Spruce Ridge Announces Revocation of Cease Trade Order and Provides Property Update
Spruce Ridge Announces Revocation of Cease Trade Order and Provides
Property Update
Toronto, Ontario – August 4, 2023 – Spruce Ridge Resources Ltd. (“Spruce Ridge” or the
“Company”) (TSX -V: SHL) is pleased to announce that on August 4th, 2023 the Ontario Securities
Commission (the “ OSC”) granted a full revocation of the failure-to-file cease-trade order ( the “CTO”)
issued against the Company on September 2, 2022. The Company had been subject to the CTO for failure
to meet the deadlines to file the annual audited financial statements, CEO and CFO certifications, and
management discussion and analysis (the “Annual Filings”).
The Company completed the filing of the Annual Filings on March 2, 2023 . The Company also filed
financial statements and management’s discussion and analysis for the interim periods ended July 31, 2022,
October 31, 2022, and January 31, 2023. After a review of the Company’s continuous disclosure record by
the OSC, the Company has also been advised of its failure to file the letter from the former auditor, and the
statement of executive compensation for the year ended April 30, 2022. Copies of all these filings have
now been filed and are available under the Company’s SEDAR+ profile at www.sedarplus.ca.
Spruce Ridge is working actively with the TSX Venture Exchange to revoke the trading halt imposed on
its common shares. The timing and success of this application is currently unknown, but the Company is
working diligently to ensure that its securities resume trading as soon as possible. The Company confirms
that its business has not changed and that the Company remains active and well financed with all properties
in good standing.
Update on Great Burnt Technical Report
The Company wishes to comment on its disclosure found in Technical Report entitled “Updated Mineral
Resource Estimate, and Preliminary Economic Assessment (PEA) Of The Great Burnt Copper -Gold
Property, Central Newfoundland” (the “Report”) as requested by the OSC. Page 127 of the Report lists the
formula: CuEq% = Cu% + (Au g/t x 0.687). The Company notes that t he value 0.687 (not specifically
defined in the Report) is the ratio between 1 gram of gold to 1% Cu net of recovery and payables , and at
$3.62/lb Cu at 95% recovery and 95% payable would be worth approximately US$73.03 per 1%. At
$1,650/oz Au at 95% recovery and 98% payable it would be worth approximately US$49.39 per gram. The
ratio between $49.39/$72.03 results in the value of 0.687 which was used to convert gold to copper
equivalent. The resource estimate in section 14 was completed about a year prior to the PEA and the
metallurgical testwork recorded a recovery of 55% for Au. The economic model in section 22 of the Report
uses 55% Au recovery. For more information, readers are encouraged to consult the full text of the Report
found on the Company’s SEDAR+ page at www.sedarplus.ca.
Update on Audit Committee Composition
The Company is pleased to confirm the composition of its current audit committee, which consists of H.
Vance White (Chair), Stephen Balch, and Birks Bovaird. Messrs. White and Bovaird are independent within
the guidelines prescribed by National Instrument 52-110 – Audit Committee. Mr. Balch is not independent
by virtue of his position as a senior officer of the Company. The majority of the Audit Committee is thus
independent.
Update on Dispute with Former CEO
Upon taking control of the Company’s records in August of 2022, current management was notified of
funds (the “Receivable”) owed to the Company by the former President and CEO. Part of the Receivable
was secured by a pledge of shares of another publicly traded company (the “Pledge”) between the former
President and CEO and the Company, and the funds were reported as a miscellan eous receivable on the
Company’s most recent financial statements and management’s discussion and analysis for the nine months
ended January 31, 2023. To date, the former President and CEO has not repaid the Receivable . After
reviewing the accounting recor ds, current management does not believe the funds were advanced for
legitimate business purposes. Further, after reviewing the matter with their legal counsel, current
management is of the opinion that the Pledge is unenforceable.
Current m anagement ha s been negotiating with the former President and CEO to reach acceptable
repayment terms which would not have a negative impact on the Company. Despite best efforts , current
management has been unable to reach an acceptable settlement and has commenced litigation to recover
the Receivable and costs by filing a statement of claim with the Ontario Superior Court of Justice on April
5, 2023. The Company continues to seek full repayment of the Receivable.
Due to these factors, subsequent to filing of the January 31, 2023 financial statements and MD&A, there is
now greater uncertainty surrounding the timing of recovery and quantum of the Receivable. As a result of
this, management has assessed the receivable for impairment and now intends to impair the full amount of
the miscellaneous receivable in the upcoming annual financial statements for the year ended April 30, 2023
which is an amount of $ 631,030. Current management continues to seek a resol ution that will minimize
negative impacts on the Company, and will update shareholders as these matters progress.
Cautionary Statement:
Neither 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
news release. No stock exchange, securities commission or ot her regulatory authority has approved or
disapproved the information contained herein.
This news release contains statements that constitute “forward -looking statements”. Forward -looking
statements are statements that are not historical facts and include, but are not limited to, disclosure regarding
possible events, that are based on assumptions and courses of action, and in certain cases, can be identified
by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “pot ential”
and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur, or
the negative forms of any of these words and other similar expressions. Forward-looking statements include
statements related to future plan s for the Company , statements and information regarding the anticipated
timeline for revocation of the trading halt, collection of amounts owing by the former President and CEO,
economic assessments of the Company’s mineral properties, plans to update futu re financial statements,
including impairing the Receivable, and other forward -looking information. Forward-looking statements
are based on various assumptions including with respect to the anticipated actions of securities regulators,
management plans and timelines , performance, business prospects and opportunities. Although the
forward-looking statements contained in this news release are based upon what management of the
Company believes are reasonable assumptions on the date of this news release, such assumptions may prove
to be incorrect. Forward -looking statements involve known and unknown risks and uncertainties, they
should not be read as guarantees of future performance or results, and they will not necessarily be accurate
indications of whether or not such results will be achieved. A number of factors could cause actual results,
performance or achievements to differ materially from the results discussed in the forward -looking
statements, including, but not limited to: delays or failures to resum e trading on the facilities of the TSX
Venture Exchange; an inability to collect the amounts owing by the former President and CEO in a timely
fashion or at all; an inability to develop and successfully implement exploration strategies ; the inability to
successfully recover mineral property interests ; general business, economic, competitive, political and
social uncertainties; the lack of available capital; impact of COVID-19 or the evolving situation in Ukraine
on the business of the Company; and other ris ks detailed from time -to-time in the Company’s ongoing
filings with securities regulatory authorities, which filings can be found at www.sedarplus.ca. The Company
cannot assure readers that actual results will be consistent with these forward -looking statements. Readers
are cautioned not to place undue reliance on forward -looking statements in this press release. These
forward-looking statements are made as of the date of this news re lease and the Company disclaims any
intent or obligation to update any forward-looking statement, whether as a result of new information, future
events or otherwise, unless otherwise required by law.
Contacts:
Steve Balch, President & CEO (interim)
Phone: 905.407.9586
Email: [email protected]