Indigo Exploration Announces Mali Property Acquisition, Corporate Restructuring including Share Consolidation, Debt Settlement and a Financing
News Release
Indigo Exploration Announces Mali Property Acquisition, Corporate Restructuring
including Share Consolidation, Debt Settlement and a Financing
April 13, 2020 - Vancouver, British Columbia . Indigo Exploration Inc. (the “Company”)
(TSX-V: IXI, FSE: INE) announces that it has signed an option agreement, as described in more
detail below, with Desert Gold Ventures Inc. (“Desert Gold ”) and its local Mali subsidiary ,
Desert Gold Mali SARL (“DGM”), to acquire up to a 100% interest in the Djimbala Permit in
southern Mali, West Africa. The Djimbala Permit lies immediately east of Hummingbird
Resources’ 0.7 million oz Au Komana gold mine 1, 21 kilometres north, along strike, of the
Kodieran gold Mine and 28 kilometres north, along strike, from Endeavour’s high grade 3.3
million oz Au Kalana project 2. The Djimbala Permit will compl ement the Company’s West
African gold-focused portfolio with the two permits in Burkina Faso, the Hantoukoura and Lati 2
permits.
The Djimbala Permit is located in southern M ali, West Africa, 220 km south of the capital of
Bamako and covers a 100 km2 area. The permit is situated in the Yanfolila G old Belt and is
surrounded by a significant number of gold deposits, mines and prospecting permits. The bulk of
the permit has not been explored. Two small soil sampling campaigns and a limited artisanal pit
sampling program were completed by Desert Gold over parts of the permit with positive Au
anomalies coinciding with interpreted favourable mineralized structures. Four north- south
trending gold soil anomalies were defined, reflecting the regional structural trend. These soil
anomalies also appear to correspo nd to the southern extension of the Faliko Fodela mineralized
zones drilled by Gold Fields immediately north of the Djimbala Permit. To date, several active
artisanal workings were located during the soil campaigns, confirming Au mineralization.
Paul C owley, President and CEO of the Company, states : “The Djimbala acquisition will
complement our existing gold portfolio and maintain our West Af rican focus. The Company’s
share restructuring, debt settlement and financing are well timed for the strengthening gold
market. We are very much looking forward to reactivating our exploration efforts in Burkina
Faso and Mali once financed. A work pla n and budget are being developed for 2020 with
exploration aimed to start by summer.”
Share Consolidation
The Company announces that, subject to TSX-V approval, the Company proposes to consolidate
its common shares on a 6 for 1 basis. The board of directors believes that it is in the best interests
of the Company to consolidate its common shares in order to provide increased flexibility in
seeking additional financing opportunities, to pursue strategic business acquisitions, and to
improve the market’s perception of the Company.
Assuming no other change in the issued capital of the Company, it is expected that upon
completion of this consolidation, the Company will have approximately 15,336,552 common
shares issued and outstanding, reduc ed from 92,019,316, which are currently issued and
outstanding. The Company’s outstanding options and warrants will also be adjusted on the same
basis ( 6 for 1) as the common shares, with proportionate adjustments being made to exercise
price. No fractional common shares will be issued, and no cash will be paid in lieu of fractional,
post-consolidation common shares, options or warrants. The number of post -consolidation
common shares to be received by a shareholder will be rounded to the nearest whole com mon
share (less than one -half of a share will be cancelled and more than one -half of a share will be
changed to one whole share). The CUSIP number of the Company will change. The Company’s
name and trading symbol will remain the same.
Financing
The Company also announces a non- brokered private placement (the “ Financing”) of up to
10,000,000 post-consolidated units at a price of $0.05 per unit for gross proceeds of up to
$500,000. Each unit will be comprised of one share and one warrant. Each warrant will be
exercisable into a share for a period of three years at a price of $0. 10 per share. The warrants are
subject to an acceleration clause should the common shares trade at a price of $0. 15 or greater
for 10 consecutive trading days, in which event management may notify warrantholders that the
warrants must be exercised within a period of 30 days, or they will be cancelled. The proceeds
of the private placement will be used to carry out exploration programs on the Company’s
Burkina Faso projects, the Djimbala project and for general working capital. The Company may
pay a finder’s fee of cash, common shares or warrants, or a combination thereof, to eligible
persons in compliance with applicable securities laws and TSX -V policies. The financing is
subject to TSX-V approval.
Djimbala Transaction
The Company has signed a four-year option agreement with Desert Gold and its Mali subsidiary,
DGM, whereby the Company has the option to acquire a minimum 51% interest and a maximum
100% interest in the Djimbala Permit by the issuance of share s of the Company and the
completion of certain work commitments . The proposed transaction is subject to (1) the
acceptance of the TSX -V; (2) receipt by the Company of a positive legal and technical due
diligence review of the Djimbala Permit; (3) the consolidation of the Company’s common shares
on a 6 to 1 basis; and ( 4) the completion of the Financing (the “Conditions”). The date that the
Conditions have been fulfilled will be come the Commencement Date (the “Commencement
Date”)
To acquire the minimum 51% interest in the Djimbala Permit, the Company is required to
complete $400,000 in expenditures on or before the second anniversary of the Commencement
Date and in any event prior to April 30, 2022 . To acquire the maximum 100% interest in the
Djimbala Permit, the Company must have earned the minimum interest and is required to make
additional work expenditures of $600,000 prior to April 30, 2024. The Company’s 100% interest
is subject to a 2% net smelter royalty (“NSR”) in favour of Desert Gold . The Company has the
right to purchase 1% of the NSR for USD$1,000,000.
In addition the Company will make a share issuance to Desert Gold equivalent to $50,000 of the
Company’s post-consolidated common shares at a deemed price of $0.05 per share on the date
that the Conditions have been fulfilled (the “Commencement Date”); make a share issuance to
Desert Gold equivalent to $75,000 at a deemed price equal to the volume weighted averag e price
(VWAP) for the prior 10 -day trading period , subject to a minimum deemed price of $0.05 per
share (the “Applicable Deemed Price”) on or before the first anniversary of the Commencement
Date; make a share issuance to Desert Gold equivalent to $100,000 at the Applicable Deemed
Price on or before the second anniver sary of the Commencement Date; and make a share
issuance to Desert Gold equivalent to $125,000 at the Applicable Deemed Price on or before the
third anniversary of the Commencement Date.
Debt Settlement
The Company intends , subject to TSX -V approval , to settle debt that was incurred for and is
currently payable in cash . In order to preserve its cash , the Company is proposing to issue
securities on a post-consolidated basis at a deemed price of $0.05 per post-consolidated security.
A loan from shareholders of $100,000 plus 10% interest is proposed to be settled with the
issuance of 2,166,667 units at a deemed price of $0.05 per post-consolidated unit. Each unit will
be comprised of one share and one warrant. Each warrant will be exercisable into a share for a
period of three years at a price of $0.10 per share.
A debt to an insider of $150,000 is proposed to be settled with the issuance of 3,000,000
common shares at a deemed price of $0.05 per post-consolidated share.
On Behalf of the Board of Directors,
“Paul Cowley”
President and CEO
For further information, please contact Paul Cowley: (604) 340-7711 Website: indigoexploration.com
Paul Cowley, P.Geo., President, CEO and Director of Indigo Exploration Inc., is the Qualified Person as defined in
National Instrument 43-101, who has read and approved the technical content of this news release.
This news release contains forward-looking statements respecting the Company's ability to successfully complete the consolidation, debt
settlement, Djimbala transaction and financing . These forward-looking statements entail various risks and uncertainties that could cause actual
results to differ materially from those reflected in these forward -looking statements. Such statements are based on current expectations, are
subject to a number of uncertainties and risks, and actual results may differ materially from those contained in such stateme nts, including the
inability of the Company to successfully complete the consolidation, debt settlement, Dj imbala transaction and financing . These uncertainties and
risks include, but are not limited to, the strength of the capital markets, the price of gold; operational, funding, and liquidity risks; the degree to
which mineral resource estimates are reflective of actual mineral resources; and the degree to which factors which would make a mineral deposit
commercially viable are present; the risks and hazards associated with mining operations. Risks and uncertainties about the C ompany's business
are more fully discussed in the company's disclosure materials filed with the securities regulatory authorities in Canada and available at
www.sedar.com and readers are urged to read these materials. The Com pany assumes no obligation to update any forward-looking statement or
to update the reasons why actual results could differ from such statements unless required by law.
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.
1. Hummingbird Komana gold resource; 0.7 million oz Au probable reserves category (2015)
https://hummingbirdresources.co.uk/operations -projects/mali/
2. Endeavour Kalana gold resource; 3.3 million oz Au measured & indicated (2020)
htt ps://www.endeavourmining.com/our -portfolio/Kalana -Project/default.aspx