RUA GOLD to acquire Siren Gold's Reefton assets and become the dominant Reefton Goldfield explorer
RUA GOLD to acquire Siren Gold's Reefton
assets and become the dominant Reefton
Goldfield explorer
VANCOUVER, BC
,
July 15, 2024
/CNW/ - Rua Gold Inc. (CSE: RUA) (OTC: NZAUF) (WKN:
A4010V) ("
RUA GOLD
" or the "
Company
") is pleased to announce it has entered into a definitive
share purchase agreement (the "
Agreement
"), pursuant to which the Company will acquire 100% of
the issued and outstanding shares of Reefton Resources Pty Limited ("
Reefton
"), a 100% owned
subsidiary of Siren Gold Ltd. (ASX:SNG) ("
Siren
") with tenements located adjacent to the
Company's suite of properties in
New Zealand's
prolific Reefton Goldfield (the "
Transaction
").
The Transaction will establish the Company as the dominant landholder in the Reefton Goldfield on
New Zealand's
South Island, with approximately 120,000 hectares ("
ha
") of tenements. The district
produced over two million ounces at gold grades ranging from 9 to 50g/t. The Reefton Goldfield is
seeing a resurgence in interest, led by the construction of Federation Mining's Blackwater mine,
which is expected to produce 70koz per annum at
US$738
/oz AISC
1
.
Actively Advancing a District-Scale Discovery in a Tier 1 Jurisdiction:
Represents the next chapter in
RUA GOLD's
development towards our goal to be a major gold
producer in
New Zealand
.
Newly consolidated project represents one of the least explored, high-grade gold districts in the
world.
Permits, access, and consents in place for aggressive drilling following a district-wide
reassessment of targets and potential on the combined land package.
The Transaction will increase regional tenement holdings from ~34k ha to ~120k ha and cover
all known past production camps outside of Blackwater and the Globe Progress mine.
Potential for lower overall project capital expenditures through the development of a potential
central processing hub.
The Transaction creates a bigger player in
New Zealand
, allowing greater opportunity to work
alongside a pro-mining Government in helping them draft their Minerals Strategy for
New
Zealand
.
Backed by team of mining professionals with +200 years of combined experience.
________________________
1
Source:
Federation-Mining-Deck-July-2023-020823-V2.pdf (federationmining.com.au)
.
More information can be found at the Company's website:
www.ruagold.com
Following the completion of the Transaction, the Company will be well positioned as the preeminent
gold explorer in
New Zealand
with a pro forma market capitalization of
~C$60 million
.
Combining properties and exploration activities in the Reefton Goldfield provides many strategic
benefits, including:
Increased profile with a very supportive local community that has a long history and skilled work
force in mining.
Opportunity to realize significant synergies and cost savings.
Combined data sets, local work force and historic knowledge, leading to higher quality target
generation with a greater scale of opportunities.
Ability to expand exploration programs and generate more consistent news flow.
Consolidation of permitting activities with an expedited project development timeline.
Transaction Highlights
Under the terms of the Agreement, Siren shall receive:
A$2 million
(
C$1.8 million
) in cash, of which
A$1 million
has been paid and the remaining
A$1 million
will be paid at the close of the Transaction; and
83,927,383 fully paid shares of RUA GOLD representing
A$18 million
(
C$16.6 million
2
), to
be issued at the close of the Transaction with agreed contractual resale restrictions.
The total consideration represents:
an implied value of
A$20 million
(
C$18.5 million
); and
an acquisition price of
~US$25
/oz AuEq based on Reefton's 0.5 Moz AuEq Resource
3
.
Upon completion of the Transaction, Siren will own ~30% of
RUA GOLD
, and Siren Chairman,
Mr.
Brian Rodan
, will join the RUA GOLD Board. Mr. Rodan is a Fellow of the Australian
Institute of Mining and Metallurgy (FAusIMM) with 48 years' experience. Previously, Mr. Rodan
was the owner and managing director of Australian Contract Mining Pty Ltd. (ACM), a contract
mining company completing
$1.5 billion
worth of work over a 20-year period. Mr. Rodan held
various roles with Eltin Limited over 15 years as General Manager between 1993 and 1996 and
Executive Director from 1996 to 1999), being
Australia's
largest full service ASX listed contract
mining company with annual turnover of +$850 million. Mr. Rodan was a founding Director of
Dacian Gold Ltd. 2013 and Desert Metals Ltd. 2020. Mr. Rodan was the founding director and
is currently Chairman of Siren, Iceni Gold Limited (ICL) and Augustus Minerals (AUG), all listed
on the ASX.
The Transaction is targeted to close in Q4-2024 (subject to regulatory approvals and
satisfaction of all conditions under the Agreement).
_______________________________
2
Calculated using RUA GOLD's 30-day VWAP on the CSE as of July 12, 2024 of C$0.1983 at an AUD:CAD exchange rate of 0.9246.
3
Gold equivalency calculated using metals prices of US$2,200/oz Au and US$20,500/t Sb.
Simon Henderson, COO of
RUA GOLD
commented: "This Transaction creates a significant
opportunity in an under explored orogenic gold district. The Company has focused on the Reefton
Goldfield and in four years combined rapid geochemical sampling, ultra-detailed geophysical
surveying and mapping to highlight the potential of exploring old workings at depth as well as several
new greenfield prospects. It is very exciting to combine
RUA GOLD
and Siren data sets, combined
knowledge, and have the whole orogenic district to explore. We will be looking at a combination of
new discoveries and scalability of historic high-grade gold mines to develop the next major gold
producer in the region."
Brian Rodan
, Chairman of Siren commented: "Having personally been involved with the Reefton
Project for over 6 years, I firmly believe that the Reefton Goldfield has enormous untapped potential
to create a substantial long-term, high-grade gold and antimony mining operation. Antimony being a
rare critical mineral will also provide the opportunity to create a world class operation that will assist
the western countries transition to greener economies through securing a long-term supply of
antimony, which is necessary to construct solar panels, wind turbines, electric vehicles, power
storage batteries and defense needs. The decisions taken by the Boards of both Siren and Rua to
take a major step to consolidate the 40km line of strike of the entire Reefton field is truly visionary
and will realize significant long-term benefits to the Reefton district as a whole. The additional flow
on effects created from this consolidation will also bring long term generational growth in regional
development through increased infrastructure spending and increased employment opportunities that
are created by the "mining multiplier affect". The significant improvement in regional infrastructure
and employment opportunities that will follow will be transformational for the entire West Coast and
New Zealand
as a whole."
The Transaction will deliver the following benefits to the Company's shareholders:
Increased scale and resources by combining projects and exploration teams.
Increased exposure to the highly prospective and under-explored Reefton Goldfield, as the
largest landholder in the district with approximately 120,000 ha of combined tenements.
The tenements owned by Reefton host a total JORC-compliant inferred mineral resource
estimate (at a 1.5 g/t Au cut-off grade) containing 444koz Au @ 3.81g/t Au and 8.7kt Sb @
1.5% Sb
4
with the excellent opportunity to define further mineralization with aggressive
exploration across the combined land package.
Improved investor visibility and positioning amongst peers, with the opportunity to broaden the
Company's shareholder base.
Potential for future operational synergies (i.e., centralized infrastructure and workforce) by
realizing economies of scale across the whole land package.
Continued exposure to the Company's highly prospective asset, Glamorgan on the North Island
of
New Zealand
.
____________________________
4
Source: Siren AGM presentation:
www.sirengold.com.au/site/pdf/3e3b3e4b-9e32-4842-aac3-809c9506778b/AGM-Presentation.pdf
.
Figure 1: Tenement map of the Reefton Goldfield. (CNW Group/Rua Gold Inc.)
Figure 2: Cross Section of historic underground mines in the Reefton Goldfield. (CNW Group/Rua
Gold Inc.)
Transaction Details
The Transaction will be effected by way of a share purchase agreement under applicable Canadian
laws.
As consideration for the acquisition of Reefton, the Company will:
pay an aggregate of
A$2.0 million
(subject to a working capital adjustment) to Siren, of which (i)
A$1.0 million
was paid by the Company upon entering into the Agreement in the form of a
forgivable loan (repayable only in the event the Agreement is terminated prior to consummation
of the Transaction), evidenced by a promissory note issued by Siren in favor of the Company
and secured by an enforceable security interest in all of Reefton's present and after-acquired
personal property; and (ii)
A$1.0 million
will be payable at the completion of the Transaction (the
"
Closing Date
"); and
on the Closing Date, issue 83,927,383 common shares in the capital of the Company to Siren at
a deemed price of
C$0.1983
per RUA GOLD Share (based on the 30-day volume-weighted
average price of the common shares on the Canadian Securities Exchange prior to the date of
the Agreement), having an aggregate value of
A$18.0 million
5
(the "
Consideration Shares
").
Key conditions precedent to the completion of the Transaction include, amongst others:
the parties obtaining all required corporate, shareholder and regulatory approvals for the
Transaction;
the parties obtaining all required material third party, regulatory and ministerial consents; and
other conditions customary for a public transaction of this nature.
____________________________
5
Calculated using RUA GOLD's 30-day VWAP on the CSE as of July 12, 2024 of C$0.1983 at an AUD:CAD exchange rate of 0.9246.
The Agreement otherwise includes customary representations, warranties, covenants and conditions
contained in agreements for transactions of this nature.
In connection with the closing of the Transaction, the Company will enter into a shareholder rights
agreement with Siren pertaining to Siren's interest in the Consideration Shares, which will include,
amongst others, the following terms:
Siren shall have the right to nominate one member to the board of directors of the Company, so
long as Siren maintains at least a 10% equity interest in the Company's issued and outstanding
common shares.
The Consideration Shares shall be subject to the following contractual resale restrictions:
22.2% will be restricted from trading for a period of six months from the Closing Date;
22.2% will be restricted from trading for a period of 12 months from the Closing Date;
22.2% will be restricted from trading for a period of 15 months from the Closing Date;
22.2% will be restricted from trading for a period of 18 months from the Closing Date; and
the remaining Consideration Shares will be restricted from trading for a period of 24
months from the Closing Date.
The contractual resale restrictions above shall be lifted if, at any time after six months following
the Closing Date,
RUA GOLD's
market capitalization is five times greater (or more) than its
market capitalization measured as of
July 12, 2024
(being the date the Agreement was signed).
For so long as Siren owns or controls 10% or more of the issued capital of
RUA GOLD
, Siren
shall agree to vote, or cause to be voted, all Consideration Shares in the same manner as the
board of directors of
RUA GOLD
at any general or special meeting of shareholders of the
Company.
Conference Call and Presentation
RUA GOLD
will host a conference call and presentation on
July 15, 2024
at
9:00 a.m.
(
Toronto
time) to discuss the Transaction.
Webcast:
Participants can access the webcast at the following link:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=hdiq90oN
An archive of the webcast will be available until end of day on
October 15, 2024
.
Conference Call:
Participants may gain expedited access to the conference call with the following
registration link
.
Upon registering, call in details will be displayed on screen. Using these call details will by-pass the
operator and avoid the call queue. Registration will remain open until the end of the live conference
call. Participants who prefer to dial-in and speak with a live operator, can access the call by
dialing
1-844-763-8274
or
+1-647-484-8814
. It is recommended that you call 10 minutes before the
scheduled start time.
Advisors and Legal Counsel
Cormark Securities Inc. is acting as financial advisor to the Company and its Board of Directors.
McMillan LLP is acting as Canadian legal counsel to the Company and Simpson Grierson is acting
as
New Zealand
legal counsel to the Company.
Red Cloud Securities Inc. is acting as financial advisor to Siren and its Board of Directors.
Steinepreis Paganin is acting as Australian legal counsel to Siren and
Cassels Brock
& Blackwell
LLP is acting as Canadian legal counsel to Siren.
Intention to list on the TSX Venture Exchange
Aligned to executing on the growth strategy, the Company is also pleased to announce that it has
applied to list the common shares of the Company on the TSX Venture Exchange ("
TSX-V
") under
the symbol "RUA". The Company's application remains subject to TSX-V approval. In connection
with listing on the TSX-V, it is expected the Company's common shares will be voluntarily delisted
from the Canadian Stock Exchange ("
CSE
").
About
RUA GOLD
RUA GOLD
(CSE: RUA, OTC: NZAUF, WKN: A4010V) is a new entrant to the mining industry,
specializing in gold exploration and discovery in
New Zealand
. With permits that have a rich history
dating back to the gold rush in the late 1800's,
RUA GOLD
combines traditional prospecting
practices with modern technologies to uncover and capitalize on valuable gold deposits.
The Company is committed to responsible and sustainable exploration, which is evident in its
professional planning and execution. The Company aims to minimize its environmental impact and to
execute on its projects with key stakeholders in mind.
RUA GOLD
has a highly skilled team of
New
Zealand
professionals who possess extensive knowledge and experience in geology, geochemistry,
and geophysical exploration technology.
For further information, please refer to the Company's disclosure record on SEDAR+ at
www.sedarplus.ca
.
Technical Information
Simon Henderson CP, AUSIMM, a qualified person under National Instrument 43-101
Standards of
Disclosure for Mineral Projects
, has reviewed and approved the technical disclosure contained
herein.
Website:
www.RUAGOLD.com
This news release includes certain statements that may be deemed "forward-looking statements".
All statements in this new release, other than statements of historical facts, that address events or
developments that the Company expects to occur, are forward-looking statements. Forward-looking
statements are statements that are not historical facts and are generally, but not always, identified
by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects",
"potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or
"should" occur and specifically include statements regarding: the Company's strategies,
expectations, planned operations or future actions; the strategic benefits of the Transaction; the
benefits of the Transaction to shareholders; closing of the Transaction and the satisfaction of the
conditions thereof, including but not limited to the receipt of all corporate and regulatory approvals
and consents; listing the Company's common shares on the TSX-V and the receipt of TSX-V
approval therefor; and delisting the common shares from the CSE. Although the Company believes
the expectations expressed in such forward-looking statements are based on reasonable
assumptions, such statements are not guarantees of future performance and actual results may
differ materially from those in the forward-looking statements.
Investors are cautioned that any such forward-looking statements are not guarantees of future
performance and actual results or developments may differ materially from those projected in the
forward-looking statements. A variety of inherent risks, uncertainties and factors, many of which are
beyond the Company's control, affect the operations, performance and results of the Company and
its business, and could cause actual events or results to differ materially from estimated or
anticipated events or results expressed or implied by forward looking statements. Some of these
risks, uncertainties and factors include: general business, economic, competitive, political and social
uncertainties; risks related to the effects of the
Russia
-
Ukraine
war; risks related to climate change;
operational risks in exploration, delays or changes in plans with respect to exploration projects or
capital expenditures; the actual results of current exploration activities; conclusions of economic
evaluations; changes in project parameters as plans continue to be refined; changes in labour costs
and other costs and expenses or equipment or processes to operate as anticipated, accidents,
labour disputes and other risks of the mining industry, including but not limited to environmental
hazards, flooding or unfavourable operating conditions and losses, insurrection or war, delays in
obtaining governmental approvals or financing, and commodity prices. This list is not exhaustive of
the factors that may affect any of the Company's forward-looking statements and reference should
also be made to the Company's annual information form dated
April 19, 2024
, filed under its
SEDAR+ profile at
www.sedarplus.ca
for a description of additional risk factors.
Forward-looking statements are based on the beliefs, estimates and opinions of the Company's
management on the date the statements are made. Except as required by applicable securities
laws, the Company undertakes no obligation to update these forward-looking statements in the
event that management's beliefs, estimates or opinions, or other factors, should change.
SOURCE
Rua Gold Inc.
View original content to download multimedia:
http://www.newswire.ca/en/releases/archive/July2024/15/c3173.html
%SEDAR: 00046287E
For further information:
RUA GOLD Contact : Robert Eckford, Chief Executive Officer, Email:
CO: Rua Gold Inc.
CNW 06:30e 15-JUL-24