Troilus Gold Corp. (“Troilus” or the “Company”, TSX: TLG; OTCQX:
CHXMF) is pleased to announce that the Company has entered into a
definitive agreement (the “Agreement”), pursuant to which Troilus
has agreed to sell a package of 1,824 claims which represents an
area of approximately 985 square kilometres (the “Transferred
Claims”) to a subsidiary of Sayona Mining Limited (“Sayona”) by way
of an asset sale (the “Sale”). The Transferred Claims do not
include any of the claims on which Troilus has a current National
Instrument 43-101 (“NI 43-101”) gold and copper resource estimate
on which its Preliminary Economic Assessment (“PEA”) from August
2020 was based (the “Main Mineral Corridor”), nor do the
Transferred Claims include ground where the majority of recent
exploration activities were undertaken by Troilus (see Figure 1).
The Transferred Claims do include land that currently hosts the
Tortigny deposit, which is located adjacent to existing Sayona
properties and infrastructure, including its Moblan Project (see
Figure 1).
As consideration for the Sale, Troilus shall
receive 184,331,797 ordinary Shares of Sayona to be issued at
closing (the “Consideration Shares”), at a price of C$0.217 per
Consideration Share, representing an aggregate value of C$40
million. As additional consideration, Troilus shall be granted a 2%
net smelter returns royalty (“NSR”) on all mineral products from
the Transferred Claims. Concurrently with entering into the
Agreement for the foregoing transaction, Sayona has agreed to
subscribe for approximately C$4.8 million worth of common shares of
Troilus (“Common Shares”) on a non-brokered private placement basis
(the “Private Placement”), bringing Sayona’s investment in Troilus
to approximately 9.26%.
Justin Reid, CEO of
Troilus, commented, “We are pleased to welcome Sayona as a major
shareholder, joining Investissement Quebec, their partner in the
Moblan Lithium Project. The Sale is for claims considered at
present to be non-core assets of the Company as our current focuses
are on the development and exploration of well-defined targets over
the 400 square kilometres that we have retained all while advancing
the development of the Troilus Project. Nevertheless, given the
opportunity for continued discovery and the prospective nature of
the ground being transferred, we are excited to maintain exposure
through a 2% NSR. We look forward to working with Sayona in the
spirit of collaboration and cooperation as future developers and
producers in this exciting region. Upon closing of the Private
Placement and the issuance of the Consideration Shares, Troilus
will have cash and marketable securities that will provide strong
financial flexibility over the coming years as we move through
continued exploration, engineering and permitting.”
Sayona Mining Managing
Director and CEO Brett Lynch commented, “Sayona is pleased to
become a large and long-term shareholder of Troilus. Troilus and
Sayona each hold development assets and significant infrastructure
in the area, which will provide the opportunity for great synergy
to benefit both companies moving forward. We look forward to
working closely with the Troilus team and see the value opportunity
in our investment and land acquisition as we develop and expand the
Moblan Project.”
Benefits to
Troilus Shareholders
- Significantly accretive to Troilus shareholders – unlocking
substantial value in exchange for a non-core land package;
- Allows the Company to continue to advance its engineering
focused on the Main Mineral Corridor which is not part of the
Transferred Claims;
- Maintains growth potential – Transferred Claims are not subject
to the majority of recent exploration activities undertaken by
Troilus; and
- Provides for collaboration and technical/infrastructure
synergies to be recognized by both Troilus and Sayona as the
predominant development projects within the Frotêt Evans Greenstone
Belt.
Figure 1: Transferred Claims
& Excluded Claims
Terms of the
Agreement
Under the terms of the
Agreement, Sayona will issue 184,331,797 Consideration Shares to
Troilus with a value of C$40 million at an issue price equivalent
to C$0.217 per Consideration Share (the “Issue Price”). The
Consideration Shares will be unrestricted and free trading in
Australia and subject only to any trading restrictions imposed by
applicable regulatory and/or securities laws for trading in
Canada.
In addition, Troilus
has been granted a 2% NSR on all mineral products from the
Transferred Claims. Sayona will have the right to repurchase 100%
of the NSR for C$20 million in cash at any time from the date that
is 30 days prior to the first occurring commencement of commercial
production on any of the Transferred Claims. The royalty payor
shall be the holder of the Transferred Claims.
Private
Placement
In addition to the
foregoing consideration, pursuant to the Private Placement, Sayona
has agreed to subscribe, on a non-brokered private placement basis,
for 9,883,163 Common Shares at a price of C$0.49 per share for
aggregate gross proceeds to Troilus of C$4,842,749.87. Upon
completion of the Private Placement, Sayona is expected to hold
approximately 9.26% of the issued and outstanding Common Shares,
including the Common Shares it already owns. In connection with the
Private Placement, Sayona will be granted certain participation
rights to maintain its equity interest so long as it maintains said
interest at or above 5%.
The Private Placement
remains subject to applicable regulatory approvals, including the
final approval of the Toronto Stock Exchange and the availability
of a private placement exemption under Australian securities
law.
The Company intends to
use the net proceeds of the Sale and Private Placement for working
capital and general corporate purposes.
Conditions
Precedent and Closing Date
The Sale and the
Private Placement are subject to certain closing conditions,
including the receipt of any necessary final approvals by the TSX
in respect of the Private Placement. Closing of the Sale and the
Private Placement is expected to occur shortly after this
announcement.
Advisors and
Counsel
Cormark Securities
Inc. is acting as financial advisor and Cassels Brock &
Blackwell LLP is acting as legal counsel to Troilus.
Qualified PersonThe technical
and scientific information in this press release has been reviewed
and approved by Kyle Frank, P.Geo., Manager of Exploration,
who is a Qualified Person as defined by NI 43-101. Mr. Frank is an
employee of Troilus and is not independent of the Company under NI
43-101.
About Troilus Gold Corp.
Troilus Gold Corp. is a Canadian-based junior
mining company focused on the systematic advancement and de-risking
of the former gold and copper Troilus Mine towards production. From
1996 to 2010, the Troilus Mine produced +2 million ounces of gold
and nearly 70,000 tonnes of copper. Troilus is located in the
top-rated mining jurisdiction of Quebec, Canada, where, assuming
completion of the Sale, it will hold a land position of 435 km² in
the Frotêt-Evans Greenstone Belt. Since acquiring the project in
2017, ongoing exploration success has demonstrated the tremendous
scale potential of the gold system on the property with significant
mineral resource growth. The Company is advancing engineering
studies following the completion of a robust PEA in 2020, which
demonstrated the potential for the Troilus project to become a
top-ranked gold and copper producing asset in Canada. Led by an
experienced team with a track-record of successful mine
development, Troilus is positioned to become a cornerstone project
in North America.
For more information:
Justin ReidChief Executive Officer, Troilus
Gold Corp.+1 (647) 276-0050 x 1305justin.reid@troilusgold.com
Caroline ArsenaultVP Corporate Communications+1
(647) 407-7123info@troilusgold.com
The Common Shares issued in relation to the
Private Placement have not been, and will not be, registered under
the United States Securities Act of 1933, as amended (the
“U.S. Securities Act”), or any U.S. state
securities laws, and may not be offered or sold in the United
States or to, or for the account or benefit of, United States
persons absent registration or any applicable exemption from the
registration requirements of the U.S. Securities Act and applicable
U.S. state securities laws. This press release shall not constitute
an offer to sell or the solicitation of an offer to buy securities
in the United States, nor will there be any sale of these
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful.
Cautionary Note Regarding
Forward-Looking Statements and Information
This press release
contains “forward-looking statements” within the meaning of
applicable Canadian securities legislation. Forward-looking
statements include, but are not limited to, statements regarding
the expected closing of the Sale and Private Placement and the
timing thereof, the anticipated benefits of the Sale and Private
Placement for the parties thereto and their shareholders, timing of
the completion of the transactions, expected regulatory approvals,
future results of operations, performance and achievements of the
parties to the transaction, the intended use of proceeds, Troilus’
growth potential and the ability of Troilus to continue engineering
and other activities. Generally, forward-looking statements can be
identified by the use of forward-looking terminology such as
“plans”, “expects” or “does not expect”, “is expected”, “budget”,
“scheduled”, “estimates”, “forecasts”, “intends”, “continue”,
“anticipates” or “does not anticipate”, or “believes”, or
variations of such words and phrases or statements that certain
actions, events or results “may”, “could”, “would”, “will”, “might”
or “will be taken”, “occur” or “be achieved”. Forward-looking
statements are made based upon certain assumptions and other
important facts that, if untrue, could cause the actual results,
performances or achievements of Troilus to be materially different
from future results, performances or achievements expressed or
implied by such statements. Such statements and information are
based on numerous assumptions regarding present and future business
strategies and the environment in which Troilus will operate in the
future. Certain important factors that could cause actual results,
performances or achievements to differ materially from those in the
forward-looking statements include, amongst others, currency
fluctuations, the global economic climate, dilution, share price
volatility and competition. Forward-looking statements are subject
to known and unknown risks, uncertainties and other important
factors that may cause the actual results, level of activity,
performance or achievements of Troilus to be materially different
from those expressed or implied by such forward-looking statements,
including but not limited to: uncertainties with respect to
obtaining all regulatory approvals; risks of the benefits of the
transactions not being realized; there being no assurance that the
exploration program will result in expanded mineral resources;
risks and uncertainties inherent to mineral resource estimates; the
impact the COVID 19 pandemic may have on the Company’s activities
(including without limitation on its employees and suppliers) and
the economy in general; the impact of the recovery post COVID 19
pandemic and its impact on gold and other metals; the receipt of
necessary approvals; general business, economic, competitive,
political and social uncertainties; future prices of mineral
prices; accidents, labour disputes and shortages; environmental and
other risks of the mining industry, including without limitation,
risks and uncertainties discussed in the most recent Technical
Report and in other continuous disclosure documents of the Company
available under the Company’s profile at www.sedar.com. Although
Troilus has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking statements, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can
be no assurance that such statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements. Troilus does
not undertake to update any forward-looking statements, except in
accordance with applicable securities laws.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/62644bc5-a1fa-49f7-8988-19e8080809a2
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