Outback Announces Acquisition of Finnish GOLD Project Portfolio from S2 Resources and Concurrent $5 Million Financing
OUTBACK ANNOUNCES ACQUISITION OF
FINNISH GOLD PROJECT PORTFOLIO FROM
S2 RESOURCES AND CONCURRENT $5
MILLION FINANCING
TSX.V: OZ
|
OTCQB: OZBKF
|
FSE: S600
VANCOUVER, BC
,
March 1, 2024
/CNW/ -
Outback Goldfields Corp
. (the "
Company
" or
"
Outback
") (TSXV: OZ) (OTCQB: OZBKF) is pleased to announce that it has entered into a letter
of intent dated
February 16, 2024
(the
Letter of Intent
") with S2 Resources Ltd. ("
S2
") to acquire
all of S2's highly prospective portfolio of gold projects in
Finland
(the "
S2
Finnish Projects
"), by way
of an acquisition (the "
Transaction
") of S2's wholly-owned Finnish subsidiary, Sakumpu Exploration
Oy (the "
S2 Subsidiary
"). On
March 1, 2024
, Outback notified S2 that it was satisfied with the
results of its due diligence investigation, and the parties are now committed to proceeding with the
Transaction subject to the terms and conditions set out in the Letter of Intent. Depending on the
price and size of the Offering (as defined below), the Transaction may constitute a "Reverse
Takeover" of Outback in accordance with Policy 5.2 –
Changes of Business and Reverse
Takeover
s of the TSX Venture Exchange (the "
TSXV
").
In addition, Outback will grant S2 an option (the "
Joint Venture Earn-In
") to earn an interest in
Outback's Glenfine, Silver Spoon, Ballarat West and Yeungroon gold projects, located in the
Victorian Goldfields,
Australia
(the "
Outback Australian Projects
"). The Outback Australian
Projects are expected to have exploration synergies with S2's gold projects also located in the
Victorian Goldfields, near the
Fosterville
gold mine.
"This is a transformative acquisition for Outback, providing our company with a world-class portfolio
of projects in a highly prospective jurisdiction," commented
Chris Donaldson
, CEO of Outback. "The
Central Lapland Greenstone Belt of
Northern Finland
is an emerging gold camp and is host to
several recent gold discoveries including
Europe's
largest primary gold mine, Agnico Eagle's Kittilä
Mine, which produces over 200koz gold per annum. We look forward to working with S2 on
completing this transaction and focusing our technical team solely on making gold discoveries in
Finland
."
Mark Bennett
, Executive Chairman of S2 stated, "We are very pleased to partner with Outback to
create a new Canadian-listed company focused on exploring S2's portfolio of highly prospective gold
projects in
Finland
. S2 has had significant early-stage exploration success at these projects in a
short period of time. This transaction will further solidify S2 as a leading explorer in the
Greater
Fosterville
area, allowing Outback to solely focus on advancing exploration in
Finland
."
Concurrent with the Transaction, Outback intends to complete a financing to raise gross proceeds of
C$5 million
(the "
Offering
").
Transaction Highlights:
Creation of a new Canadian-listed Finnish exploration company:
Canadian-listed explorers
are leading the exploration frontier in
Finland
with Rupert Resources Ltd., Aurion Resources
Ltd., and FireFox Corp. boasting a combined market capitalization of approximately
C$700
million
.
Large land position in a premier district:
The S2 Finnish Projects comprise an over 35,000-
hectare land package in
Northern Finland's
Central Lapland Greenstone Belt, which is host to
world class gold and nickel-copper-cobalt-PGE deposits, including Agnico Eagle's 3.7 million
ounce Kittilä gold mine
1
, Rupert's 4.1 million ounce Ikkari gold deposit
2
, Boliden's 247 million
tonne Kevitsa copper-nickel-gold-PGE mine
3
and
Anglo American's
44 million tonne Sakatti
nickel-copper–PGE deposit
4
.
Strategic partnerships in
Finland
:
Senior gold producer
Kinross Gold
and marquee explorer
Rupert Resources are currently funding approximately
C$14 million
of exploration work pursuant
to farm into agreements on 12,000 hectares of regional ground, while Outback will maintain
100% ownership of the Paana, Ruopas, Putaanperä, Rova and Pahavuoma projects.
Defined high-grade gold target
: The Aarnivalkea West discovery on the Paana project
represents an open-ended, 1.3 km striking zone of near-surface, orogenic gold mineralization.
This target will be a priority area for future exploration programs conducted by Outback.
Strong balance sheet to execute growth:
Concurrent
C$5 million
financing will fund Outback
to advance drill-ready targets.
Experienced leadership team:
The board and management team of Outback have decades of
experience, with a demonstrated track record of exploration and the support of Inventa Capital
Corp., a
Vancouver
-based merchant bank founded in 2017 with the goal of discovering and
funding opportunities in the resource sector.
Continued exposure to Victorian Goldfields:
S2 is a proven successful explorer and controls
one of the largest landholdings in the greater
Fosterville
area, making S2 well placed to move
the Outback Australian Projects forward. Outback will retain minority interests in the Outback
Australian Projects.
About the S2 Finnish Projects
The S2 Finnish Projects comprise over 35,000 hectares in the prospective Central Lapland
Greenstone Belt ("
CLGB
") of northern
Finland
via a mix of granted exploration licences, exploration
licence applications and exploration reservations. The key projects, owned 100% by S2, include
Paana, Rova, Putaanperä, Ruopas, and Pahavuoma (Figure 1). Collectively, these projects areas
have not been extensively explored in the past, despite the CLGB hosting "world-class" gold and
nickel-copper-cobalt-PGE deposits.
Figure 1: Map showing the distribution of S2’s project portfolio with respect to significant projects
and companies in the district. (CNW Group/Outback Goldfields Corp.)
Paana Project
The Aarnivalkea West target, on the Paana Project, located approximately 24 km northwest of
Agnico's Kittilä mine (Figure 1), was initially defined via reconnaissance geochemical surveys, follow-
up base of till (BoT) drilling and shallow scout diamond drilling from 2018 to 2019. The approximately
1.3 km long, north-south trending strong muti-element (Au-Sb-As) geochemical anomaly was later
investigated with deeper diamond drilling (>
100m
) on ~100 to 250 metre centers in 2020 and 2021.
The focus of these programs, totalling 5,200 metres, was on investigating the strike and down-dip
extent of vein-hosted orogenic gold mineralization.
Most of the deeper holes intersected zones of broad and/or high-grade gold mineralisation,
highlighted by intervals such as:
65.4 metres at 1.5 g/t Au including 6.8 meters at 11.8 g/t Au from 164.5 metres down hole
(FAVD62)
5
55.5 metres at 1.6 g/t Au including 20.4 metres at 4.0 g/t Au from 158.0 metres down hole
(FAVD64)
5
79.6 metres at 0.76 g/t Au including 16.8 metres at 2.7 g/t Au from 123.0 metres and 48.0
metres at 0.96 g/t Au including 7.9 metres at 3.98 g/t Au from 214 metres down hole
(FAVD71)
6
30.5 metres at 1.9 g/t Au including 9.5 metres at 5.2 g/t Au from 32.2 metres down hole
(FAVD40)
7
Mineralisation at Aarnivalkea West is associated with intense albite-sericite-carbonate alteration,
with abundant disseminated sulfide and multi-generational deformed quartz veins. Gold
mineralisation at the Aarnivalkea West target is open at depth, down-dip to the east, and along
strike to the north and south. Outback's preliminary focus at Aarnivalkea West, will be aimed at
targeting structural and lithological controls on higher-grade zones as well as investigating the down-
dip and strike-extent of near-surface mineralization with an initial approximately 3,000 metre drill
program.
Reconnaissance scout drilling was also conducted at the Aarnivalkea East target in 2021, 2.4 km
east of Aarnivalkea West, to test a multi-element (Au-As-Sb) base of till (BoT) anomaly. Thirteen
wide spaced, shallow holes (average 100 metres depth) confirmed the presence of a strongly
altered and deformed shear zone with multiple zones of local gold mineralisation highlighted by an
intercept of 3.7 metres at 0.86 g/t gold from 85.0 metres in hole FPAD0005
8
. Similar to Aarnivalkea
West, the East target warrants systematic and deeper follow-up drill testing.
Complimentary Projects
Soil sampling across other prospective projects north of Paana (e.g., Rova and Pahasvuoma
projects, Figure 1) has previously returned broad multi-element (Au-Cu-Sb-As-Ag) geochemical
anomalies
9
. These targets are considered prospective for orogenic gold mineralization. Surface
geochemistry at the Putaanperä project, approximately 40 km northeast of Rupert Resources Ikkari
gold discovery (Figure 1), reveals a broad Au-Ag-As-Cu anomaly
9
spatially associated with the
regionally important Sirkka shear zone. These results suggest strong prospectivity for orogenic gold
mineralization across the Putaanperä project.
The Ruopas project, 60 km south of Paana and the Aarnivakea gold prospects (Figure 1), was
previously explored for the presence of magmatic nickel-copper-PGE mineralization via ground
electromagnetic surveys.
Partnerships with Majors
In
June 2021
, S2 entered into a farm-in option agreement with Kinross Gold Corporation (K:TSX)
("
Kinross
") on a 56 square kilometre area prospective for gold mineralisation. Under the agreement,
Kinross can spend up to
USD$6.5 million
(approximately
C$9 million
) to earn a 70% interest in the
Palvanen/Mesi blocks, with a minimum expenditure requirement of
USD$3.5 million
(approximately
C$5 million
) over the first three years. Outback would retain a 30% interest in these blocks if Kinross
successfully completes the earn-in.
In
August 2021
, S2 entered into another farm-in option agreement on two exploration licence
applications covering an area of 37 square kilometres with Rupert Resources Ltd. (RUP:V)
("
Rupert
"). Under this agreement, Rupert can spend up to
EUR3.4 million
(approximately
C$5
million
) to earn a 70% interest in the Sikavaara East and Sikavaara West licences, with an initial
expenditure requirement of
EUR1.2 million
(approximately
C$1.75 million
) over the first three years
(see S2's annual report for the year ended
June 30, 2022
). Outback would retain a 30% interest in
these blocks if Rupert successfully completes the earn-in.
In
June 2023
, Kinross exercised its right of first refusal, under the terms of its farm-in agreement
with S2, on the Paana East and Paan Silas licences, demonstrating the level of interest in this
region.
A press release with further information in respect of the S2 Subsidiary and the S2 Finnish Projects,
including significant financial information, will follow in accordance with the policies of the TSXV.
Summary of the Transaction
The Letter of Intent contemplates that Outback and S2 will negotiate and enter into a definitive
agreement in respect of the Transaction (the "
Definitive Agreement
") pursuant to which Outback
will acquire S2's Finnish portfolio for total consideration of
C$7,000,000
, comprised of a
C$1,500,000
cash payment and the issuance of
C$5,500,000
in common shares of Outback (the
"
Consideration Shares
"). The deemed issuance price of the Consideration Shares will be equal to
the issuance price of any common shares issued pursuant to the Offering (as defined below).
Pursuant to the Letter of Intent, the Transaction is expected to be carried out by way of a share
purchase agreement whereby Outback will acquire all of the issued and outstanding shares of the
S2 Subsidiary. The final structure and terms of the Transaction will be governed by the terms of the
Definitive Agreement, which is expected to be entered into on or around
April 6, 2024
. Upon
completion of the Transaction Outback expects to be listed as a Tier 2 Mining Issuer on the TSXV.
In connection with the Transaction, Outback intends to complete a non-brokered private placement
for minimum gross proceeds of
C$5 million
(the "
Offering
"). Details of the Offering will be
announced at a later date. Finder's fees may be paid in connection with the Offering within the limits
permitted by the policies of the TSXV.
The completion of the Transaction remains subject to a number of terms and conditions, among
other standard conditions for a transaction of this nature, including, among other things: (i) the
negotiation and execution of the Definitive Agreement; (ii) completion of the Offering; (iii) approval of
the shareholders of Outback and, if required, the shareholders of S2; (iv) the preparation of a NI 43-
101 compliant technical report for each of the material S2 Finnish Projects that is acceptable to the
TSXV and Outback; (v) the receipt of all required regulatory, stock exchanges (including the TSXV),
creditor, court, security holder and other approvals, consents, permits, waivers, exemptions and
orders; and (vi) if required by the TSXV, delivery of a sponsor report. There can be no assurance
that all of the necessary regulatory and shareholder approvals will be obtained or that all conditions
of closing will be met.
Summary of Proposed Principals
Upon completion of the Transaction, S2 will be granted the right to appoint one member to the board
of directors of Outback (the "
S2 Nominee
"). S2 has not yet identified any potential S2 Nominee.
Other than the appointment of a potential S2 Nominee, the directors and officers of Outback are not
expected to change.
In addition, it is expected that S2 will become an Insider of Outback upon completion of the
Transaction and the Offering. S2, an Australian entity, is a public company listed on the Australian
Securities Exchange under the symbol "S2R".
Sponsorship of Transaction
Sponsorship of the Transaction may be required by the TSXV unless an exemption or waiver from
this requirement is obtained in accordance with the policies of the TSXV. Neither Outback nor S2
has yet engaged a sponsor in connection with the Transaction. The parties intend to apply for an
exemption from the TSXV's sponsorship requirement. Additional information on sponsorship
arrangements will be provided once available.
Joint Venture Earn-In – Outback Australian Projects
In addition, Outback and S2 have entered into a separate binding letter of intent with respect to the
Joint Venture Earn-In, pursuant to which S2 may, over a 48 month period, earn (i) an 80% joint
venture interest in the Outback Australian Projects by incurring
A$1,200,000
of exploration
expenditures; and (ii) a 51% joint venture interest in the Glenfine project by incurring exploration
expenditures of
A$200,000
. Outback will retain a 2% royalty interest in the Australian Projects,
subject to a buydown provision. The Joint Venture Earn-In is subject to various conditions and the
parties intend to enter into a definitive agreement to govern the Joint Venture Earn-In.
Other Information relating to the Transaction
The Transaction is not a "related party transaction" as such term is defined by Multilateral Instrument
61-101 –
Protection of Minority Security Holders in Special Transactions
and is not subject to
Policy 5.9 –
Protection of Minority Security Holders in Special Transactions
of the TSXV. In
addition, the Transaction will constitute an "Arm's Length Transaction" (as such term is defined in the
policies of the TSXV).
No finder's fees are expected to be payable in connection with the Transaction.
If required under TSXV policies, Outback will obtain shareholder approval for the Transaction.
In accordance with the policies of the TSXV, trading of the common shares of Outback has been
halted as a result of this announcement and will not resume trading until such time as the TSXV
determines, which, depending on the policies of the TSXV, may not occur until completion of the
Transaction.
Additional information concerning the Transaction, the S2 Subsidiary, the S2 Finnish Projects and the
Offering will be provided once determined in subsequent news releases and in the disclosure
documents to be prepared by Outback in connection with the Transaction. Such documents will be
available in due course under Outback's SEDAR+ profile at
www.sedarplus.ca
.
Advisors and Counsel
Agentis Capital Mining Partners is acting as financial advisor to Outback. Forooghian + Company
Law Corporation is acting as legal counsel to Outback.
Technical Disclosure
The disclosure of technical or scientific information in this press release has been reviewed and
approved by Dr.
Christopher Leslie
, P.Geo., a Qualified Person as defined under the terms of
National Instrument 43-101.
The reader is cautioned that the historical drill results are based on prior data and reports prepared
by S2. The reader is cautioned not to treat them, or any part of them, as current and that a qualified
person has not done sufficient work to verify the results and that they may not form a reliable guide
to future results. The Company considers these historical results relevant as it is using this data as a
guide to plan exploration programs. No independent QA/QC protocols are known for these drilling
activities and as such analytical results may be unreliable. The Company's future exploration work
will include verification of the historical data through drilling.
Mineralization hosted on adjacent and/or nearby properties is not necessarily indicative of
mineralization hosted on the S2 Finnish Projects.
References
1. Agnico Eagle website (agnicoeagle.com),
December 31, 2022
Reserve statement.
2. Rupert Resources website (rupertresources.com),
October 24, 2023
NI 43-101 Technical Report.
3. Boliden website (boliden.com),
December 31, 2023
Mineral Reserve and Resources statement.
4. Anglo website (anglo.com),
December 2022
Ore Reserves and Mineral Resources Report.
5. Data reported in S2 Resources
July 19, 2021
news release (s2resources.com.au).
6. Data reported in S2 Resources
October 11, 2021
news release (s2resources.com.au).
7. Data reported in S2 Resources
September 26, 2019
news releases (s2resources.com.au).
8. Data reported in S2 Resources Annual Report 2021 (s2resources.com.au).
9. Data reported in S2 Resources
October 24, 2018
news release (s2resources.com.au).
About Outback
Outback is an exploration mining company that is actively exploring its package of highly prospective
gold projects. Outback is backed by Inventa Capital Corp., a
Vancouver
-based merchant bank
founded in 2017 with the goal of discovering and funding opportunities in the resource sector.
Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV
acceptance and if applicable, disinterested shareholder approval. Where applicable, the Transaction
cannot close until the required shareholder approval is obtained. There can be no assurance that the
Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing
statement to be prepared in connection with the Transaction, any information released or received
with respect to the Transaction may not be accurate or complete and should not be relied upon.
Trading in the securities of Outback should be considered highly speculative.
The TSXV has in no way passed upon the merits of the proposed transaction and has neither
approved nor disapproved the contents of this news release.
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.
Forward Looking Statements
This news release contains forward-looking statements or forward-looking information relating to the
future operations of the Company and other statements that are not historical facts. Forward-looking
statements in this news release include but are not limited to: obtaining the necessary approvals
required for the Transaction and the Offering; completion of the Transaction and the Offering and the
timing thereof; final terms of the Transaction and Offering; the benefits of the Transaction and the
Offering; and exploration activities.
Forward-looking statements are based on the reasonable assumptions, estimates, analyses and
opinions of management made in light of its experience and its perception of trends, current
conditions and expected developments, as well as other factors that management believes to be
relevant and reasonable in the circumstances at the date that such statements are made, but which
may prove to be incorrect. Management believes that the assumptions and expectations reflected in
such forward-looking statements are reasonable. Assumptions have been made regarding, among
other things: the benefits of the Transaction and the Offering; the Company's ability to carry on
exploration and development activities; the timely receipt of required approvals; the price of metals;
the integration of assets acquired by the Company; and the Company's ability to obtain financing as
and when required and on reasonable terms. Readers are cautioned that the foregoing list is not
exhaustive of all factors and assumptions which may have been used.
Forward-looking statements are subject to known and unknown risks, uncertainties and other factors
that may cause actual results to be materially different from those expressed or implied by such
forward-looking statements. Such risks, uncertainties and other factors include but are not limited to:
the Company's early stage of development; the fluctuation of the price of metals; the availability of
additional funding as and when required; the speculative nature of mineral exploration and
development; the timing and ability to maintain and, where necessary, obtain necessary permits and
licenses; the uncertainty in geologic, hydrological, metallurgical and geotechnical studies and
opinions; infrastructure risks, including access to water and power; environmental risks and hazards;
risks associated with negative operating cash flow; and risks associated with dilution. For a further
discussion of risks relevant to the Company, see the Company's other public disclosure documents.
Although management has attempted to identify important factors that could cause actual results to
differ materially from those contained in forward-looking statements, there may be other factors that
cause results not to be as anticipated, estimated or intended. There is no assurance that forward-
looking statements will prove to be accurate, as actual results and future events could differ
materially from those anticipated in such forward-looking statements. Accordingly, readers should
not place undue reliance on forward-looking statements. The Company does not undertake to
update any forward-looking statements, except as, and to the extent required by, applicable
securities laws.
SOURCE
Outback Goldfields Corp.
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For further information:
Chris Donaldson, Chief Executive Officer and Director, Tel: (604) 813-
3931 | Email: [email protected]
CO: Outback Goldfields Corp.
CNW 19:30e 01-MAR-24