Aintree Announces Qualifying Transaction
AINTREE RESOURCES INC
NR 17-5
Aintree Announces Qualifying Transaction
Not for distribution to United States newswire services or for dissemination
in the United States
VANCOUVER, BC – June 5, 2017 – Aintree Resources Inc. (TSX-Venture: AI N.H) (the
“Company” or “Aintree”), a Capital Pool Company (“CPC”) listed on the NEX board of the TSX
Venture Exchange (“TSXV”), is pleased to announce that it is making application to the TSXV to
have its Tonopah Project (the “ Tonopah Project”), located near Tonopah, Nevada, acquired
from Midway Gold US Inc. (“Midway”) in March 2017, accepted as its listing property for a CPC
qualifying transaction (“QT”).
Aintree acquired the Tonopah Project by assuming certain royalty and environmental obligations
and by providing other valuable considerations including US$25,000 in cash payments. On June
22, 2015, Midway filed a voluntary petition for relief under chapter 11 of title 11 of the United
States Code in the United States Bankruptcy Court for the District of Colorado (the “ Court”). On
March 22nd, 2017, the Court issued an order authorizing the sale of the Tonopah Project by
Midway to Aintree free and clear of liens, claims and interests pursuant to applicable sections of
the Bankruptcy Code. The transaction was closed on March 24, 2017, as required under the
Bankruptcy Code. The Tonopah Project consists of 444 unpatented mineral claims, 185 of
which are subject to a royalty interest.
Aintree also enter ed into a Royalty Deed Modification and Waiver of Claims Agreement with
arm’s length parties, who are the underlying royalty holders on the Tonopah Project, to waive
certain claims by the royalty holders against Midway, eliminate advance royalty payments, and
restructuring an onerous sliding scale net smelter royalty (“ NSR”) into a flat 2% NSR structure.
In exchange, Aintree paid consideration of US$50,000 and 1.50 million common shares of the
Company (“Shares”).
The Tonopah Project
The Tonopah Project is an advanced stage exploration/evaluation project located on the prolific
Walker Lane Trend of Western Nevada. Historic drilling programs since 1980 on the Tonopah
Project and project area by a number of companies have completed a total of 284,469 feet on
drilling in 673 reverse circulation and core holes. Alteration and mineralization at the Tonopah
Project are typical of low -sulfidation, volcanic-hosted epithermal gold deposits found elsewhere
in Nevada and around the world. The deposit type is characterized by overall low original sulfide
content, and quartz -adularia and clay -sericite alteration assemblages, among others. Similar
deposits in Nevada have proven to be economic, including the Midas and Bullfrog deposits. A
number of north -south oriented mine ralized structural zones with quartz veining have been
identified at the Tonopah Project P roperty along the north -northwest Walker Lane trend,
covering an area 10,300 feet long and 1,500 feet wide. Vein structures and orientation are best
defined in the Di scovery Zone, at the center of the project site. A total of 9 mineralized zones
have been broadly outlined. Higher grade gold mineralization appears to project along some of
the veins/related structures in the Discovery Zone specifically in the Tombstone v olcanics.
Visible gold is commonly observed in and along the edges of veins, is frequently associated with
hematite, and occurs locally in coarse form. Dendritic gold has been observed in core.
In addition to the mineralized veins, there is a discontinuit y at the top of the Palmetto formation,
where tertiary volcanoclastics and ash fall tuffs (Tombstone Formation) unconformably overly
the Palmetto argillite. Mineralization is localized within a low -angle zone which includes the
erosion surface of the Palm etto, as well as certain facies in the Tombstone Formation,
particularly where veins and mineralized structures intersect this contact zone. It is interpreted
that ascending fluids entering the contact zone depositing precious metals in a favorable
chemical and textural horizon in the base of the tertiary volcanics.
Two sets of historical resource estimates have been produced for the project, one focused on
the low-angle lower-grade contact zone mineralization for the system, and the other focused on
higher grades found within high angle veins and structural zones. An initial work program will
include reconsideration of the Tonopah Project on the basis of the combined mineral systems. It
appears that mineralization occurs primarily within a low -angle contact zone, with the highest
grades localized around high angle vein and feeder structures that both cross and are
comingled with the low -angle contact zones. The renegotiation of the underlying royalty
agreement for the property (from a 7% royalty rate at gold prices in excess of $700 to a 2% gold
NSR) should allow for consideration of a much broader set of mining and processing scenarios
and is a significant positive impact to the Tonopah Project.
The Tonopah Project is well situated and can be easily accessed by paved road 20 miles from
the town of Tonopah, Nevada. Both water and power is available in close proximity to the site,
although water rights will need to be acquired. Tonopah is located within four hours’ drive of Las
Vegas, Nevada and is clos e to Round Mountain, Nevada, where equipment supply depots,
machine shops and skilled labor can be found. Aintree is in the process of assuming existing
drilling permits and replacing reclamations bonds for the Tonopah Project.
The Technical Report
A draft independent NI 43-101 Technical Report on Mineral Exploration Results for the Tonopah
Project has been prepared by Gustavson Associates of Lakewood, Colorado (the “Technical
Report”). As part of the CPC QT process, t he draft Technical Report will be submitted to the
TSXV for their review and approval. The Technical Report recommends a work program that
includes the reconstruction of a digital database to include all available assay data, lithology,
alteration and metadata about drilling, sampling and sur vey. Gustavson believes that sufficient
historical exploration data, including data and geologic understanding subsequent to a 2011
Gustavson NI 43-101 technical report, exists to complete an updated resource estimate . (See:
NI 43-101 Technical Report on the Midway Project, Nye County, Nevada , dated April 1, 2011 ;
available under the SEDAR project of Midway Gold Corp.) The resource model is expected to
focus on defining the relationship between high -angle, higher grade structures and lower -angle
contact mi neralization, and attempt to define the geostatistical relationships between these
domains. This analysis should form the basis for an exploration plan aimed at targeting
extensions to mineralization both along trend and to depth. The draft Technical R eport also
recommends a thorough review of existing metallurgical data be conducted as part of a s coping
study which will define more detailed test work to fully characterize recoveries and processing
costs based on the metallurgical review. The scoping study should be completed with the
objective of defining resources for the project, and based on this resource model, as well as
review of the available metallurgical data, to consider all available mining and processing
scenarios.
Technical information in this release has been reviewed and approved by Mr. Donald E. Hulse
(P.E.), Principal Mining Engineer of Gustavson, and a "qualified person" as that term is
defined in NI 43-101. Mr. Hulse was one of four authors of the 2011 technical report on the
Tonopah Project.
Private Placement Financing
As part of its CPC QT Aintree intends to complete a non -brokered private placement of up to
4,000,000 Shares at a price of $0.25 per Share for gross proceeds of up to $1,000,000 (the
“Offering”). Finder’s fees, if applicable, will be payable in accordance with TSXV policies.
Closing of the Offering is subject to receipt of all necessary corporate and regulatory approval s,
including the TSXV’s acceptance of the Aintree CPC QT. All securities issued in connection with
the Offering will be subject to a hold period of four months plus a day from the date of issuance.
The proceeds of the Offering will be used to settle Company debts and ordinary course
payables, fund bonding obligations, consulting fees and expenditures , including additional
technical study and drilling, arising in connection with the Tonopah Project , and for general
working capital purposes.
Management Services Agreement
The Company has entered into a Consulting Service Agreement, dated for reference April 10,
2017, (the " Services Agreement") with Kalex LLC (the " Consultant") and James B. Hesketh
("Hesketh") pursuant to which the Consultant will provide business services to the Company
through Hesketh, including having Hesketh serve in the roles of Chief Executive Officer and
President of the Company. The Consultant is a non-reporting company duly incorporated under
the laws of Colorado, U.S.A. and is wholly owned and controlled by Hesketh.
Pursuant to the terms of the Services Agreement, but subject to the TSXV’s acceptance of the
Aintree CPC QT, the Company will issue up to 2.0 million Shares to the Consultant in partial
consideration for the business services performed as follows: an initial tranche of 500,000
Shares as a signing bonus in recognition of the Consultant’s services to secure the acquisition
of the Tonopah Project; a second tranche of 500,000 Shares upon TSXV acceptance of the
CPC QT; a third tranche of 500,000 Shares upon completion of a n updated independent NI 43-
101 compliant technical report (as determined by such report being accepted for filing by the
TSXV) declaring mineral resources on the Tonopah Project; and a fourth and final tranche of
500,000 Shares upon the completion of six months of service to the Company. The Shares will
be issued pursuant to the “employee, executive officer, director and consultant” exemption in
section 2.24 of National Instrument 45-106 – Prospectus Exemptions.
Mr. Hesketh was a director to the Company at the time of entering i nto the Agreement,
constituting a related party transaction pursuant to TSXV Policy 5.9 and Multilateral Instrument
61-101 – Protection of Minority Security Holders in Special Transactions (" MI 61 -101"). The
Company will rely on section 5.5(a) of MI 61 -101 for an exemption from the formal valuation
requirement and section 5.7(1)(a) of MI 61 -101 for an exemption from the minority shareholder
approval requirement of MI 61 -101 as the fair market value of either the securities to be
distributed, or the conside ration to be received for those securities, will not exceed 25% of the
Company’s market capitalization. However, given that the Shares to be issued to the
Consultant under the Services Agreement will represent over 10% of the issued shares of
Aintree, the TSXV will require that a majority of the shareholders (other than the Consultant and
its associates and affiliates) provide a written consent to the Share consideration.
Investor Cautions
Completion of the Aintree CPC QT is subject to a number of conditions, including but not limited
to, TSXV acceptance and, if applicable pursuant to TSXV requirements, majority of the minority
shareholder approval. Where applicable, the CPC QT cannot complete until the required
shareholder approval is obtained. There can be no assurance that the transaction will be
completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or
filing statement to be prepared in connection with the Aintree CPC QT, any information released
or received with respect to the transaction may not be accurate or complete and should not be
relied upon. Trading in the securities of a CPC should be considered highly speculative.
The TSXV has in no way passed upon the merits of the proposed transaction and has neither
approved nor disapproved the contents of this press release.
On behalf of the Aintree Resources,
“James Hesketh”
James Hesketh
President & CEO
For further information please contact:
James (Jim) Hesketh
(720) 291-1775
Forward-Looking Information: This press release contains forward-looking information. All
statements, other than statements of historical fact, that address activities, events or
developments that the Company believes, expects or anticipates will or may occur in the future
(including, without limitation, statements regarding the completion of a CPC QT filing with the
TSXV and the TSXV acceptance required to complete the same, finalizing the Technical Report
and its recommend work program, the completion of the Offering and the subsequent use of the
proceeds, obtaining a required shareholder consent to the Services Agreement, and the
payment of the equity-based compensation to the Consultant) are forward-looking information.
This forward-looking information reflects the current expectations or beliefs of the Company
based on information currently available to the Company. Forward-looking information is subject
to a number of risks and uncertainties that may cause the actual results of the Company to differ
materially from those discussed in the forward-looking information, and even if such actual
results are realized or substantially realized, there can be no assurance that they will have the
expected consequences to, or effects on the Company. Factors that could cause actual results
or events to differ materially from current expectations include, among other things, the
Company being unable to satisfy the TSXV’s requirements to complete the CPC QT, the
inability to secure sufficient subscriptions to complete the Offering, the inability to obtain
shareholder consent to the Services Agreement, amendments to the Technical Report prior to it
being finalized resulting changes to the recommended work program. Forward-looking
information speaks only as of the date on which it is provided and, except as may be required
by applicable securities laws and TSXV policies, the Company disclaims any intent or obligation
to update any forward-looking information, whether as a result of new information, future events
or results or otherwise, except as required under the securities laws and stock exchange
policies applicable to the Company. Although the Company believes that the assumptions
inherent in the forward-looking information are reasonable, forward-looking information is not a
guarantee of future performance and accordingly undue reliance should not be put on such
information due to the inherent uncertainty therein.
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.
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