Southern Empire Resources Corp. Announces Closing of Qualifying Transaction
SOUTHERN EMPIRE RESOURCES CORP.
TSX-V: SMP
NEWS RELEASE
01-2020
March 18th, 2020
Southern Empire Resources Corp. Announces Closing of Qualifying Transaction
March
18,
2020
-
Vancouver,
British
Columbia.
Southern
Empire
Resources
Corp.
(“Southern
Empire”;
TSX-V:
SMP),
formerly
Owl
Capital
Corp.
(TSX-V:
OCC.P)
is
pleased
to
announce
that
it
has
closed
its
previously
announced
Capital
Pool
Company
(“CPC”)
Qualifying
Transaction
by
acquiring
a
75%
interest
in
the
Oro
Cruz
Gold
Project
located
in
California,
an
85%
interest
in
the
Eastgate
Gold
Project
located
in
Nevada,
USA
and
a
4.93%
undiluted
equity
interest
in
Bullfrog
Gold
Corp.
(“Bullfrog”),
an
exploration
stage
company listed on the Canadian Securities Exchange and OTC Markets, collectively, the “Gold Assets”.
Highlights
●
Southern Empire completes $3.27 million oversubscribed, non-brokered private placement
●
Two
gold
projects
with
historical
gold
production
and
significant
exploration
potential
acquired
in
the southwestern United States
●
Trading to commence at the open of markets on Tuesday, March 24, 2020 - TSX-V: SMP
As
a
result
of
closing
the
CPC
Qualifying
Transaction,
Owl
Capital
Corp.
has
changed
its
name
to
Southern
Empire
Resources
Corp.
and
will
be
listed
as
a
Tier
2
mining
issuer
on
the
TSX
Venture
Exchange,
with
the
trading symbol “SMP”, at the open of markets on Tuesday, March 24, 2020.
Terms of the Qualifying Transaction
Southern
Empire
acquired
the
Gold
Assets
pursuant
to
the
terms
of
an
asset
purchase
agreement
with
Eros
Resources
Corp.
(“Eros”)
and
Demerara
Gold
Corp.
(“Demerara”),
together,
the
“Vendors”.
In
consideration
of
the
Gold
Assets
acquired
from
the
Vendors,
Southern
Empire
issued
a
total
of
25,426,940
common
shares as follows:
(a)
2,579,000
shares
to
the
shareholders
of
Demerara
with
respect
to
the
acquisition
of
a
40%
interest
in the Eastgate Gold Project;
(b)
2,901,275
shares
to
Eros
with
respect
to
the
acquisition
of
a
45%
interest
in
the
Eastgate
Gold
Project;
(c)
8,545,000
shares
to
the
shareholders
of
Demerara
and
8,545,000
shares
to
be
issued
to
Eros
with
respect
to
the
acquisition
of
an
exclusive
option
to
acquire
an
aggregate
75%
interest
in
the
Oro
Cruz Gold Project;
(d)
2,856,665
shares
to
Eros
with
respect
to
the
acquisition
of
8,750,000
shares
and
7,750,000
share
purchase warrants in the capital of Bullfrog.
All
of
these
shares
will
be
subject
to
the
escrow
requirements
set
forth
in
TSX
Venture
Exchange
Policy
5.4
–
Escrow,
Vendor
Consideration
and
Resale
Restrictions
whereby
10%
of
the
escrowed
shares
will
be
released
on
the
initial
listing
date
and
15%
of
the
escrowed
shares
will
be
released
each
six
month
period
thereafter.
Non-Brokered Private Placement Financing
In
conjunction
with
closing
the
transaction,
Southern
Empire
has
completed
an
oversubscribed,
non-brokered
private
placement
financing
of
10,911,197
common
shares
(each
a
“Share”)
at
a
price
of
$0.30
per
Share
for
gross
proceeds
of
$3,273,359
(the
“Offering”).
These
securities
will
be
subject
to
a
hold
period
expiring
on
July
14,
2020
pursuant
to
applicable
Canadian
securities
laws
and
the
rules
of
the
TSX
Venture Exchange.
The
proceeds
of
the
Offering
will
be
used
for
exploration
work
on
the
Oro
Cruz
Gold
Project
and
general
working capital purposes.
Appointment of New Directors and Officers
As
of
the
closing
of
the
Qualifying
Transaction,
the
existing
board
of
directors
and
officers
have
resigned,
except
for
James
Hutton.
Southern
Empire’s
new
board
of
directors
will
be
Ronald
Netolitzky,
who
has
been
appointed
to
act
as
Chairman,
James
Hutton,
Bryan
Slusarchuk,
James
Currie,
Latika
Prasad
and
Dale
Wallster,
who
will
also
serve
as
Chief
Executive
Officer.
Andrew
Davidson
will
serve
as
Chief
Financial
Officer and Secretary and David Tupper as Vice President - Exploration.
Stock Option Grants
Southern
Empire
has
granted
a
total
of
4,250,000
stock
options
to
its
directors,
officers,
employees
and
consultants.
The
stock
options
have
a
five-year
term,
are
exercisable
at
$0.30
per
share
and
will
vest
immediately.
Proposed Escrow Transfers
Southern
Empire
also
announces
that
Eros
has
agreed
to
sell
a
total
of
5,000,000
escrowed
common
shares
of
Southern
Empire
to
James
Hutton,
Bryan
Slusarchuk,
Latika
Prasad
and
Dale
Wallster.
These
purchases
will
be
subject
to
TSX
Venture
Exchange
Policy
5.4
–
Escrow,
Vendor
Consideration
and
Resale
Restrictions.
Further,
Mr.
Hutton
has
agreed
to
sell
a
total
of
2,000,000
CPC
escrowed
common
shares
to
Bryan
Slusarchuk
and
Latika
Prasad.
Mr.
Hutton
will
also
purchase
820,000
CPC
escrowed
common
shares
from
arm’s length shareholders.
The Oro Cruz Gold Project
The
Oro
Cruz
Gold
Project
is
in
the
Cargo
Muchacho
Mountains
of
Imperial
County,
southeast
California,
approximately 25 kilometres (15.5 miles) northwest of Yuma, Arizona.
The
Oro
Cruz
mine
(also
historically
known
as
the
Golden
Cross
or
Tumco
mine),
is
situated
on
the
property
approximately
14
miles
southeast
of
the
currently
operating
Mesquite
gold
mine
of
Equinox
Gold
Corp,
and
is a former gold (“Au”) producer within the historical Cargo Muchacho - Tumco Mining District.
Historical
gold
mining
on
the
Oro
Cruz
Property
occurred
during
1890-1916
and
1932-1941,
producing
greater
than
150,000
troy
ounces
gold.
The
Oro
Cruz
Property
was
last
mined
for
about
one
year
during
1995
and
1996
by
the
American
Girl
Mining
Joint
Venture
(the
“AGMJV”);
operated
and
53%-owned
by
MK
Gold
Company,
a
subsidiary
of
Morrison
Knudsen
Corporation.
Gold
production
was
approximately
61,000
troy
oz
from
oxide
material
extracted
by
both
open
pit
and
underground
mining
operations,
before
the
mine
closed due to low gold prices.
Extensive
historical
drilling
at
the
Oro
Cruz
Gold
Project
has
outlined
exploration
targets
over
an
existing
high-grade
gold
zone
as
well
as
nearby
satellite
deposits.
Based
on
historical
mining,
the
oxide
gold
mineralization at the Oro Cruz Gold Project is amendable to conventional heap leach extractive methods.
In
2011,
Lincoln
Mining
Corporation
reported
a
historical
inferred
resource
estimate
totaling
341,800
ounces
gold
based
on
4,386,000
tonnes
averaging
2.20
grams
gold
per
tonne
at
a
cutoff
grade
of
0.68
g
Au/t (4,835,000 tons at 0.07 ounces gold per ton; “oz Au/ton”).
This
historical
inferred
resource
estimate
is
disclosed
in
a
technical
report
dated
April
29,
2011
prepared
for
Lincoln
Mining
Corporation
by
Tetra
Tech
Inc.
and
is
available
on
SEDAR.
The
historical
mineral
resource
estimate,
termed
“inferred
mineral
resource”,
which
is
a
category
set
out
in
NI
43-101,
was
based
on
previous
drill
hole,
underground
channel
samples
and
blasthole
assays,
and
calculated
using
ordinary
kriging to estimate gold grades in 10 foot x 10 foot x 5 foot blocks.
Accordingly,
Southern
Empire
considers
this
historical
estimate
reliable
as
well
as
relevant
as
it
represents
key
targets
for
future
exploration
work.
The
Qualified
Person
of
the
Oro
Cruz
Technical
Report
has
not
done
sufficient
work
to
classify
the
historical
estimate
as
a
current
mineral
resource
and
Southern
Empire
is
not
treating this historical estimate as current mineral resources.
The
Oro
Cruz
Gold
Project
is
currently
comprised
of
a
total
of
271
Bureau
of
Land
Management
unpatented
lode
mining
claims
totaling
roughly
2,160
hectares
(“ha”;
5,338
acres),
13
BLM
unpatented
placer
mining
claims
totaling
roughly
105
ha
(260
acres)
and
two
State
of
California
Mineral
Prospecting
Permits
covering
approximately
518
ha
(1,280
acres)
all
located
in
Imperial
County,
California
and
subject
to
survey
location related to the San Bernardino Base Line and Principal Median.
The
original
20
unpatented
lode
claims
covering
the
Oro
Cruz
mine
are
held
pursuant
to
a
third-party
agreement.
Adjacent
to
the
Oro
Cruz
Gold
Project
are
the
past-producing
American
Girl
and
Padre
y
Madre
gold mines that were operated from 1988 through 1996 by the AGMJV.
The Eastgate Gold Project
The
Eastgate
Gold
Project
is
located
approximately
90
kilometers
(55
miles)
east
of
the
city
of
Fallon
in
Churchill
County,
Nevada
and
comprises
101
unpatented
BLM
lode
mining
claims
covering
roughly
817
ha
(2,020
acres).
Eastgate
features
a
well-developed
hydrothermal
quartz
vein
system
hosting
precious
metals,
and
Southern
Empire’s
goal
is
to
define
a
high-grade,
low-
sulphidation
epithermal
gold-silver
deposit.
Multiple,
steeply
east
dipping,
north
striking,
sub-parallel
quartz-adularia
veins
occur
throughout
the
Eastgate
Property.
Between
1908-20
and
1935-57,
several
small-scale,
narrow
vein,
gold
and
silver
producers
operated
on
the
property.
These
included
the
Double
Eagle
and
Gold
Ledge
mines
which
reported historical production from 1935-57 of 3,247 oz gold and 38,152 oz silver.
Securities of Bullfrog Gold Corp.
As
part
of
Southern
Empire’s
plan
to
acquire
an
interest,
directly
or
indirectly,
in
gold
assets
in
California
and
Nevada,
it
has
acquired,
from
Eros,
8,750,000
shares
and
7,750,000
share
purchase
warrants
in
the
capital
of
Bullfrog,
which
is
incorporated
in
the
state
of
Delaware
with
its
shares
quoted
on
the
OTCQB
board
of
the
OTC
Market
Platform
and
on
the
CSE.
Bullfrog
owns,
leases
and
options
various
unpatented
and
patented
claims
that
comprise
the
gold-focused
Bullfrog
Project
near
Beatty
in
Nye
County,
Nevada.
At
this stage, the securities of Bullfrog will be a non-core asset of Southern Empire.
Qualified Person
David
Tupper,
P.Geo.,
is
a
qualified
person
within
the
context
of
National
Instrument
43-101
Standards
of
Disclosure
for
Mineral
Projects
and
has
prepared,
read
and
approved
the
technical
aspects
of
this
news
release.
On behalf of the Board of Directors,
Dale Wallster, CEO and Director
Southern Empire Resources Corp.
For further information please contact:
Lubica Keighery
at
(778) 889-5476;
Cautionary Notice on Forward-Looking Statements
Information
set
forth
in
this
news
release
contains
forward-looking
statements
that
are
based
on
assumptions
as
of
the
date
of
this
news
release.
These
statements
reflect
management’s
current
estimates,
beliefs,
intentions
and
expectations.
They
are
not
guarantees
of
future
performance.
Southern
Empire
cautions
that
all
forward
looking
statements
are
inherently
uncertain
and
that
actual
performance
may
be
affected
by
a
number
of
material
factors,
many
of
which
are
beyond
Southern
empire’s
control.
Such
factors
include,
among
other
things:
risks
and
uncertainties
relating
to
Southern
Empire’s
limited
operating
history
and
the
need
to
comply
with
environmental
and
governmental
regulations.
Accordingly,
actual
and
future
events,
conditions
and
results
may
differ
materially
from
the
estimates,
beliefs,
intentions
and
expectations
expressed
or
implied
in
the
forward-looking
information.
Except
as
required
under
applicable
securities
legislation,
Southern
Empire
undertakes
no
obligation
to
publicly
update
or
revise
forward-looking information.
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 RELEASE.