Kainantu Completes Acquisition FOR 100% Ownership of May River Project
KAINANTU COMPLETES ACQUISITION FOR
100% OWNERSHIP OF MAY RIVER PROJECT
VANCOUVER, BC
,
April 3, 2023
/CNW/ - Kainantu Resources Ltd. (TSXV: KRL) (FSE: 6J0) ("KRL"
or the "Company"), the
Asia-Pacific
focussed gold mining company, is pleased to announce that it
has agreed to terms for the acquisition (the "Acquisition") of the remaining 90% interest in the May
River Project (the "Project") from the Hardrock Limited ("Hardrock") vendors.
Further to the announcement of
February 15, 2023
, KRL has completed negotiations with Hardrock
on terms favourable to all parties under a Share Sale Agreement (the "Agreement"), whereby KRL
will issue shares in consideration for acquiring 90% of the Project (the "Shares"). KRL already holds
the other 10% of the Project.
Key Terms of the Agreement:
KRL will acquire the remaining 90% interest in the Hardrock, bringing KRL's total ownership to
100%, subject only to final approval by the TSX-V;
Holding 100% of the Project achieves a key milestone for KRL, with the Company having full
ownership and control of this highly prospective copper-gold project;
Under the Agreement, KRL will issue script consideration of 18 million common shares
representing a value of
C$1,440,000
, based on the closing market price of KRL shares on
March 31, 2023
;
On a post completion basis this represents an approximate 17.7% interest in the Company (or
4.4% for each Hardrock shareholder);
The Shares will be held in equal allotments by the four (4) shareholders of Hardrock, each
holding will be independent of each other. No shareholders from Hardrock will become insiders
as a result of the transaction;
The Shares are issued subject to a statutory hold period of four (4) months and a day, in
accordance with applicable securities law;
In addition, the Shares are subject to a voluntary escrow of twelve (12) months for half the
shares and twenty-four (24) months for the remaining shares;
The original Option Agreement between the Company and Hardrock has been entirely replaced
by the Agreement; and
Closing and issue of the Shares is imminent, pending final approval by the TSX-V.
Matthew Salthouse, CEO of KRL, commented:
"We are delighted to announce the full Project acquisition, which will result in the 100% ownership
of this highly prospective copper-gold asset. Our work to date and historical results from the
Project have proven the value and confirm the Project's potential. We would like to thank the
Hardrock vendors for their cooperation during our strategic partnership phase and welcome them
as shareholders of the Company."
Intrinsic Value of the Project
The Project is highly prospective for gold and copper, laying adjacent to the Frieda River Project
(being one of the world's largest undeveloped copper mines). Since entering into an agreement with
Hardrock in 2021, KRL has acted as manager and conducted further studies at the Mountain Gate
and Skiraisa Prospects. These studies have supported the Company's view on the high potential of
the overall Project. Further details of the Project are contained in earlier announcements on
June 15, 2021
and
September 21, 2021
(in addition to the announcement noted above).
In relation to the acquisition, the Company views the price of
C$1,440,000
as representing fair value
for the remaining 90% interest in Hardrock. This values Hardrock at
C$1,600,000 million
with the
overall size of the tenement package of 890 km², this equates to a price of
C$1,798
per km².
By comparison, the acquisition of the Company's KRL North and KRL South projects in 2020 (as
part of the CPC listing onto the TSX-V) implied a price of
C$6,347
per km². This was supported by
a review of comparable transactions at this time in PNG (
Report
Link). No further comparable
transactions have been identified since this time.
Since the CPC listing, the price of copper has appreciated by approximately 16.5%, with current
prices of
$4.09
per pound. Gold prices have also increased by approximately 7.7%, with current
prices of
$1,980
per ounce. Given the price increases in both commodities, the Company believes
the price per km² is well supported and reasonable for the Acquisition.
May River Copper-Gold Project Summary
Located less than 10km west of
Frieda River
, the May River asset has several highly prospective
targets that KRL aims to explore in short term. Key Project prospects (Skiraisa, Foya, Eserebe,
Mountain Gate and
Iku Hill
) are situated along a 7km long N-NW trending structural corridor,
exhibiting many attributes similar to the extended mineralised system identified at the Frieda River
Project (between 10 and 15km to the east);
Soil, rock chip and channel anomalies indicate the existence of porphyry style Copper-Gold
mineralisation in addition to near surface structurally controlled and breccia-hosted epithermal gold
veins and breccias. Previous drilling at the Skiraisa prospect has demonstrated significant gold
potential:
54m
at 1.83g/t Au;
109m
at 1.53g/t Au and
96m
at 0.89g/t Au. Copper-in-soil anomalies of
>2.5% (2,500ppm) have been reported from several areas at the Mountain Gate prospect;
More information about May River project can be accessed
here
.
About Kainantu Resources (KRL)
Kainantu Resources ("KRL") is an
Asia-Pacific
focussed gold mining company with three highly
prospective gold and copper projects, KRL South, KRL North and the May River Project. All projects
are located in premier mining regions in PNG. Both KRL North and KRL South show potential to host
high-grade epithermal and porphyry mineralization, as seen elsewhere in the high-grade Kainantu
Gold District. The May River project is in close proximity to the world-renowned Frieda River
Copper-Gold Project, with historical drilling indicating the potential for significant copper-gold
projects. KRL has a highly experienced board and management team with a proven track record of
working together in the region; and an established in-country partner. KRL recently executed an
agreement to acquire the Kili Teke project in the western highlands of PNG.
Kainantu Resources
Matthew Salthouse, Chief Executive Officer (Tel: + 65 8318 8125)
Callum Jones, Corporate Development Co-ordinator (Tel: + 61 450 969 697)
Email:
Investor Relations (Jemini Capital)
Kevin Shum
Tel: +1 212 219 4670 (702)
Email:
Disclaimer and Forward-Looking Information
Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the
TSX-V) accepts responsibility for the adequacy or accuracy of this release. Disclaimer and
Forward-Looking Information Mineralization hosted on adjacent and/or nearby properties is not
necessarily indicative of mineralization hosted on the Company's property. The data disclosed in this
release relating to drilling results is historical in nature. Neither the Company nor a qualified person
has yet verified this data and therefore investors should not place undue reliance on such data, and
no representation or warranty, express or implied, is made by the Company, its affiliated companies,
or any other person as to its fairness, accuracy, completeness, or correctness. This release
contains forward-looking statements, which relate to future events or future performance and reflect
management's current expectations and assumptions. Such forward-looking statements reflect
management's current beliefs and are based on assumptions made by and information currently
available to the Company. All statements, other than statements of historical fact, are forward-
looking statements or information. Forward-looking statements or information in this news release
relate to, among other things: formulation of plans for drill testing; and the success related to any
future exploration or development programs. These forward-looking statements and information
reflect the Company's current views with respect to future events and are necessarily based upon a
number of assumptions that, while considered reasonable by the Company, are inherently subject to
significant operational, business, economic and regulatory uncertainties and contingencies. These
assumptions include; success of the Company's projects; prices for gold remaining as estimated;
currency exchange rates remaining as estimated; availability of funds for the Company's projects;
capital, decommissioning and reclamation estimates; prices for energy inputs, labour, materials,
supplies and services (including transportation); no labour-related disruptions; no unplanned delays
or interruptions in scheduled construction and production; all necessary permits, licenses and
regulatory approvals are received in a timely manner; and the ability to comply with environmental,
health and safety laws. The foregoing list of assumptions is not exhaustive. The Company cautions
the reader that forward-looking statements and information involve known and unknown risks,
uncertainties and other factors that may cause actual results and developments to differ materially
from those expressed or implied by such forward-looking statements or information contained in this
news release and the Company has made assumptions and estimates based on or related to many
of these factors. Such factors include, without limitation: fluctuations in gold prices; fluctuations in
prices for energy inputs, labour, materials, supplies and services (including transportation);
fluctuations in currency markets (such as the Canadian dollar versus the U.S. dollar); operational
risks and hazards inherent with the business of mineral exploration; inadequate insurance, or inability
to obtain insurance, to cover these risks and hazards; our ability to obtain all necessary permits,
licenses and regulatory approvals in a timely manner; changes in laws, regulations and government
practices, including environmental, export and import laws and regulations; legal restrictions relating
to mineral exploration; increased competition in the mining industry for equipment and qualified
personnel; the availability of additional capital; title matters and the additional risks identified in our
filings with Canadian securities regulators on SEDAR in
Canada
(available at
www.sedar.com
).
Although the Company has attempted to identify important factors that could cause actual results to
differ materially, there may be other factors that cause results not to be as anticipated, estimated,
described, or intended. Investors are cautioned against undue reliance on forward-looking
statements or information. These forward-looking statements are made as of the date hereof and,
except as required under applicable securities legislation, the Company does not assume any
obligation to update or revise them to reflect new events or circumstances.
SOURCE
Kainantu Resources Ltd.
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CO: Kainantu Resources Ltd.
CNW 05:01e 03-APR-23