomaGold regarding directorships and management, but new people with strong skill sets will be
incorporated into the team. The final management structure of Monster Exploration will be
announced in conjunction with the final terms of the Spin-Out, but will include
David Grondin
as
President and Chief Executive Officer,
Alain Cayer
as Vice President Exploration and
Kiril Mugerman
as Chairman of the Board. Monster Exploration will have separate sources of funding and
independent operations.
Management anticipates that upon the closing of the Spin-Out and the Financing, approximately 63%
of the issued and outstanding common shares of Monster Exploration will be owned by TomaGold
shareholders of record, while participants in the Financing will own approximately 22% and Kintavar
will own approximately 14%.
Further details of the Spin-Out and Arrangement will be provided in the management information
circular to be mailed to shareholders of TomaGold and filed on SEDAR in connection with the
meeting of shareholders to be held to approve the transaction, currently planned for the spring of
2019.
The Arrangement remains subject to (i) the approval of the shareholders of TomaGold, (ii) the
receipt of a final court order from the Superior Court of
Quebec
and (iii) the approval of the TSXV
for the listing of Monster Exploration. Notwithstanding receipt of all requisite approvals, the directors
of TomaGold reserve the right to elect not to proceed with the Arrangement and the Spin-Out.
TRANSACTION ASSETS
It is planned that Monster Exploration, upon going public, will have interests in two additional gold
projects in addition to its 50% interest in the Monster Lake Project and 100% interest in the adjacent
Irene Project, subject to completion of the acquisition transactions with Quinto Resources Inc.
(TSXV: QIT) and Brunswick Resources Inc., respectively. The two projects are described below.
Anik Project
The Anik gold project ("
Anik
") is located 40 km southeast of the town of
Chapais
and 55 km to the
south of the town of
Chibougamau
, in Québec. The project consists of 120 claims totalling 6,700
hectares.
Most of the project area can be accessed via the gravel road linking the former
Joe Mann Mine
to
Route 167, a paved road connecting the Lac Saint-Jean region to
Chibougamau
. The nearby towns
of
Chapais
,
Chibougamau
and Oujé-Bougoumou provide facilities and a workforce for exploration
and mining development. The southeast claims block is crossed by a Hydro-Québec high-voltage
power line.
Located in the Opawica-Guercheville deformation corridor, host to several gold mines and deposits,
the eastern portion of the property is located less than 7 km from the Joe Mann mine and the Lac
Meston and Philibert deposits. The western portion of the property is located less than 10 km to the
south of the Monster Lake and Fancamp gold projects. In addition, the main gold zones of the
Nelligan property, a joint venture between Vanstar Resources and IAMGOLD, are surrounded to the
north, south and east by Anik property boundaries at a distance of less than 1,500 metres.
TomaGold and Kintavar have entered into a letter of intent whereby Monster Exploration will acquire
100% of Kintavar's interest in and to Anik and the related assets and liabilities comprising Anik (the
"
Anik Transaction
"), including: (i) the right of Société de Développement de la
Baie James
("
SDBJ
") to be granted a 0.1% net smelter return royalty affecting Anik, which may be purchased
for
C$125,000
, the whole pursuant to the terms and conditions of a financing agreement entered into
between Innord Inc., a subsidiary of Géomega Resources Inc., and SDBJ and (ii) the right of
Administration Régionale Baie-James ("
ARBJ
") to be granted a 0.1% net smelter return royalty
affecting Anik, which may be purchased for
C$125,000
, the whole pursuant to the terms and
conditions of a financing agreement entered into between Innord Inc. and ARBJ.
The consideration for the Anik Transaction will be
$5,000,000
, payable by the issuance to Kintavar
of common shares of Monster Exploration, at a deemed price per share equal to the Financing price,
at the closing of the Anik Transaction (the "
Anik Consideration Shares
").
The Anik Consideration Shares will be issued to Kintavar pursuant to a prospectus exemption under
Canadian securities laws and will be subject to a hold period of four month and a day in
Canada
.
The Anik Transaction is subject to certain conditions, including (i) the completion of the Financing and
the Spin-Out before or concurrently with the Anik Transaction, (ii) the appointment of two directors
of Monster Exploration by Kintavar and (iii) the approval of the TSXV. Kintavar has agreed to deal
exclusively with TomaGold until
June 30, 2019
.
Diego Project
The Diego gold project ("
Diego
") is located on the northwest border of the Lac Doda property.
TomaGold and
Antoine Fournier
("
AF
") have entered into a letter of intent whereby Monster
Exploration will acquire 100% of AF's interest in and to Diego and the related assets and liabilities
comprising Diego (the "
Diego Transaction
").
The consideration for the Diego Transaction will be
$160,000
, payable by the issuance to AF of
common shares of Monster Exploration, at a deemed price per share equal to the Financing price, at
the closing of the Diego Transaction (the "
Diego Consideration Shares
").
The Diego Consideration Shares will be issued to AF pursuant to a prospectus exemption under
Canadian securities laws and will be subject to a hold period of four month and a day in
Canada
.
The Diego Transaction is subject to certain conditions, including (i) the completion of the Financing
and the Spin-Out before or concurrently with the Diego Transaction and (ii) the approval of the
TSXV. AF has agreed to deal exclusively with TomaGold until
June 30, 2019
.
RESULTING ENTITIES
Upon closing of the Spin-Out, the assets of Monster Exploration and TomaGold will be divided as
follows:
Monster Exploration
Monster Lake joint venture: 50% interest in the Monster Lake, Winchester and Lac à l'eau jaune
properties (IAMGOLD 50%)
100% interest in six adjacent properties (Monster Lake East, Monster Lake West, Anik, Lac
Doda,
Irene Lake
and Diego)
70% interest in the Hazeur property
As a result, the new consolidated Monster Lake sector will consist of 610 claims covering
311 square kilometres.
TomaGold
100% interest in the Obalski property
39.5% interest in the Sidace Lake property (Goldcorp 60.5%)
24.5% interest in the Baird property (Goldcorp 51%, New Gold 24.5%)
1,752,000 common shares of Quinto Resources Inc.
TRADING HALT
Further details of the Spin-Out and TomaGold's search for capital market opportunities will be
included in subsequent news releases and disclosure documents to be filed by the Corporation.
Trading in the common shares of TomaGold is currently halted and is expected to remain halted
pending preparation by TomaGold of a management information circular for a special meeting of
shareholders to consider the transaction, at which time TomaGold may request a reinstatement of
trading.
A comprehensive press release regarding the transaction will follow in accordance with the policies
of the TSX Venture Exchange when the terms and conditions of the transaction are finalized.
Qualified Person
The technical content of this press release has been reviewed and approved by Claude P.
Larouche
,
Eng., a qualified person under National Instrument 43-101.
About TomaGold Corporation
TomaGold Corporation is a Canadian mineral exploration Corporation engaged in the acquisition,
assessment, exploration and development of gold mineral properties. It currently has joint venture
agreements with IAMGOLD Corporation for the Monster Lake project, with Goldcorp Inc. for the
Sidace Lake property, and with Goldcorp Inc. and New Gold Inc. for the Baird property. TomaGold
has interests in seven gold properties near the
Chibougamau
mining camp in northern
Quebec
:
Monster Lake, Winchester, Lac à l'eau jaune, Monster Lake East, Monster Lake West, Obalski and
Lac Doda. It also holds interests of 39.5% in the Sidace Lake property and 24.5% in the Baird
property near the
Red Lake
mining camp in
Ontario
, and has a 70% interest in the Hazeur property,
at the southern edge of the Monster Lake group of properties.
Neither 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
news release.
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information
(collectively, "forward-looking statements") within the meaning of applicable Canadian and U.S.
securities legislation, including the United States Private Securities Litigation Reform Act of 1995.
All statements, other than statements of historical fact, included herein including, without
limitation, anticipated exploration program results from exploration activities, the Corporation's
expectation that it will be able to complete the Spin-Out, the Arrangement, the Anik Transaction or
the Diego Transaction or enter into agreements to acquire interests in additional mineral
properties, including the definitive agreements with respect to the Letters of Intent, the discovery
and delineation of mineral deposits/resources/reserves, the closing and amount of the
Financing, and the anticipated business plans and timing of future activities of the Corporation and
Monster Gold, are forward-looking statements. Although the Corporation believes that such
statements are reasonable, it can give no assurance that such expectations will prove to be
correct. Forward-looking statements are typically identified by words such as: "believes",
"expects", "anticipates", "intends", "estimates", "plans", "may", "should", "potential", "scheduled" or
variations of such words and phrases and similar expressions, which, by their nature, refer to
future events or results that may, could, would, might or will occur or be taken or achieved. In
making the forward-looking statements in this news release, the Corporation has applied several
material assumptions, including without limitation, that it will be able to negotiate the definitive
agreements for the acquisition of Diego and Anik and list Monster Gold on the TSX-V, and that it
will obtain TSX-V acceptance for of same, that the Corporation will receive the necessary court
order approving the Arrangement, market fundamentals will result in sustained precious metals
demand and prices, the receipt of any necessary permits, licenses and regulatory approvals in
connection with the future development of the Corporation's Chilean projects in a timely manner,
the availability of financing on suitable terms for the development, construction and continued
operation of the Corporation's projects and the Corporation's ability to comply with environmental,
health and safety laws.
Forward-looking statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Corporation and Monster
Gold to differ materially from any future results, performance or achievements expressed or
implied by the forward-looking information. Such risks and other factors include, among others,
operating and technical difficulties in connection with mineral exploration and development
activities, actual results of exploration activities, including on Diego and Anik, the estimation or
realization of mineral reserves and mineral resources, the timing and amount of estimated future
production, the costs of production, capital expenditures, the costs and timing of the development
of new deposits, requirements for additional capital, future prices of lithium and copper, changes in
general economic conditions, changes in the financial markets and in the demand and market
price for commodities, lack of investor interest in the Financing, accidents, labour disputes and
other risks of the mining industry, delays in obtaining governmental approvals, permits or financing
or in the completion of development or construction activities, changes in laws, regulations and
policies affecting mining operations, title disputes, the inability of the Corporation or Monster Gold
to obtain any necessary permits, consents, approvals or authorizations, including acceptance by
the TSX-V required for the filing of the definitive agreements for the Anik Transaction and the
Diego Transaction, the Financing and the listing of the Monster Gold Shares on the TSX-V and
approval of the Arrangement from the Superior Court of
Quebec
, the timing and possible outcome
of any pending litigation, environmental issues and liabilities, and risks related to joint venture
operations, and other risks and uncertainties disclosed in the Corporation's latest interim
Managements' Discussion and Analysis and filed with the Canadian Securities Authorities. All of
the Corporation's Canadian public disclosure filings may be accessed via
www.sedar.com
and
readers are urged to review these materials, including the technical reports filed with respect to the
Corporation's mineral properties.
Readers are cautioned not to place undue reliance on forward-looking statements. The Corporation
undertakes no obligation to update any of the forward-looking statements in this news release or
incorporated by reference herein, except as otherwise required by law.
1
.
For more information, see the NI 43-101 technical report entitled "
« Amended NI 43-101
Technical Report and Maiden Mineral Resource Estimate for the Monster Lake Project » and
dated as of
May 17, 2018
amends the Technical Report « NI 43-101 Technical Report and
Maiden Mineral Resource Estimate for the Monster Lake Project » dated as of
May 9, 2018
and filed on SEDAR under the profile of
IAMGOLD Corporation.
SOURCE
Corporation TomaGold
View original content to download multimedia:
http://www.newswire.ca/en/releases/archive/January2019/25/c8984.html
%SEDAR: 00025917E
For further information:
David Grondin, President and Chief Executive Officer, (514) 583-3490,
www.tomagoldcorp.com
CO: Corporation TomaGold
CNW 15:15e 25-JAN-19