Nevada KING Announces Spin-Out of Non-Atlanta Claims Portfolio and Fully Allocated $9.75-MILLION Non- Brokered Private Placement
NEVADA KING ANNOUNCES SPIN-OUT OF
NON-ATLANTA CLAIMS PORTFOLIO AND
FULLY ALLOCATED $9.75-MILLION NON-
BROKERED PRIVATE PLACEMENT
/NOT FOR DISTRIBUTION TO
UNITED STATES
NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE
UNITED STATES
/
VANCOUVER, BC
,
Feb. 12, 2024
/CNW/ -
Nevada King Gold Corp.
(TSXV: NKG) ("
Nevada King
"
or the "
Company
") is pleased to announce that the Company's Board of Directors has unanimously
approved plans for a strategic reorganization of its business pursuant to which all of the Company's
concessions and properties with the exception of the Atlanta Gold Mine Project ("
Atlanta
") will be
spun out to Nevada King shareholders (the "
Spin-Out
") through a newly incorporated company
("
SpinCo
"). In connection with the Spin-Out, Nevada King proposes to also grant to SpinCo a 3.0%
royalty on all production from certain portions of
Atlanta
including the
Atlanta
resource area and non-
core claims surrounding the Atlanta Gold Mine Project.
The Company is also proceeding with a non-brokered private placement financing (the "
Non-
Brokered Private Placement
") of 27,857,143 common shares of the Company ("
Common
Shares
") at a price of
$0.35
per Common Share for aggregate gross proceeds of
$9.75-million
. The
Non-Brokered Private Placement is fully allocated to insiders, existing shareholders, and a new
strategic shareholder of the Company. Proceeds of the Non-Brokered Private Placement will be
used to advance the Atlanta Gold Mine Project and for working capital purposes of Nevada King.
Highlights:
The Spin-Out will provide investors with an ownership stake in two separate specialized
companies. Nevada King will continue to focus exclusively on the advancement of the Atlanta
Gold Mine Project, while the newly created SpinCo will focus on advancing its foothold as the
third largest mineral claim holder in the
State of Nevada
, behind
Nevada Gold Mines
(Barrick/Newmont) and
Kinross Gold
. SpinCo will control over 193,000 acres (9,682 claims)
along the Battle Mountain Trend with key project areas hosting significant historical exploration
work and possessing untested discovery potential. These project areas include Iron Point,
Buffalo Valley, Lewis, Horse Mountain-Mill Creek, Hilltop South,
Carico Lake
, Kobeh Valley, and
Pancake South.
Company Founder & Chief Executive Officer
Collin Kettell
is subscribing for
$2,000,000
of the
Non-Brokered Private Placement, while other members of management and the board of
directors are also participating.
Two significant shareholders of the Company are subscribing for
$4,200,000
and
$1,345,000
of
the Non-Brokered Private Placement, respectively. A new strategic shareholder to the Company
is subscribing for
$2,000,000
. Between participation of the new strategic shareholder, as well
as management and significant shareholders, the Non-Brokered Private Placement is fully
allocated.
"We are pleased to announce these two exciting opportunities for the Company. Creating a
standalone focused company holding Nevada King's large portfolio of claims along the
Battle
Mountain
trend will create an exciting growth-focused story with a dominant land position along one
of the world's most prolific gold mining trends. This project portfolio is nestled amongst some of
North America's
most prominent current and former producing mines and has the potential to provide
exceptional exploration upside and optionality from multiple properties,"
Collin Kettell
, CEO of
Nevada King stated. "At the same time, the fully allocated Non-Brokered Private Placement, which is
priced at market and without a warrant, will allow Nevada King to fast track drilling at
Atlanta
, where
we have continually intersected high-grade oxide results over significant thicknesses. We will be
creating value for shareholders on two fronts now, with SpinCo providing exposure to significant
exploration potential while Nevada King continues to develop its flagship Atlanta Gold Mine Project."
"Finally, I would like to provide a special thank you to our dedicated and growing group of significant
shareholders whose support and long-term vision for Nevada King has allowed us to accelerate the
advancement of
Atlanta
despite difficult equity conditions for the gold exploration sector."
Spin-Out
The Spin-Out will be completed as part of a strategic reorganization to unlock value in
Nevada
King's
large portfolio of mineral claims in the
State of Nevada
. The target areas along the
Battle Mountain
trend to be held by SpinCo include the Company's Lewis, Horse Mountain-Mill Creek, and Iron Point
projects. Nevada King will also grant SpinCo a net smelter return ("
NSR
") royalty in the amount of
3.0% from all production from certain non-core
Atlanta
claims surrounding
Atlanta
, as well as a 3.0%
NSR royalty on the core "Bobcat" claims that cover the existing resource zone. The 3.0% NSR
royalty on the Bobcat claims will take effect upon fulfilling the existing royalty on the Bobcat claims
which is a 3.0% royalty capped at the first 4,000 ounces of gold equivalent production.
It is proposed that the Spin-Out will proceed by way of a statutory plan of arrangement (the
"
Arrangement
") pursuant to
the Business Corporations Act
(
British Columbia
). Common shares of
SpinCo (the "
SpinCo Shares
") will be distributed to shareholders of Nevada King in proportion to
their shareholdings of Nevada King. There will be no change in
Nevada
King shareholders' holdings in
the Company as a result of the Spin-Out.
Completion of the proposed Spin-Out will be subject to finalizing the terms of a definitive
arrangement agreement to be entered into between Nevada King and SpinCo, as well as the
approval of the Nevada King shareholders, and the approvals of the British Columbia Supreme Court
and the TSX Venture Exchange (the "
TSXV
").
SpinCo will not initially be listed on a public stock exchange but will operate as a reporting issuer.
Further details of the Spin-Out will be provided as the transaction progresses. Timing of the Spin-
Out will be based on prevailing market conditions. The particulars of the Spin-Out are not yet final
and shareholders are cautioned that there can be no assurance that the Spin-Out will be completed
on the terms described herein or at all.
Private Placement
The securities offered in the Non-Brokered Private Placement have not been registered under the
U.S. Securities Act of 1933, as amended, and may not be offered or sold in
the United States
absent registration or an applicable exemption from the registration requirements. This release does
not constitute an offer to sell or a solicitation of an offer to buy of any securities in
the United States
.
The securities described herein have not been, and will not be, registered under the United States
Securities Act of 1933, as amended (the "
U.S. Securities Act
"), or any state securities laws, and
may not be offered or sold within
the United States
except in compliance with the registration
requirements of the U.S. Securities Act and applicable state securities laws or pursuant to available
exemptions therefrom.
Related Party Participation in the Non-Brokered Private Placement
Certain insiders of the Company, including
Collin Kettell
(CEO and Director), expect to participate in
the Non-Brokered Private Placement. The participation by insiders in the Non-Brokered Private
Placement constitutes a "related party transaction" as defined under Multilateral Instrument 61-101 –
Protection of Minority Security Holders in Special Transactions
("
MI 61-101
"). The Company is
relying on the exemptions from the valuation and minority shareholder approval requirements of MI
61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101, as neither the fair market value of
the Common Shares purchased by insiders, nor the consideration for the Common Shares paid by
such insiders, will exceed 25% of the Company's market capitalization. The Company expects that
the closings of the Non-Brokered Private Placement will occur within 21 days of this announcement
and that it will not file a material change report in respect of the related party transaction at least 21
days before the closings. The Company deems this circumstance reasonable in order to complete
the Non-Brokered Private Placement in an expeditious manner. The Non-Brokered Private Placement
has been unanimously approved by the Company's board of directors. Further information regarding
the interest in the Non-Brokered Private Placement of every related party and the effect that the
Non-Brokered Private Placement will have on their percentage of securities of the Company will be
provided once finalized.
About Nevada King Gold Corp.
Nevada King is the third largest mineral claim holder in the
State of Nevada
, behind
Nevada Gold
Mines
(Barrick/Newmont) and
Kinross Gold
. Starting in 2016 the Company has staked large project
areas hosting significant historical exploration work along the
Battle Mountain
trend located close to
current or former producing gold mines. These project areas were initially targeted based on their
potential for hosting multi-million ounce gold deposits and were subsequently staked following a
detailed geological evaluation. District-scale projects in
Nevada
King's portfolio include (1) the 100%
owned Atlanta Mine, located 100km southeast of
Ely
, (2) the Lewis and Horse Mountain-Mill Creek
projects, both located between
Nevada Gold Mines'
large
Phoenix
and Pipeline mines, and (3) the
Iron Point project, located 35km east of
Winnemucca, Nevada
.
The Atlanta Mine is a historical gold-silver producer with a National Instrument 43-101 ("
NI 43-101
")
compliant pit-constrained resource of 460,000 oz Au in the measured and indicated category (
11.0M
tonnes at 1.3 g/t) plus an inferred resource of 142,000 oz Au (
5.3M
tonnes at 0.83 g/t). See the NI
43-101 Technical Report on Resources titled "Atlanta Property,
Lincoln County, NV
" with an effective
date of
October 6, 2020
, and a report date of
December 22, 2020
, as prepared by Gustavson
Associates and filed under the Company's profile on SEDAR+ (
www.sedarplus.com
).
The scientific and technical information in this news release has been reviewed and approved by
Calvin R. Herron
, P.Geo., who is a Qualified Person as defined by NI 43-101.
Resource Category
Tonnes
(000s)
Au Grade
(ppm)
Contained
Au Oz
Ag Grade
(ppm)
Contained Ag
Oz
Measured
4,130
1.51
200,000
14.0
1,860,000
Indicated
6,910
1.17
260,000
10.6
2,360,000
Measured + Indicated
11,000
1.30
460,000
11.9
4,220,000
Inferred
5,310
0.83
142,000
7.3
1,240,000
Table 1. NI 43-101 Mineral Resources at the Atlanta Mine
Please see the Company's website at
www.nevadaking.ca
.
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.
Cautionary Statements Regarding Forward Looking Information
This news release contains certain "forward-looking information" and "forward-looking statements"
(collectively "forward-looking statements") within the meaning of applicable securities legislation.
Forward-looking statements are frequently, but not always, identified by words such as "expects",
"anticipates", "believes", "intends", "estimates", "potential", "possible", and similar expressions, or
statements that events, conditions, or results "will", "may", "could", or" should" occur or be
achieved. All statements, other than statements of historical fact, included herein, without
limitation, statements relating the proposed terms of the Spin-Out, completion of the Spin-Out, the
closing of the Non-Brokered Private Placement, TSXV approval of the Spin-Out and the Non-
Brokered Private Placement, the use of proceeds with respect to the Non-Brokered Private
Placement, and the benefits of the proposed Spin-Out and Non-Brokered Private Placement are
forward-looking statements. 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. Forward-looking statements reflect the beliefs, opinions and projections on the date the
statements are made and are based upon a number of assumptions and estimates that, while
considered reasonable by Nevada King, are inherently subject to significant business, economic,
competitive, political and social uncertainties and contingencies. Many factors, both known and
unknown, could cause actual results, performance or achievements to be materially different from
the results, performance or achievements that are or may be expressed or implied by such
forward-looking statements and the parties have made assumptions and estimates based on or
related to many of these factors. Such factors include, without limitation, the ability to complete
proposed exploration work, the results of exploration, continued availability of capital, and changes
in general economic, market and business conditions. Readers should not place undue reliance on
the forward-looking statements and information contained in this news release concerning these
items. Nevada King does not assume any obligation to update the forward-looking statements of
beliefs, opinions, projections, or other factors, should they change, except as required by
applicable securities laws.
SOURCE
Nevada King Gold Corp.
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For further information:
Collin Kettell at [email protected] or (301) 744-8744.
CO: Nevada King Gold Corp.
CNW 16:15e 12-FEB-24