North Peak Signs Letter of Intent to Acquire Prospect Mountain Mine Complex in Silver- Gold-Lead District of Eureka, Nevada
North Peak Signs Letter of Intent to Acquire
Prospect Mountain Mine Complex in Silver-
Gold-Lead District of Eureka, Nevada
www.northpeakresources.com
TSX Venture: NPR
CALGARY, AB
,
April 10, 2023
/CNW/ -
North Peak Resources Ltd.
(TSXV: NPR) (the "
Company
"
or "
North Peak
") announces execution of a non-binding letter of intent (the "
LOI
") dated
March 8,
2023
with Solarljos LLC and Gullsil LLC of
Nevada
(the "
Erickson Entities
") for the acquisition of
the Prospect Mountain Mine complex in the
Eureka
district of
Nevada
(the "
Acquisition
"). The
Acquisition involves the issuance of 8 million common shares of the Company in two phases - an
initial tranche of 5 million shares to acquire an 80% interest in the property, and at the Company's
discretion, an additional 3 million shares to acquire the remaining 20% interest. Described below are
additional economic considerations to the Acquisition, which would be an arm's length transaction.
"
The dual gold and base metal geologic systems and historic mining at the Prospect Mountain Mine
complex offers the possibility of finding the high-grade mineralization and reserves that would be
required for profitable surface or underground mining given today's capex and opex costs," said
Brian Hinchcliffe
, North Peak's CEO. "As the long-time owners of Prospect Mountain through the
Erickson Entities,
Ty Erickson
and
Ari Erickson
were seeking a group experienced in re-vitalizing
former mining complexes with modern exploration and we look forward to executing precisely those
programs in the exciting
Eureka
district."
The Prospect Mountain Mine complex is over 1,700 acres of high elevation lands with an
underground infrastructure consisting of 4 shaft complexes and some 11 miles of tunnels where
mining operations date back to 1872. The property's historic production areas sit on the western
side of the Jackson fault and are approximately 3 km's south of the Ruby Hill Mine complex.
Recorded historic production from the Prospect Ridge group of mines (which includes the Prospect
Mountain Mine complex) through to 1956 was over 100,000 tons with some shipments averaging
approximately 2.8 oz per ton gold, 56 oz per ton silver and 13% lead (source:
The Eureka Mining
District,
Nevada
,
Geological Survey Professional Paper 406, 1962
by
Thomas B. Nolan
, page 68).
The Acquisition
The LOI outlines how the Company and the Erickson Entities will work exclusively towards the
execution of a binding, definitive agreement in respect of the Acquisition and sets out a strategy by
which the Acquisition has been de-risked to the greatest extent possible for both parties, as it is
proposed that both the Company and the Erickson Entities will have certain return and reversion
rights (see below for further information).
The LOI gives the parties until
June 6
, 2023 to complete due diligence, determine the final structure
of the Acquisition (based on advice from legal, tax and professional advisors and in accordance with
applicable corporate, tax and securities laws) and to enter into a binding, definitive agreement.
It is proposed that the following consideration be paid by the Company in connection with the
Acquisition:
8 million common shares of the Company issued to the Erickson Entities (the "
Consideration
Shares
"), to be issued in two tranches;
cash payments of
US$385,000
in total per year, for each of the first three (3) years following
completion of the Acquisition;
the issuance of 340,000 common share purchase warrants to those persons designated by the
Erickson Entities, which such warrants to be issued and priced in accordance with the Policies
of the TSX Venture Exchange; and
a 1% NSR royalty on production from the Prospect Mountain Mine complex.
The Erickson Entities will be entitled to nominate one director to the Board of Directors of the
Company at the closing of the Acquisition.
It is also proposed that the Company undertake a commitment to use commercially reasonable
efforts to complete a minimum three (3) year exploration program at the Prospect Mountain Mine
complex where expenditures will total no less than
US$1 million
per year (the "
Exploration
Programs
").
In addition, it is proposed that the Erickson Entities will have a right of reversion in the event the
Exploration Programs are not completed within the agreed deadlines, which if exercised would result
in the return of the Prospect Mountain Mine complex and related assets to the Erickson Entities, who
would in turn return the Consideration Shares issued to that time, to the Company. Likewise, it is
proposed that the Company would have the right to return its interest in the Prospect Mountain Mine
complex to the Erickson Entities, with the Consideration Shares issued to that time being returned to
the Company in such instance.
The structure of the Acquisition currently being contemplated is a joint venture structure where the
Company acquires an initial 80% interest in the joint venture (and therefore the Prospect Mountain
Mine complex) by issuing an initial tranche of 5 million Consideration Shares to the Erickson Entities
and the Erickson Entities holding a carried 20% interest. In this structure, the Company would have
three years to decide to acquire the carried 20% interest held by the Erickson Entities by issuing a
second tranche of 3 million Consideration Shares to the Erickson Entities, the result of which being
that 8 million Consideration Shares, in aggregate, will have been issued to the Erickson Entities
pursuant to the terms of the Acquisition.
The Acquisition would be subject to TSX Venture Exchange approval.
Mr.
Mike Sutton
, P.Geo., a director of the Company, 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 news release. The Qualified Person has not
reviewed the mineral tenure, nor independently verified the legal status and ownership of the
Prospect Mountain Mine complex or any underlying property agreements.
Investors are cautioned that there can be no assurance that the parties to the LOI will come
to agreement and execute a binding, definitive agreement or that the Acquisition will be
completed as proposed, or at all. In addition, the Company can give no assurances at this
time that the Prospect Mountain Mine complex will contain the high-grade mineralization and
reserves that would be required for any profitable surface or underground mining or will fulfil
the Company's business development goals described herein. Trading in the securities of
the Company should be considered highly speculative.
The Company will issue additional press releases related to execution of definitive documentation in
respect of the Acquisition and other material information as it becomes available.
About North Peak
The Company is a Canadian based gold exploration and development company that is listed on the
TSX Venture Exchange under the symbol "NPR". The Company is focused on acquiring historic sites,
with low cost producing gold and other metals properties, with near term production potential and 8+
year mine life in the northern hemisphere.
Website:
w
ww.northpeakresources.com
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
:
This news
release includes certain "forward-looking statements" under applicable Canadian securities
legislation. Forward-looking statements include, but are not limited to,
statements
with respect to
those that address the ability of the parties to the LOI come to definitive terms and negotiate and
execution of definitive documentation in respect of the Acquisition, the structure of the Acquisition,
the ability to receive applicable approvals from the TSX Venture Exchange and applicable
governmental authorities for the Acquisition, the ability to complete the Exploration Programs as
proposed and on the timelines suggested, estimates of mineralization from drilling and the
potential for minerals and/or mineral resources and reserves, and
regarding the plans, intentions,
beliefs, and current expectations of the Prospect Mountain Mine complex and the Company,
including with respect to the future business activities and operating performance of the Company
that may be described herein
. Forward-looking statements consist of statements that are not purely
historical, including any statements regarding beliefs, plans, expectations or intentions regarding
the future. Such information can generally be identified by the use of forwarding-looking wording
such as "may", "expect", "estimate", "anticipate", "intend", "believe" and "continue" or the negative
thereof or similar variations. Readers are cautioned not to
place undue reliance on forward-looking
statements, as there can be no assurance that the plans, intentions or expectations upon which
they are based will occur.
By their nature, forward-looking statements involve numerous assumptions, known and unknown
risks and uncertainties, both general and specific, that contribute to the possibility that the
predictions, estimates, forecasts, projections and other forward-looking statements will not occur.
These assumptions, risks and uncertainties include, among other things, the state of the economy
in general and capital markets in particular,
accuracy of assay results, geological interpretations
from drilling results, timing and amount of capital expenditures; performance of available
laboratory and other related services, future operating costs, and the historical basis for current
estimates of potential quantities and grades of target zones,
as well as those risk factors discussed
or referred to in the Company's Management's Discussion and Analysis for the year ended
December 31, 2021
, and the period ended
September 30, 2022
available at
www.sedar.com
,
many of which are beyond the control of the Company. Forward-looking statements contained in
this press release are expressly qualified by this cautionary statement.
The forward-looking statements contained in this press release are made as of the date of this
press release. Except as required by law, the Company disclaims any intention and assumes no
obligation to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. Additionally, the Company undertakes no obligation to
comment on the expectations of, or statements made by, third parties in respect of the matters
discussed above.
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.
SOURCE
North Peak Resources Ltd.
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For further information:
Please contact: Brian Hinchcliffe, CEO, Phone: +1-647-424-2305, Email:
[email protected], Website: www.northpeakresources.com; Chelsea Hayes, Director,
Phone: +1-647-424-2305, Email:[email protected]
CO: North Peak Resources Ltd.
CNW 09:00e 10-APR-23