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VANCOUVER, July 2, 2019 /CNW/ - Further to the joint news
releases dated May 08, 2019 and
May 27, 2019, Colorado Resources Ltd.
(TSXV: CXO) ("Colorado") and Buckingham Copper Corp. ("Buckingham")
are pleased to announce that they have signed the binding
Arrangement Agreement that will result in the acquisition of
Buckingham by Colorado, along with
the addition of new Colorado Board
members and management, and a minimum $2.5
million concurrent financing.
The acquisition of Buckingham by Colorado by Plan of Arrangement is expected to
be completed on or around August 13,
2019, following corporate and regulatory approvals. Details
are summarized below. Upon completion of the Arrangement, a
$1.4 million exploration program,
including drilling, is expected to immediately commence on
Colorado's Kinaskan-Castle
Property.
Important aspects of the Plan of Arrangement:
- Colorado will acquire
Buckingham through the issuance of 12,490,054 Colorado shares. Buckingham brings two
complementary projects in northwestern British Columbia to Colorado, plus financial and technical
expertise.
- The minimum $2.5 million
financing has been arranged through commitment letters (see news
release dated May 27, 2019 for more
information), and Subscription Receipts are currently being
collected.
- The combined company will hold over 130,000 hectares of mineral
tenure focused in the Golden Triangle with initial exploration
focused on the Kinaskan-Castle property.
- Upon closing, the five-member board of Colorado will be reconstituted by the addition
of Michael Cathro and Dr.
Fletcher Morgan, and existing
Colorado Board members,
Cecil Bond, Alastair Still and Bryan
Wilson.
- Special thanks is given to the Chairman of the Board of
Colorado, Patrick Soares, for his leadership on the Board.
Mr. Soares will leave the Board at closing of the transaction and
has agreed to remain as the Chairman of the Advisory Board of
Colorado.
- Mr. Shaw, who will also be leaving as both a member of the
Board and President & CEO to pursue other interests, is thanked
for his service to Colorado.
- As previously announced, upon closing the new Colorado management will consist of CEO
Joseph Mullin and recently appointed
CFO Eric Casey, with a team of
consultants and technical advisors consisting of Justin Himmelright B.Sc, M.Eng., Mark Rebagliati B.Sc., P.Eng. and Dr.
James Oliver, Ph.D. P.Geo.
- Buckingham has received Voting Agreements from 90.3% of its
Shareholders, under which those Buckingham Shareholders agree to
vote in favor of the Plan of Arrangement.
2019 Exploration Plans
A key result of the takeover
will be the consolidation of Colorado's Kinaskan-Castle property with
Buckingham's Moat property in the Red Chris district of the Golden
Triangle of northwestern BC (see Figure 1).
The combined, "Castle" property is 19,256 hectares in
size, and lies directly west of and on-strike from Saddle South
epithermal gold-silver and Saddle North porphyry copper-gold
discoveries on GT Gold's Tatogga property. Drilling in 2018 on
Saddle North by GT Gold intersected very long intervals of
copper-gold mineralization, including hole TTD093 that intersected 0.51 g/t Au, 0.30 % Cu,
0.93 g/t Ag over 904.12 m, beginning
at 15.00 m (see GT Gold News Release
of October 10, 2018). The reader is
cautioned that results or information from an adjacent property
does not infer or indicate similar results or information will or
does occur on the Castle property.
The planned exploration program, budgeted at $1.4 million including drilling, that has been
designed for the Castle property is expected to commence in August.
A phase-1 work program will include prospecting, geological
mapping, and geochemical, magnetic and Induced Polarization (IP)
surveys to in-fill a nearly two km-long, high-priority gap in data
along the eastern Castle property boundary with GT Gold (see Figure
2). A phase-2 program, scheduled for late summer, is expected to
comprise drilling of up to 2,500 m on
high priority targets already developed, including Castle East
described below, and new targets from the phase-1 work.
Castle-Saddle Trend
The newly recognized Castle-Saddle
Trend crosses west to east from the Castle property onto the
Tatogga property of GT Gold (see Figure 2). The Trend is >10 km
in length and 1-2 km wide, and is defined by an east-west trending
zone of structural disruption, pervasive and continuous
quartz-sericite-pyrite alteration and local potassic alteration
that follow an elongate intrusion of Lower Jurassic monzodiorite
and monzonite.
At least 6.5 km of the 10 km-long Castle-Saddle Trend occurs
within the Castle property. Several known epithermal gold-silver
vein/stockwork and copper-gold porphyry prospects occur along the
trend, including the Castle, Castle Central, Castle East and Tuk
prospects on the Castle property, and the Saddle South and Saddle
North prospects on the Tatogga property of GT Gold.
While there were significant discoveries by GT Gold at Saddle
South in 2017 and Saddle North in 2018, only limited exploration
has taken place on the Castle portion of the Trend. At the Castle
Au-Cu prospect at the western end of the Trend, drilling of
4,827.2 m in 21 drillholes by
previous operators in 1988 and 2012-2013 intersected broad
low-grade Au-Cu values and narrow higher-grade Au-Cu intervals (see
Figure 2). Nevertheless, there has been no drilling for 5 km along
the trend in an eastward direction toward Saddle South.
Initial Drill Targets
Drill hole targeting has already
begun based on existing data, and will be augmented by the planned
expanded surveys. An initial high priority target for drilling is
the Castle East anomaly located 2.5 km west of GT Gold's
Saddle South Au-Ag deposit. The Castle East target was partially
defined by IP ground surveys in 2017 and 2018, and remains open for
expansion, and has never been drilled. Here a strong 400 m x 750 m
oval-shaped, high chargeability anomaly was identified on two IP
lines that cross prospective monzonite and intermediate volcanic
rocks that are pyrite-sericite altered and structurally disrupted.
This chargeability feature (20 to 40 millivolts per volt), is
coincident with an ovoid magnetic low, and is partially overlain
and flanked by a strong copper-gold soil anomaly some 1200 m by 300 m in
size with values of >300 ppm Cu and >100 ppb Au. Three
initial drill holes have been selected for this target, and a drill
permit is in place. Several other IP, geochemical and
geological targets require limited additional ground surveys prior
to drilling.
Details of the Plan of Arrangement
The Arrangement
will be implemented under the Business Corporations
Act (British Columbia)
pursuant to Section 288. Buckingham Shareholders will receive
Colorado Shares based on the Exchange Ratio. The Arrangement will
be an Arm's Length Transaction pursuant to the policies of the
Toronto Stock Exchange and the TSX Venture Exchange. Upon closing
of the Arrangement: all unexercised Buckingham Share purchase warrants will be
exchanged for warrants to purchase Colorado Shares on the basis of
the Exchange Ratio, will have a 12
cent strike price and will expire 3 years from the date of
the amendment to the warrant certificates.
The Agreement is dated June 27,
2019, and contains representations and warranties for the
benefit of each of Colorado and
Buckingham, conditions relating to shareholder, court, and
regulatory approvals, material adverse changes, and compliance with
the Agreement as are in each case customary in comparable
transactions of this nature. Completion of the Arrangement is
subject to a number of conditions being satisfied or waived by one
or both of Colorado and Buckingham
at or prior to closing of the Arrangement, including: approval of
the holders of Buckingham Shares, and warrants, together with any
requisite minority approvals; receipt of all necessary regulatory
and court approvals; and the satisfaction of certain other closing
conditions customary for a transaction of this nature as well as
approval from Newmont Goldcorp.
The Agreement includes a non-solicitation, and a superior
proposal provision on the part of both parties (subject to
customary fiduciary-out provisions). In the event of a superior
proposal for Colorado, Buckingham
has the right to either match such superior proposal or receive a
termination fee in the amount of $200,000, a refund of the $200,000 that it advanced Colorado at the time the Letter of Intent was
signed, and up to $250,000 in
reimbursement for transaction expenses. In the event of a
superior proposal for Buckingham, Colorado has the right to either match such
superior proposal or receive a termination fee in the amount of
$200,000, and may credit the
$200,000 loan that it received at the
time the Letter of Intent was executed against up to $250,000 in transaction expenses.
Details of the Arrangement, including a summary of the terms and
conditions of the Arrangement Agreement, will be disclosed in a
management information circular of Buckingham, which will be mailed
to holders of Buckingham Shares and warrants, and will also be
available on SEDAR at www.sedar.com. It is expected that a
special meeting of holders of Buckingham Shares and warrants (the
"Meeting") to approve the proposed Arrangement will be held in
August 2019 and, if approved at the
Meeting, it is expected that the Arrangement would close several
days later.
Status of Financing
The minimum $2.5 million financing has been arranged through
commitment letters (see news release dated May 27, 2019), and Subscription Receipts are
currently being collected. The financing will close concurrent to
the proposed transaction.
Lead orders for the financing have been committed by
institutions including the Konwave AG/ Gold 2000 family of funds in
Zurich.
Pricing for the subscription receipts was published on
May 27, 2019 and consists of an
$0.085 non-Flow Through unit
including a half warrant exercisable at $0.12 per full warrant for 3 years from the date
of issuance; and, a $0.12 Flow
Through unit including a half warrant exercisable at $0.15 per full warrant for 3 years from the date
of issuance.
The technical information in this release has been reviewed and
approved by Michael Cathro,
Buckingham Director, professional geoscientist, and a qualified
person under NI 43-101, and by Bill
Yeomans, professional geoscientist, independent consultant
to Colorado Resources and a qualified person under NI 43-101.
ABOUT COLORADO
Colorado Resources Ltd. is
currently engaged in the business of mineral exploration for the
purpose of acquiring and advancing mineral properties located in
the "Golden Triangle" British Columbia. The Company's main
exploration projects within British
Columbia include KSP, North ROK, Kingpin and
Kinaskan-Castle.
ABOUT BUCKINGHAM
Buckingham Copper Corp. is an
unlisted public reporting Canadian Exploration Company focused on
exploring and developing its Sofia
and Moat Properties. The Properties are located in the Toodogone
and Golden Triangle districts respectively, in British Columbia. For additional information
please visit
www.sedar.com.
ON BEHALF OF THE BOARD OF DIRECTORS OF BUCKINGHAM COPPER
CORP
"Joseph Mullin"
Chief Executive
Officer
ON BEHALF OF THE BOARD OF DIRECTORS OF COLORADO RESOURCES LTD
"Robert
Shaw"
President and Chief Executive Officer
Cautionary Notes in Release and Maps
1 This
news release contains information about adjacent properties on
which Colorado and Buckingham have
no right to explore or mine. Readers are cautioned that mineral
deposits on adjacent properties are not indicative of mineral
deposits on the Company's properties.
2 Historical
information contained in this news releases maps or figures
regarding the Company's project or adjacent properties are repeated
for historical reference only and cannot be relied upon as the
Company's QP, as defined under NI-43-101 has not prepared nor
verified the historical information.
CAUTION CONCERNING FORWARD-LOOKING
STATEMENTS
This news release contains
forward-looking statements. Forward-looking statements involve
known and unknown risks, uncertainties and assumptions and
accordingly, actual results and future events could differ
materially from those expressed or implied in such statements. You
are hence cautioned not to place undue reliance on forward-looking
statements. All statements other than statements of present or
historical fact are forward-looking statements, including
statements with respect to the Letter of Intent and the definitive
agreement(s) will be entered into and that Proposed Transaction
will be consummated on the terms and timeline provided herein or at
all, the benefits of the Proposed Transaction to Colorado and Buckingham and the receipt of all
required approvals including without limitation the shareholders of
Buckingham and applicable regulatory authorities, applicable stock
exchanges and Newmont GoldCorp. Forward-looking statements include
words or expressions such as "proposed", "will", "subject to",
"near future", "in the event", "would", "expect", "prepared to" and
other similar words or expressions. Factors that could cause future
results or events to differ materially from current expectations
expressed or implied by the forward-looking statements include
general business, economic, competitive, political and social
uncertainties; the state of capital markets; risks relating t, (i)
the impact on the respective businesses, operations and financial
condition of Buckingham and Colorado resulting from the announcement of
the Proposed Transaction and/or the failure to complete the
Proposed Transaction on terms described or at all, (ii) a third
party competing bid materializing prior to the effective date of
any definitive agreement(s) or the completion of the Proposed
Transaction, (iii) delay or failure to receive board, shareholder
regulatory or court approvals, where applicable, or any other
conditions precedent to the completion of the Proposed Transaction,
(iv) unforeseen challenges in integrating the businesses of
Buckingham and Colorado, (v)
failure to realize the anticipated benefits of the Proposed
Transaction, (vi) other unforeseen events, developments, or factors
causing any of the aforesaid expectations, assumptions, and other
factors ultimately being inaccurate or irrelevant; and other risks
described in Colorado's and
Buckingham's documents filed with Canadian securities regulatory
authorities. You can find further information with respect to these
and other risks in filings made by Colorado and Buckingham with the Canadian
securities regulatory authorities and available at www.sedar.com.
Colorado's documents are also
available on their website at www.coloradoresources.com, and
Buckingham's documents are also available at
www.buckinghamcopper.com. We disclaim any obligation to update or
revise these forward-looking statements, except as required by
applicable law.
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.
SOURCE Buckingham Copper Corp.
