Prime Mining Corp. (TSX.V: PRYM) formerly ePower Metals
Inc. (TSX.V: EPWR) (“
Prime” or the
“
Company”) has acquired (the
“
Transaction”) the rights to earn a 100% interest
in the Los Reyes Gold Project (formerly known as Guadalupe de los
Reyes) (“
Los Reyes”) in Sinaloa State, Mexico. The
rights were acquired pursuant to a definitive assignment and
assumption agreement (the “
Assignment Agreement”),
dated June 25, 2019, with Minera Alamos Inc.
(“
MAI”), Vista Gold Corp. (“
Vista
Gold”), the underlying owner of Los Reyes, and the Mexican
subsidiaries of each of MAI and the Company.
In connection with completion of the
Transaction, the Company has changed its name to “Prime Mining
Corp.,” and consolidated its common share capital on a two-for-one
basis (the “Consolidation”). The Company now
intends to focus its resources and capital on the immediate
development of Los Reyes.
Andrew Bowering, Chief Executive Officer of the
Company, commented, “Since late February and our initial
discussions with Minera Alamos, a number of important strategic
changes have been implemented. Familiarity with the region and its
opportunities, plus confidence in the Los Reyes project brought
several highly qualified and successful individuals to our
management team and board of directors. Strong investor
interest has resulted in a 45% oversubscription of our current
financing while a resurging gold price is creating the perfect
storm of opportunity to build Prime into a highly successful
enterprise. Needless to say, our entire team is ready and anxious
to begin the next stage of Prime’s development.”
Terms of the Transaction
To acquire MAI’s interest in Los Reyes, the
Company has completed a cash payment of US$1,500,000 to MAI, to
reimburse MAI for the cost of an option payment made to Vista Gold
on April 23, 2019 (the “April Payment”), and will
assume MAI’s remaining option payments of US$3,000,000 in favour of
Vista Gold (collectively, the “October Payments”),
as follows:
- US$1,500,000 due October 27th, 2019; and
- US$1,500,000 on the earlier of October 27th, 2021 or a
production decision.
The Company has also issued to MAI 9,450,000
post-Consolidation common shares and 3,350,000 common share
purchase warrants entitling MAI to acquire further
post-Consolidation common shares at a price $0.50 per share for a
period of twenty-four months.
Concurrently with the entering into of the
Assignment Agreement, the Company also entered into a governance
and investor rights agreement (the “Governance
Agreement”) with MAI. Pursuant to the terms of the
Governance Agreement, among other things, MAI holds the right to
appoint one director to the board of the Company for so long as MAI
holds at least 5% of the Company’s outstanding common shares and to
participate in future financings and transactions completed by the
Company in order to maintain its pro rata equity interest in the
Company. MAI’s initial nominee under the Governance Agreement
is Bruce Durham, who has joined the board of directors of the
Company following completion of the Transaction.
The Company funded the April Payment through a
loan of Cdn$2,000,000 (the “Bridge Loan”) which
was previously arranged through a group of arm’s-length lenders
consisting of Andrew Bowering, George Dengin and Perfect Storm
Holdings Ltd. (the “Lenders”). The Bridge
Loan is unsecured, bears interest at a rate of 12% per annum,
compounded monthly, and has a term of twelve months. In
consideration for providing the Bridge Loan, the Company has paid a
commitment fee of $40,000 (the “Commitment Fee”)
and has issued 1,333,334 post-Consolidation (as defined below)
common shares to the Lenders (the “Bonus
Shares”).
In consideration for introducing the Transaction
to the Company, and for assisting in its facilitation, the Company
has also agreed to issue up to 1,216,250 post-Consolidation (as
defined below) common shares (the “Finders’
Shares”) to two arms’-length parties (collectively, the
“Finders”), Jeremy Ross and Sandwedge Consulting
Ltd. A total of 556,250 Finders’ Shares were issued upon
completion of the Transaction, with a further 330,000 Finders’
Shares to be issued upon completion of each of the October
Payments.
All securities of the Company issued to MAI, and
the Finders, in connection with the Transaction, are subject to a
four-month-and-one-day statutory hold period. In addition,
all securities issued to MAI are subject to further resale
restrictions which require MAI to notify the Company in advance of
the disposition of any securities of the Company.
Private Placement Financing
In connection with the Transaction, the Company
has completed a non-brokered private placement (the
“Financing”) of 29,051,327 units (each, a
“Unit”) at a price of Cdn$0.30 per Unit, for gross
proceeds of Cdn$8,715,398. Each “Unit” consists of one common
share of the Company and one-half-of-one common share purchase
warrant (each whole warrant, a “Warrant”).
Each Warrant entitles the holder to acquire a further common share
at a price of Cdn$0.50 per share for period of twenty-four
months. In connection with completion of the Financing, the
Company has paid finders’ fees of Cdn$340,830, and has issued
1,057,023 Warrants, to certain parties who assisted the Company by
introducing subscribers to the Financing. All securities
issued by the Company pursuant to the Financing are subject to a
four-month-and-one-day statutory hold period.
The proceeds of the Financing are intended to be
used to advance exploration and development at Los Reyes, and to
satisfy working capital requirements of the Transaction.
Resumption of Trading
The Transaction constitutes a “fundamental
acquisition” for the Company, under the policies of the TSX Venture
Exchange (the “Exchange”), on the basis that the
Company intends to devote the majority of its resources to the
development of Los Reyes following completion of the
Transaction. Trading in the Company’s common shares is
currently halted, pending completion of customary filings with the
Exchange in connection with the Transaction. Trading in the
Company’s common shares is expected to resume shortly under the
ticker symbol “PRYM”, following which the Company will continue to
be classified on the Exchange as a Tier 2 Mining Issuer. The
Company will issue a further news release once a date for the
resumption of trading has been confirmed.
Board of Directors
The Company also announces the appointment of
Daniel Kunz and Paul Larkin as directors of the Company.
Messrs. Kunz and Larkin fill the vacancies created by Michael
Collins and Michael Kobler, who have resigned from the Company to
focus on other activities. The board of directors extends its
gratitude to both Messrs. Collins and Kobler for their service to
the Company. Following the appointments of Messrs. Kunz,
Larkin and Durham, the board of directors consists of Andrew
Bowering, Gregory Liller, Jorge Ramiro Monroy, Daniel Kunz, Paul
Larkin and Bruce Durham.
Mr. Kunz has led a distinguished career in
international construction, engineering, geothermal energy, mining
and natural resource exploration and development, and brings to the
board of directors more than thirty-five years of experience with
the management and corporate governance of public natural resource
development companies. Mr. Kunz is currently Managing Partner
of Daniel Kunz & Associates, LLC, a natural resource focused
consulting company started in 2014.
Mr. Kunz commented, “With gold and silver in the
early stages of what we believe to be a major bull market, the
Company has the right team and project to achieve near-term income
and cash flow generation.”
Mr. Larkin is currently the President of the New
Dawn Group, an investment and financial consulting firm located in
Vancouver, British Columbia. New Dawn is primary involved in
corporate finance, merchant banking and administrative management
of public companies. Mr. Larkin has held numerous board and
management positions with Canadian public companies active in the
resource sector.
For further information regarding the board of
directors, readers are encouraged to review the Company’s news
release of April 24, 2019.
Investor Relations
Arrangement
The Company has engaged Brisco Capital Partners
Corp. (“Brisco”) to provide marketing and investor
relations services to the Company. Brisco is a Calgary based
IR consultancy with a 20-year history, led by entrepreneur Scott
Koyich. Brisco has represented various successful publicly traded
companies and leverages its extensive network and experience in the
capital markets. In its 20 plus year history, 13 Brisco
represented companies have been monetized for the benefit of
Brisco's clients.
The engagement of Brisco is for an initial
twelve month term, during which time they will receive a monthly
retainer of Cdn$10,000. The engagement of Brisco, and the
grant of any incentive stock options to Brisco, is subject to the
approval of the TSX Venture Exchange. The Company will
disclose the terms of any incentive stock option grant to Brisco
once an agreement on terms has been reached.
Scott Koyich, President of Brisco, commented,
“We are extremely excited to work with long time business colleague
Andrew Bowering and the Company’s experienced and well-known
technical team, as we possibly enter a bull mining cycle.”
About the Los Reyes Project
Located 43 kilometres south east of the mining
centre of Cosala, Sinaloa, Los Reyes has a mining history that
stretches back into the 1700s and has seen mining activity as
recently as the 1980s. Recent development work has focused on
conventional milling and carbon in leach extraction of gold and
silver. The Company envisions a simple heap leach operation
that potentially has significantly lower capital costs and
shortened time line to production. Los Reyes has significant
resource upside with open extensions to known resources as well as
eight additional discrete exploration targets.
Los Reyes has a historical estimate of:
Guadalupe de los Reyes |
|
Tonnes Kt |
Au oz |
Au g/T |
Ag oz |
Ag g/T |
Indicated |
6,843 |
380,100 |
1.72 |
6,315,300 |
28.71 |
Inferred |
3,200 |
155,200 |
1.49 |
3,639,000 |
34.87 |
Including |
San Miguel Indicated |
459 |
47,100 |
3.19 |
1,141,800 |
77.37 |
San Miguel Inferred |
583 |
41,500 |
2.21 |
1,215,000 |
64.75 |
The resource model for Los Reyes was prepared by Tetra Tech,
Inc. of Golden, Colorado for MAI, based on historical work
conducted by MAI and Vista Gold, the underlying owners of Los
Reyes. The model is presented in a geological report
commissioned by the Company in connection with the Transaction, and
dated effective May 23, 2019. A copy of the report is
available under the Company’s profile on SEDAR (filed August 27,
2019). Mineral resources that are not mineral reserves do not
have demonstrated economic viability.
The Company is not treating these historical
estimates as current and has not completed sufficient work to
classify these historical estimates as current mineral
resources. While the Company is not treating these historical
estimates as current, it does believe the work conducted by MAI,
Vista Gold and Tetra Tech, Inc., is reliable and the information
may be of assistance to readers. Following closing of the
Transaction, the Company intends to commence work on a new resource
calculation for Los Reyes.
Bruce Kienlen, P.Geo., is Vice President of
Exploration for the Company and is a qualified person for the
purposes of National Instrument 43-101. Mr. Kienlen has
reviewed and approved the technical content in this news
release.
About Prime Mining Corp (TSX.V: PRYM)
Prime Mining (TSX.V: PRYM) is an ideal mix of
successful mining executives, strong capital markets personnel and
experienced local operators who have combined to build a new and
near term gold producer at the historically productive Los Reyes
project in Sinaloa, Mexico. The location boasts a mining history
spanning hundreds of years of activity alongside a stable and
established regional mining infrastructure. Decades of extensive
fieldwork and technical study have positioned Los Reyes to be
advanced cost effectively and quickly.
In addition to its readiness for operations, Los
Reyes holds substantial resource upside based on open extensions of
known resources, 10 kilometres of undrilled strike length and at
least 8 additional exploration targets.
Prime Mining has a well planned capital
structure with high team and insider ownership.
For more information please visit
www.primeminingcorp.ca and follow us on Twitter, Facebook or
LinkedIn.
ON BEHALF OF THE BOARD OF DIRECTORS
Andrew Bowering
Chief Executive Officer
For further information, please contact:
Tyler RossVP Investor RelationsPrime Mining
Corp.1507 – 1030 West Georgia StreetVancouver, BC, V6E
2Y3Telephone: (604) 428-6128Facsimile: (604) 428-6430E:
tyler@primeminingcorp.ca |
|
Scott KoyichPresident and CEOBrisco Capital
Partners Corp.#400 - 505 8th Avenue S.W.Calgary, AB T2P
1G2Telephone: (403) 262-9888Facsimile: (403) 263-1339E:
skoyich@briscocapital.com |
|
|
|
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Forward Looking Information
Information set forth in this document may
include forward-looking statements. While these statements reflect
management's current plans, projections and intents, by their
nature, forward-looking statements are subject to numerous risks
and uncertainties, some of which are beyond the control of the
Company. Readers are cautioned that the assumptions used in
the preparation of such information, although considered reasonable
at the time of preparation, may prove to be imprecise and, as such,
undue reliance should not be placed on these forward-looking
statements. There is no assurance the transactions noted above will
be completed on the terms as contemplated, or at all. The
Company’s actual results, programs, activities and financial
position could differ materially from those expressed in or implied
by these forward-looking statements.
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