Conditional Approval of Amended Opawica Sale
STELLAR AFRICAGOLD
TSX-V CONDITIONAL APPROVAL OF OPAWICA SALE
Vancouver, August 9, 2018 – John Cumming, President and Chief Executive Officer of Stellar AfricaGold Inc., (TSX-V: SPX)
("Stellar" or the "Company") announces:
CONDITIONAL APPROVAL OF AMENDED OPAWICA SALE
Further to the Company ’s June 28, 2018 news release , Stellar and Mosaic Minerals Inc . (“Mosaic”) have amended the
mineral property sale and purchase agreement for the 33 claim Opawica gold project (“Opawica”), Quebec. The amended
agreement now provides for closing the transaction into escrow with final closing following shareholder approval at the
next Annual General Meeting of Stellar shareholders scheduled for mid October, 2018. No other deal terms were altered.
The Opawica sale as amended (the “Opawica Transaction”) has received TSX Venture Exchange conditional approval. The
trans but remains subject to shareholder approval at the forthcoming AGM and final filings with the TSX-V.
ABOUT THE OPAWICA SALE
Stellar’s determination to focus on gold exploration and development at its Balandougou Gold Project in Guinea also
mandated that it divest of all non-core assets . To best monetize its last remaining non -core asset Stellar agreed to sell
Opawica to Mosaic for $360,000 to be paid by the issuance of 7,200,000 shares of Mosaic issued at a deemed price of $0.05
per share, plus a 2% Net Smelter Return royalty (“NSR”) one-half of which may be purchased by Mosaic for $1,000,000. The
$0.05 share price was based upon the issue price of the Concurrent Mosaic Financing (as defined below).
The 7,200,000 shares of Mosiac to be issued to Stellar was based upon and represents a 100% recovery of Stellar’s historical
exploration expenditures of $360,000 , while the 2% NSR provides a potential long -term upside benefit for Stellar
shareholders should a discovery be made at Opawica in the future. Opawica is an early stage exploration property with no
known discovery, no defined drill targets and no resource or reserve. As such it is of indeterminate or ‘soft’ value and not
capable of formal valuation; therefore, no formal valuation of the property or fairness opinion of the Opawica Transaction
was obtained.
The Opawica Transaction will be closed in two stages. The initial closing will be into escrow a nd is subject to : a) Mosaic
completing a concurrent equity financing of not less than $200,000 at pricing equivalent to the purchase consideration
shares, being $0.05 per share (the “Concurrent Mosaic Financing”) , and b) TSX -V Conditional A pproval of the Opawica
Transaction as a ‘Reviewable Disposition’ which has been received . The f inal closing is conditional upon shareholder
approval at the next Stellar Annual General Meeting scheduled for mid Oct ober, 2018 and providing closing documents to
the TSX-V.
After closing of the Opawica Transaction, the 7,200,000 shares of Mosiac issued to Stellar will represent between 45.14%
and 30.70% of the outstanding shares Mosaic depending upon the on the size of the Mosaic Concurrent Financing, which
may vary between $200,000, the minimum amount required under the purchase agreement between Stellar and Mosaic
for the Opawica Transaction, and $600,000, being the anticipated maximum financing amount to be sought by Mosaic.
Mosaic is a privately held company currently 100% owned by Maurice Giroux and John Cumming, both directors of Stellar .
After completion of the Opawica Transaction and the Mosaic Concurrent Financing, Maurice Giroux and John Cumming will
be minority shareholders of Mosaic.
The Opawica Transaction constitutes a related-party transaction within the meaning of TSX Venture Exchange Policy 5.9 and
Multilateral Instrument 61 -101 as two directors of the Company currently control Mosaic . The Company relied upon
exemptions from the valuation and minority shareholder a pproval requirements of MI 61 -101 contained in sections 5.5 (a)
and (b) and 5.7(1)(a) of MI 61 -101, as the Company is not listed on a specified market and the fair market value of the
Opawica Transaction does not exceed 25 per cent of the market capitalization of the Company, as determined in accordance
with MI 61-101.
ABOUT STELLAR AFRICAGOLD INC.
Stellar AfricaGold Inc. is a Canadian gold exploration company with offices in Vancouver, BC and Montreal , QC, and
operations concentrated in West Africa and in Quebec.
In addition to developing its Balandougou Gold Project in Guinea including construction of 150 tonnes per day gravity mill
(construction completed) to process a 15,000 tonnes bulk sample (processing in progress) to test the commercial economics
of gold extraction using only gravity methods , the Company also currently owns 100% of the Opawica project in the
Chibougamau mining camp, Quebec.
For further information please contact:
John Cumming, President & CEO, Stellar AfricaGold Inc., or Maurice Giroux, VP Exploration, Stellar AfricaGold Inc.,
4908 Pine Crescent, Vancouver, BC, V6M 3P6, 1035 West Laurier Street, Suite 201, Montréal, QC H2V 2L1.
Email: [email protected] Email: [email protected]
Additional information is available on the Company’s website at www.stellarafricagold.com.
On Behalf of the Board
John Cumming, LLM
President & CEO
This release contains certain "forward -looking information" under applicable Canadian securities laws. Forward -looking information reflects the
Company’s current internal expectations or beliefs and is based on information currently available to the Compan y. In some cases forward -looking
information can be identified by terminology such as "may", "will", "should", "expect", "intend", "plan", "anticipate", "believe", "estimate", "projects",
"potential", "scheduled", "forecast", "budget" or the negative of those terms or other comparable terminology. Forward looking information contained
in this news release includes, without limitation, statements relating to the completion of the Opawica Transaction and the e xploration and
development potential of the Balandougou II permit. Forward looking information are based on assumptions made by the Company. Many of these
assumptions are based on factors and events that are not within the control of the Company, and there is no assurance they will prove to be correct or
accurate. Risk factors that could cause actual results to differ materially from those predicted herein include, without limitation: the failure of Stellar to
obtain TSX-V approval of the Opawica Transaction, the failure of Mosaic to complete the Mosaic Concurrent Financing, that the business prospects and
opportunities of the Company will not proceed as anticipated; changes in the global prices for gold or certain other commodit ies (such as diesel,
aluminum and electricity); changes in U.S. dollar a nd other currency exchange rates, interest rates or gold lease rates; risks arising from holding
derivative instruments; the level of liquidity and capital resources; access to capital markets, financing and interest rates; mining tax regimes; ability to
successfully integrate acquired assets; legislative, political or economic developments in the jurisdictions in which the Comp any carries on business;
operating or technical difficulties in connection with mining or development activities; laws and regulati ons governing the protection of the
environment; employee relations; availability and increasing costs associated with mining inputs and labour; the speculative nature of exploration and
development; contests over title to properties, particularly title to undeveloped properties; and the risks involved in the exploration, development and
mining business. Risks and unknowns inherent in all projects include the inaccuracy of estimated reserves and resources, metallurgical recoveries, capital
and operating costs of such projects, and the future prices for the relevant minerals.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Ven ture Exchange) accepts
responsibility for the adequacy or accuracy of this release.