St-Ge­orges unit to ac­quire op­tion for Hemlo North Limb

Stockwatch Daily - - MINES & METALS - Mr. Mark Billings re­ports

ST-GE­ORGES PLAT­INUM and Base Met­als Ltd.’s newly formed sub­sidiary, Kings of the North Corp., plans to op­tion or farm-in the Hemlo North Limb project.

The com­pany has en­tered into a let­ter of in­tent with Cana­dian Ore­bod­ies in or­der to op­tion or farm-in the com­pany’s Hemlo North Limb prop­erty, which is ap­prox­i­mately 17 kilo­me­tres north­east of the Hemlo gold mine in On­tario’s Marathon district. It cov­ers ap­prox­i­mately 7,008 hectares. A Na­tional In­stru­ment 43-101 tech­ni­cal re­port was com­pleted in De­cem­ber, 2016.

Kings of the North’s in­ter­est in the project is driven by the sim­i­lar­ity of for­ma­tions within the project bound­aries and at the nearby Hemlo mine. These por­phyry bod­ies con­tain gold within and ad­ja­cent to the prop­erty bound­aries of the Hemlo North Limb prop­erty. In ad­di­tion, mul­ti­ple gold and pre­cious metal tar­gets oc­cur within banded-iron for­ma­tion and vol­canic-hosted mas­sive sul­phides. The com­pany be­lieves the mul­ti­tude of gold and base-metal tar­gets gen­er­ated by past work cou­pled with geo­phys­i­cal anom­alies and his­toric drilling have de-risked the next phase of ex­plo­ration.

Kings of the North in­tends to com­plete a re­con­nais­sance pro­gram in the spring be­fore pri­or­i­tiz­ing its drilling pro­gram in sum­mer 2018.

Kings of the North’s pres­i­dent, Mark Billings, said: “Kings of the North Corp. is very pleased to have en­tered into this agree­ment with Cana­dian Ore­bod­ies. We are ex­cited about work­ing with Cana­dian Ore­bod­ies to ex­plore and de­velop the Hemlo North Limb gold prop­erty. This trans­ac­tion rep­re­sents a ma­jor step of our ac­qui­si­tion and devel­op­ment strat­egy for KOTN.”

Terms of the trans­ac­tion

The LOI de­scribes the terms and the con di tions t hat should lead to a for­mal agree­ment. The par­ties agree that the de­fin­i­tive agree­ment will not be en­tered into un­til KOTN can demon­strate that it has raised at least $3-mil­lion in eq­uity fi­nanc­ing.

In or­der to ac­quire an ini­tial 50-per-cent in­ter­est in the Hemlo North Limb prop­erty, KOTN agrees to:

• Pay to Cana­dian Ore­bod­ies a $50,000 cash de­posit, on or be­fore Dec. 31, 2017;

• Upon ex­e­cu­tion of the de­fin­i­tive agree­ment, is­sue to Cana­dian Ore­bod­ies a $350,000-prin­ci­pal-amount se­cured con­vert­ible note bear­ing in­ter­est at a rate of 15 per cent per an­num, cal­cu­lated monthly but payable on ma­tu­rity.

• In­cur or cause to be in­curred ex­plo­ration ex­pen­di­tures of $2-mil­lion on the prop­er­ties be­fore Dec. 31, 2018.

In or­der to ac­quire an ad­di­tional 25-per-cent in­ter­est in the Hemlo North Limb prop­erty (for a to­tal of 75 per cent), KOTN agrees to:

• Is­sue to Cana­dian Ore­bod­ies a $650,000-prin­ci­pal-amount se­cured con­vert­ible note bear­ing in­ter­est at a rate of 15 per cent per an­num, cal­cu­lated monthly but payable on ma­tu­rity.

• In­cur or cause to be in­curred an ad­di­tional $2-mil­lion in ex­plo­ration ex­pen­di­tures on the prop­er­ties and pro­vide a Na­tional In­stru­ment 43-101 tech­ni­cal re­port be­fore Dec. 31, 2019.

In or­der to ac­quire an ad­di­tional 10-per-cent in­ter­est in the Hemlo North Limb prop­erty (for a to­tal of 85 per cent), KOTN agrees to de­liver a pos­i­tive prefea­si­bil­ity study (with go­ing-for­ward rec­om­men­da­tions) on the project be­fore Dec. 31, 2021.

Cana­dian Ore­bod­ies buy­back op­tion

Cana­dian Ore­bod­ies has the op­tion to buy back up to a 25-per-cent in­ter­est in the prop­er­ties by mak­ing the fol­low­ing pay­ments to the pur­chaser:

• $1-mil­lion and

• 300 per cent mul­ti­plied by (the qual­i­fied ex­pen­di­tures in­curred by the pur­chaser, as well as any amounts in­curred in re­la­tion to the pro­duc­tion of a tech­ni­cal re­port and/or a prefea­si­bil­ity study) mul­ti­plied by (per cent in­ter­est to be bought back by the ven­dor).

Kings of the North and Cana­dian Ore­bod­ies shall pro­vide ad­di­tional in­for­ma­tion in re­gards to the contemplated trans­ac­tion and its progress in the com­ing weeks.

Karen Bax­ter con­densed this news re­lease (karenb@stock­watch.com).

Mark An­thony Billings, En­rico Di Ce­sare, Her­bert Duerr, Fran­cois Du­mas, Gary John­son, Wei-Tek Tsai, Vil­h­jal­mur Thor Vil­h­jalms­son

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