Goldstrike Forms Strategic Alliance with Newmont Providing FOR C$53,000,000 (US$39,500,000) Investment IN Goldstrike and Plateau
TSX-V: GSR
APRAF.PK
Frankfurt: KCG1
GOLDSTRIKE RESOURCES LTD.
1300 - 1111 West Georgia Street
Vancouver, British Columbia
Canada, V6E 4M3
Telephone: 604 681 1820
Facsimile: 604 681 1864
IR: 604 210 2150
GoldStrikeResources.com
Twitter.com/GoldstrikeRes
GOLDSTRIKE FORMS STRATEGIC ALLIANCE WITH NEWMONT PROVIDING FOR
C$53,000,000 (US$39,500,000) INVESTMENT IN GOLDSTRIKE AND PLATEAU
March 6, 2017 – Goldstrike Resources Ltd. (GSR.V) is pleased to announce that it has entered into a
strategic alliance with Newmont Mining Corporation and its subsidiary , Newmont Canada FN Holdings
ULC (“Newmont”), pursuant to which Newmont has agreed to purchase 12,705,715 units of Goldstrike
by way of non-brokered private placement (the “Initial Private Placement”) at the price of C$0.4742 per
unit, for an aggregate cost of ~C$6,025,050 (US$4,500,000), and pursuant to which Goldstrike has agreed
to grant to Newmont the right to earn a 51% interest in Goldstrike’s Plateau project, Yukon, by (i) making
cash payments totaling ~C$8,000,000 to Goldstrike (US$6,000,000, of which US$1,000,000 is payable on
closing and an additional US$1,000,000 by December 15,2017 is mandatory); (ii) incurring a minimum of
~C$17,400,000 (US$13,000,0000) in exploration expenditures on Plateau; and (iii) completing an NI 43 -
101 Resource Estimate (Phase 1 ). Newmont’s firm commitments over the first two years of Phase 1,
including the financing, cash payments and exploration expenditures, total C$14,658,450.
If Newmont elects to proceed with Phase 2, it must incur a minimum of an additional ~$21,400,000
(US$16,000,000) in exploration expenditures and complete a fe asibility study by December 15, 2027 to
earn an additional 24 %. If it does not complete Phase 1 or Phase 2 , its interest will revert to 49%.
Newmont’s total investment to complete Phases 1 and 2, including the financing, cash payments and
exploration expenditures, will be a minimum of ~C$53,000,000 (US$ 39,500,000). After completion of
Phase 2, Newmont must fund all expenditures on Plateau , including ongoing drilling and other
exploration, and environmental compliance, until it delivers a program and budg et for the development
of the first mine or mines on the property , and, if Goldstrike then exercises its Financing Option,
Newmont must fund 100% of all costs relating to the Plateau project for the duration of the Venture ,
including all mine development c osts, with Goldstrike’s share of such costs to be repaid from 80% of
Goldstrike’s share of project cash flow. Details of these arrangements are set out below.
“We are very pleased to have secured an important investment and strategic alliance with an indu stry
leader such as Newmont, on favourable terms that minimizes dilution to our shareholders ” reported
Terrence King, Goldstrike’s President and CEO. “ Goldstrike is now fully funded to move forward and
unlock the full potential of the district scale Plateau gold project.”
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“Goldstrike will now have the time and resources to advance its plans to optimize value for our
shareholders on the 100% owned and drill ready Lucky Strike gold project, located in the heart of the
White Gold Camp” said Bill Chornobay, Goldstrike’s COO. “We look forward to reporting the results from
both Plateau and Lucky Strike on what is shaping up to be our busiest exploration season to date.”
The Plateau Project
The Plateau property is a newly discovered district scale gold system consisting of more than 2000 claims
covering some 350 square kilometers that have produced excellent initial drill results and widespread
high grade gold mineralization found over 50 km that remains open, is largely unexplored and has many
of the early indicators of an emerging gold camp in the making.
The Lucky Strike Project
Goldstrike’s Lucky Strike property, in the heart of the White Gold Camp, is drill ready as a result of the
2015 and 2016 programs carried out on it, and multiple drill targets have be en selected to test this 10
km gold trend. Lucky Strike consists of 751 contiguous claims covering more than 150 square kilometers,
is contiguous with Kinross’ Golden Saddle property and is 100% owned by Goldstrike. It has a licensed
air strip and the Coffee Creek haul road runs right through it in three locations.
Lucky Strike has attracted strong industry interest and management continues to assess its many options
on how best to optimize value of this strategically located gold discovery and the nearby BRC claims,
located only 4.5 kilometers northeast of the Golden Saddle deposit, for its shareholders.
The Investment Agreement - C$6,025,050
Pursuant to an agreement dated March 5, 2017 (the “Investment Agreement”), Newmont has agreed to
fund the Initial Private Placement. Each unit to be issued on closing of the Initial Private Placement has
been priced at two times the 20 day value weighted average trading price of the Company’s shares
(C$0.4742). Each unit will be comprised of one common share of t he Company and one warrant
exercisable to purchase one additional common share of the Company for C$0.75 for four years after
closing, subject to acceleration if the Company's Shares have a closing price equal to or higher than
C$1.50 per share for ten consecutive trading days on the TSX Venture Exchange (the “TSX-V”).
All proceeds from the Initial Private Placement will be used to fund the 2017 exploration program on the
Company’s Plateau project, which will be jointly managed by Newmont and the Company
The Investment Agreement also provides that for three years Newmont will have the option (the “Equity
Option”) to purchase that number of units which will result in Newmont holding up to 19.9% of the
Company’s common shares. Each such unit will be issuable at a 10% or 15% premium to market and will
be comprised of one common share and one warrant . The warrants will be exercisable at two times the
issue price of the unit for two years.
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All securities issued pursuant to the Investment Agreement will be sub ject to a four -month hold period
following their respective dates of distribution . Newmont may not hold more than 19.9% of the
Company’s outstanding shares.
The Investment Agreement also contemplates the possibility of a spin -off of the Company’s Lucky Strike
and BRC projects into a separate company (a "Spin-out Company").
The Earning and Venture Agreement - C$48,861,500
On closing of the Initial Private Placement (“Closing”), Newmont Mining Corporation, Newmont and the
Company will enter into an Earning and Venture Agreement (the “Venture Agreement”) for the purpose
of further exploring the Plateau properties (the “ Properties”) and, if justified, engaging in the
development of one or more mines on the Properties. Pursuant to the Venture Agreement Newmo nt
may earn an interest in the Properties (“ Phase 1 Earn -In”) by incurring US$13,000,000 in exploration
expenditures on the Properties (the “Phase 1 Exploration Expenditures”) after exhaustion of the Private
Placement Proceeds as provided for in the Invest ment Agreement and paying to the Company the
aggregate amount of US$6,000,000 (collectively the “ Phase 1 Payments ”) plus Resource Bonuses (as
defined below), if any, required to be paid pursuant to the Venture Agreement, as follows:
(a) paying US$1,000,000 to the Company on Closing (mandatory);
(b) incurring US$4,000,000 in exploration expenditures and paying US$1,000,000 to the
Company by December 15, 2018 (mandatory);
(c) incurring an additional US$4,000,000 in exploration expenditures paying US$2,000, 000
to the Company by December 15, 2019;
(d) incurring an additional US$5,000,000 in exploration expenditures and paying
US$2,000,000 to the Company by December 15, 2019;
(e) delivering to the Company by March 31, 2021 an NI 43-101 compliant technical report (a
“Resource Report ”) which includes a resource estimate (a “ Resource Estimate ”) of
mineral reserves (proven and probable) and all mineral resources (measured, indicated
and inferred) expressed in “gold equivalent ounces”; and
(f) if the Resource Estimate is greater than the gold equivalent of 1,000,000 ounces of gold,
pay a bonus (a “ Resource Bonus ”) to the Company in an amount which is equal to
US$1.00 for each gold equivalent ounce.
If Newmont completes Phase 1 Earn -in and elects to proceed with P hase 2 Earn -in by March 31, 2021,
Newmont will have earned a 51% interest in the Properties.
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If Newmont completes Phase 1 Earn-in and does not elect to proceed with Phase 2 Earn -in by March 31,
2021, Newmont will have earned a 49% interest in the Propertie s and the Equity Option and any
unexercised warrants then held by Newmont will terminate.
If Newmont does not complete Phase 1 Earn -in, it will earn no interest in the Properties and the Equity
Option and any unexercised warrants then held by Newmont will terminate.
Phase 2 Earn-in
If Newmont completes Phase 1 Earn -in it will have the right and option to earn a further 24% interest in
the Properties (for a total of 75%) (“ Phase 2 Earn -In”) by incurring an additional US$16,000,000 in
exploration expenditures on the Properties delivering a Feasibility Study to the Company by December
15, 2027, as well as paying to the Company the amount(s) of any Resource Bonuses based on Resource
Reports delivered by Newmont during Phase 2 Earn-In (the “Phase 2 Payments”).
For so long as Newmont maintains its Earn -in rights, it will have the right to reduce the underlying
royalty on the Properties from 3% to 2% by paying US$1,000,000 to the Company and paying
C$1,500,000 to the holders of the underlying royalty. If Newmont ex ercises its right before it expires on
March 22, 2020, the underlying royalty will be reduced to 2%.
If Newmont does not complete Phase 2 Earn -in, its interest in the Properties and other Venture assets
will be reduced from 51% to 49% and any outstanding warrants then held by Newmont will terminate.
Mine Development Financing
After completion of Phase 2 Earn -In, at such time as Newmont is in possession of a feasibility study
which establishes the economic viability and technical feasibility of developing the first mine or mines on
the Properties, Newmont shall provide written Notice to the Company at least one hundred (100) days
(the “ Financing Option Period ”) before the date of commencement of funding for such development
(“Development”) in accordance wit h a program and budget (the “ First Development Program and
Budget”) for such Development supported by such feasibility study delivered with or in advance of the
Notice. Until such time as Newmont is in possession of such a feasibility study, Newmont will b e solely
responsible to fund 100% of all Venture expenditures.
Such Notice shall (A) include the First Development Program and Budget and a copy of the feasibility
study for the Development. The Company shall, within the Financing Option Period, notify Ne wmont in
writing that it will either: (i) participate in joint funding of the First Development Program and Budget at
its then Participating Interest, or (ii) elect for Newmont to solely fund the First Development Program
and Budget and, in addition, all future Exploration Expenditures, Development Expenditures and other
Venture expenditures whatsoever (the “Financing Option”).
If the Company exercises the Financing Option, then (1) the Company’s interest shall immediately be
reduced by five percent (from 25% to 20%) and Newmont’s interest shall immediately be increased by
five percent (from 75% to 80%), (2) Newmont will fund 100% of all Venture expenditures incurred after
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the Financing Option is exercised (including in respect of the Development Program an d Budget and all
other Exploration and Development carried out anywhere on the Properties and in the Area of Interest)
and (3) Twenty percent (20%) of Venture Expenditures so funded will thereafter constitute a loan to the
Company. Newmont’s recourse agai nst the Company for payment of any such Loan will be limited to
receiving eighty percent (80%) of the Company’s share of distributions in cash and/or in kind from
Commercial Production from Mines developed on the Properties. In no event shall the Company’ s
interest in the Plateau project ever by reduced below 20% if it exercises the Financing Option.
Newmont will be solely responsible to fund 100% of all Venture expenditures incurred before
commencement of the First Development Program and Budget and not r equired to be incurred to
complete Phase 1 Earn-in and Phase 2 Earn-in.
Venture Management
Upon execution of the Venture Agreement, a Management Committee will be established to determine
overall policies, objectives and procedures for the Venture. The 2 017 exploration program will be jointly
managed by Newmont and the Company. Newmont will manage thereafter.
Required Approvals
Completion of the transactions contemplated by the Investment Agreement and Venture Agreement are
subject to a number of condit ions, including Goldstrike shareholder approval and TSX Venture Exchange
acceptance. The Goldstrike intends to hold an extraordinary general meeting of its shareholders as soon
as practicable to consider a resolution approving the Agreements.
ON BEHALF OF THE BOARD
Terrence E. King
President and Chief Executive Officer
For new information from this program, please visit Goldstrike’s website at GoldstrikeResources.com. For
further information follow the Goldstrike’s tweets at Twitter.com/GoldstrikeRes or contact Jeff Stuart of
King James Capital Corporation, handling Investor Relations for the Goldstrike, by telephone at (604)
210-2150 or by email at [email protected].
Neither the 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.
Goldstrike may not proceed with the transactions described in this news release until the required
shareholder approval is obtained. There can be no assurance that the transactions will be completed as
proposed or at all. I nvestors are cautioned that, except as disclosed in the Management Information
Circular to be prepared in connection with the proposed transactions, any information released or
received with respect to the proposed transactions may not be accurate or compl ete and should not be
relied upon. Trading in the securities of Goldstrike should be considered highly speculative.
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The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has
neither approved nor disapproved the contents of this press release.
Forward-Looking Statements
Statements contained in this news release that are not historical facts are "forward -looking information"
or "forward -looking statements" (collectively, " Forward-Looking Information ") within the meani ng of
applicable Canadian securities legislation and the United States Private Securities Litigation Reform Act of
1995. Forward-Looking Information includes, but is not limited to, disclosure regarding possible events,
conditions or financial performance that is based on assumptions about future economic conditions and
courses of action; and the plans for completion of the contemplated transactions with Newmont as set
out above. In certain cases, Forward -Looking Information can be identified by the use of words and
phrases such as "anticipates", "expects", "understanding", "has agreed to" or variations of such words
and phrases or statements that certain actions, events or results "would", "occur" or "be achieved".
Although Goldstrike has attempted to ide ntify important factors that could affect Goldstrike and may
cause actual actions, events or results to differ materially from those described in Forward -Looking
Information, there may be other factors that cause actions, events or results not to be as ant icipated,
estimated or intended, including, without limitation, the risks and uncertainties related to the
contemplated transactions with Newmont not being completed in the event that the conditions
precedent thereto are not satisfied or Newmont not electi ng to proceed with additional financing or
expenditures in accordance with the terms of the agreements with Goldstrike as described above; and
uncertainties related to raising sufficient financing in a timely manner and on acceptable terms. In
making the forward-looking statements in this news release, Goldstrike has applied several material
assumptions, including the assumptions that (1) the conditions precedent to completion of the
contemplated transactions with Newmont will be fulfilled so as to permit the contemplated transactions
with Newmont to be completed within the times described above; (2) all necessary approvals and
consents, including shareholder approval, in respect of the contemplated transactions with Newmont will
be obtained in a timely man ner and on acceptable terms; and (3) general business and economic
conditions will not change in a materially adverse manner. There can be no assurance that Forward -
Looking Information will prove to be accurate, as actual results and future events could d iffer materially
from those anticipated in such statements. Accordingly, readers should not place undue reliance on
Forward-Looking Information. Except as required by law, Goldstrike does not assume any obligation to
release publicly any revisions to For ward-Looking Information contained in this news release to reflect
events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.