VANCOUVER, BC, July 5, 2023
/CNW/ - Fosterville South Exploration Ltd. ("Fosterville
South," "FSX," or the "Company") (TSXV: FSX) (OTCQX: FSXLF)
(Germany: 4TU) is pleased to
announce that, further to its news release dated April 19, 2023, it has entered into a definitive
amalgamation agreement (the "Amalgamation Agreement") with 15103452
Canada Inc., a wholly-owned subsidiary of FSX ("FSX Sub"), and Wild
Dog Resources Inc. ("WDR"), whereby FSX will acquire all of the
issued and outstanding common shares of WDR ("WDR Shares") by means
of a "three-cornered amalgamation" (the "Acquisition") whereby FSX
Sub and WDR will amalgamate and continue as one company, as a
wholly-owned subsidiary of FSX.
WDR owns and/or has the right to earn an interest in three (3)
separate mineral properties located in Papua New Guinea ("PNG"): the Wild Dog
Project, the Arau Project and the Kesar Creek Project
(collectively, the "WDR Properties") through an Exploration License
("EL") and Exploration License Applications ("ELA").
Highlights:
- 2166 sq. km land position assembled via the acquisition of
interests in a variety of EL and ELAs
- includes 614 sq. km project contiguous with and SE of K92
Mining Inc. exploration tenements
- includes 130 sq. km project contiguous with and NW of K92
Mining Inc. tenements, 10 km from mining operations
- PNG EL and ELAs will complement FSX's extensive gold land
package in Australia
Bryan Slusarchuk, CEO of FSX,
stated, "We are pleased that the due diligence process has
completed and that this has culminated in the execution of a
definitive agreement. With a strong treasury and experienced
technical team, we are in an excellent position to follow up on the
solid work done by WDR to date, which has resulted in the
definition of multiple high priority gold and copper drill targets.
With a new name proposed, Great Pacific Gold Corp., to better
reflect our regional focus we are also undergoing a rebranding
initiative and look forward to the launch of our new website and
related materials alongside a new trading symbol in the weeks
ahead."
Terms of the Acquisition
Pursuant to the Amalgamation Agreement, in consideration of
WDR:
- The shareholders of WDR (the "WDR Shareholders") immediately
prior to the closing of the Acquisition (the "Closing") will
receive an aggregate of approximately 16,161,441 common shares of
FSX (the "Common Shares"), and each WDR Shareholder will receive
one (1) Common Share for every 7.028 WDR Shares held (the "Exchange
Ratio") (rounded down to the nearest whole number of Common
Shares), subject to adjustment. The Exchange Ratio assumes
113,583,200 WDR Shares are outstanding immediately prior to
Closing.
- The Common Shares issued to the WDR Shareholders will be
subject to voluntary restrictions on resale, of which 33.3% of the
Common Shares will not be subject to restrictions on resale, 33.3%
of the Common Shares will be subject to restrictions on resale for
a period of three (3) months following Closing and 33.4% of the
Common Shares will be subject to restrictions on resale for a
period of six (6) months following Closing.
- The warrantholders of WDR immediately prior to Closing (the
"WDR Warrantholders") will receive an aggregate of approximately
526,892 Common Share purchase warrants (the "Warrants"), and each
WDR Warrantholder will receive Warrants exercisable to acquire such
number of Common Shares as is equal to the number of WDR Shares
issuable under each such WDR Share purchase warrant (a "WDR
Warrant") previously held by such WDR Warrantholder multiplied by
the Exchange Ratio (rounded down to the nearest whole number of
Common Shares) at an exercise price per Common Share equal to the
exercise price of such WDR Warrant per WDR Share divided by the
Exchange Ratio until the expiry time of such WDR Warrant.
- The optionees of WDR immediately prior to Closing (the "WDR
Optionees") will be granted an aggregate of approximately 1,553,679
stock options of FSX (the "Options"), and each WDR Optionee will be
granted Options exercisable to acquire such number of Common Shares
as is equal to the number of WDR Shares issuable under each such
stock option of WDR (a "WDR Option") previously held by such WDR
Optionee multiplied by the Exchange Ratio (rounded down to the
nearest whole number of Common Shares) at an exercise price per
Common Share equal to the exercise price of such WDR Option per WDR
Share divided by the Exchange Ratio until the expiry time of such
WDR Option.
Immediately prior to Closing, WDR will have a working capital of
C$1,000,000, excluding payments due
prior to Closing under the agreements relating to the WDR
Properties, payments made to satisfy all accrued fees and
termination benefits under the executive compensation agreements
and payments of corporate and legal costs in the ordinary course of
business.
On Closing, FSX proposes to appoint Iain
Martin, a director of WDR, as a director of FSX.
The Acquisition is subject to the approval of the WDR
Shareholders, TSX Venture Exchange acceptance and the
satisfaction of other customary conditions.
Information Concerning the WDR Properties
Figure 1. Papua New Guinea Project Location Map
The Wild Dog
Project
The Wild Dog Project consists of two ELAs (ELA 2516 and ELA
2761) totalling 1424 sq. km, which are located on the island of New
Britain and are approximately 50 km southwest of Rabaul and Kokopo,
PNG.
The Wild Dog Project occurs within a major NNE trending
structure of at least 26 km in length which transect apparent
volcanic caldera structures and intrusions. During the Mio-Pliocene
at least three volcanic centres, known as the Nengmutka, Keravat
and Sikut calderas, were localised along this horst and graben
zone. This structural corridor constitutes an epithermal and
porphyry hydrothermal-magmatic mineralized field.
The Nengmutka Caldera, which hosts the Wild Dog deposit, is
characterised by a suite of calc-alkaline andesite breccia and ash
flow tuff known as the Nengmutka Volcanics (Lindley, 1988). This
formation has been mapped over an area of 600 sq. km. Tonalite of
the Arabam Diorite intrudes the volcanic sequence and appears to be
partly coeval with the caldera related volcanism.
The precious metal prospects are associated with epithermal type
veining that contain gold-silver-telluride (Au-Ag-Te)
mineralisation. Gold and silver occur as native metals and as
telluride minerals. Porphyry copper-gold type mineralization also
occurs associated with these intrusion centres that usually underly
the epithermal systems. The whole of the recognised belt is held
within the Wild Dog tenements.
Within the central part of the Wild Dog project, a significant
structural corridor called the "Wild Dog – Gunsap Corridor" occurs.
The corridor is at least 15 km long and up to 4 km wide and hosts
at least three porphyry copper-gold prospects and several
epithermal gold deposits and prospects.
The original Wild Dog epithermal gold deposit occurs within the
"Wild Dog – Gunsap Corridor" in the central part of the tenements.
It was discovered in 1983, with exploration including extensive
mapping, trenching, rock sampling and drilling between 1983 and
2005 by various explorers. New Guinea Gold Limited operated a small
open pit mining operation from 2007 and 2011. No exploration has
occurred since the closure of the mine.
Figure 2. Wild Dog Project Location and Tenements
Maps
Historical work completed by a previous operator returned
significant gold assays. Channel sampling at the Kavursuki Prospect
yields 4m at 9.41 g/t Au and at the
Kargalio Vein 6m at 11.5 g/t Au.
Drilling of the Kavursuki Prospect by previous explorers,
located within the Wild Dog Zone and north of the former Wild Dog
mine, also yielded positive high-grade results.
Table 1 – Kavursuki Prospect Significant Drill
Intercepts
Hole ID
|
N
|
E
|
RL
|
Depth
|
Azim
|
Dip
|
From (m)
|
Length (m)
|
Au g/t
|
Cu ppm
|
90KVD005
|
9490500
|
395008
|
787
|
85.60
|
101.50
|
-45.00
|
5.35
|
1.25
|
12.80
|
1200
|
90KVD009
|
9490834
|
395227
|
758
|
93.85
|
101.50
|
-45.00
|
44.65
|
3.75
|
11.21
|
639
|
10KVD016
|
9490464
|
394971
|
798
|
51.00
|
101.50
|
-50.00
|
35.44
|
8.06
|
6.49
|
194
|
10KVD017
|
9490464
|
394970
|
798
|
50.00
|
101.50
|
-65.00
|
29.08
|
1.12
|
33.70
|
120
|
11KVD019
|
9490496
|
395039
|
807
|
45.10
|
101.50
|
-60.00
|
11.10
|
5.25
|
9.45
|
167
|
11KVD020
|
9490537
|
395045
|
805
|
50.90
|
101.50
|
-50.00
|
32.45
|
11.05
|
3.18
|
377
|
11KVD025
|
9490809
|
395241
|
752
|
45.20
|
101.50
|
-50.00
|
14.75
|
8.15
|
18.77
|
2801
|
11KVD026
|
9490810
|
395272
|
776
|
51.70
|
281.50
|
-60.00
|
33.80
|
5.10
|
14.70
|
101
|
11KVD027
|
9490870
|
395252
|
767
|
56.10
|
101.50
|
-50.00
|
30.70
|
1.90
|
10.35
|
46
|
Apart from the drilling conducted at the former Wild Dog gold
mine there remain several drill intercepts that require further
exploration outside of the mine environment as tabulated below,
apart from the various trenching and channel sampling targets.
Table 2 – Wild Dog Prospect Area Significant Drill
Intercepts
Hole ID
|
N
|
E
|
RL
|
Depth
|
Azim
|
Dip
|
From
|
Length
|
Au g/t
|
Cu ppm
|
86WDD020
|
9489141
|
394278
|
983
|
259.35
|
103.50
|
-60.00
|
129.35
|
7.70
|
5.28
|
902
|
87WDD024
|
9489117
|
394316
|
965
|
152.55
|
98.50
|
-60.00
|
138.25
|
5.10
|
8.32
|
8556
|
87WDD027
|
9489115
|
394325
|
965
|
200.40
|
98.50
|
-60.00
|
117.95
|
6.20
|
19.13
|
786
|
87WDD040A
|
9489219
|
394320
|
994
|
280.99
|
103.50
|
-60.00
|
148.60
|
4.20
|
12.50
|
4066
|
87WDD045
|
9489235
|
394287
|
988
|
300.20
|
103.50
|
-60.00
|
201.30
|
2.85
|
16.94
|
32123
|
87WDD051
|
9489249
|
394257
|
985
|
309.10
|
103.50
|
-60.00
|
253.95
|
6.05
|
7.29
|
2054
|
87WDD058
|
9489285
|
394359
|
977
|
285.90
|
101.50
|
-60.00
|
147.00
|
12.45
|
4.96
|
6694
|
87WDD064
|
9489179
|
394289
|
1001
|
290.60
|
101.50
|
-60.00
|
158.00
|
14.95
|
2.73
|
650
|
87WDD065
|
9489160
|
394330
|
996
|
250.10
|
101.50
|
-60.00
|
142.70
|
4.65
|
5.49
|
3246
|
87WDD069
|
9489139
|
394375
|
991
|
123.50
|
101.50
|
-60.00
|
88.55
|
7.75
|
7.12
|
7151
|
08WDD111
|
9489393
|
394513
|
906
|
100.00
|
281.50
|
-60.00
|
48.40
|
7.10
|
5.47
|
931
|
85WDD014
|
9488708
|
394260
|
954
|
86.20
|
113.50
|
-51.00
|
48.25
|
5.25
|
9.79
|
10863
|
86WDP010
|
9488839
|
394302
|
909
|
60.00
|
83.50
|
-60.00
|
34.00
|
6.00
|
6.71
|
5047
|
87WDD040A
|
9489219
|
394320
|
994
|
280.99
|
103.50
|
-60.00
|
164.55
|
13.50
|
8.56
|
3056
|
90WDD086
|
9488948
|
394337
|
890
|
79.00
|
78.50
|
-50.00
|
18.45
|
11.25
|
16.22
|
3473
|
97WD098
|
9489389
|
394487
|
905
|
39.00
|
98.50
|
-45.00
|
12.00
|
8.00
|
9.73
|
NA*
|
NA* - not assayed or
not available.
|
Table 3 – Mengmut Prospect Significant Drilling
Intercepts
Hole ID
|
North
|
East
|
RL
|
Depth
|
Azim
|
Dip
|
From
|
Length
|
Au g/t
|
Cu ppm
|
MRC01
|
9487963
|
393871
|
968
|
20.00
|
0.00
|
-90.00
|
2.00
|
18.00
|
3.05
|
3084
|
MRC02
|
9487978
|
393874
|
971
|
30.00
|
0.00
|
-90.00
|
0.00
|
18.00
|
3.07
|
1053
|
90WDD087
|
9488091
|
394082
|
1021
|
61.95
|
101.50
|
-50.00
|
7.30
|
1.35
|
5.02
|
1650
|
90WDD088
|
9488104
|
394070
|
1023
|
40.30
|
101.50
|
-50.00
|
21.30
|
1.55
|
3.95
|
25
|
MMD003
|
9486870
|
393532
|
924
|
104.00
|
133.00
|
-50.00
|
|
2.35
|
4.42
|
NA*
|
MMD006
|
9486770
|
393479
|
945
|
122.05
|
133.00
|
-50.00
|
|
2.55
|
4.16
|
NA*
|
Additionally, multiple samples collected from a historic
stockpile near the Wild Dog Zone returned bonanza grades of gold
and copper including Sample 30104 which assayed 242 g/t Au, 601 g/t
Ag, 9.52% Cu and Sample 68001 which assayed 122.5 g/t Au, 350 g/t
Ag and 11% Cu.
Figure 3. NE-trending Wild Dog - Gunsap structural corridor
strongly coincident with equidistant intrusives and caldera
features.
Figure 4. Historic exploration data at Wild Dog
Project.
The exploration program at the Wild Dog Project will initially
focus on drilling the copper-gold Magiabe porphyry target as
well as testing the potential existence of an arrowhead intrusion
complex at depth beneath the Wild Dog zone (Figure 4).
Figure 5. Schematic section for Wild Dog Zone, illustrating
location of potential "Arrowhead Intrusive Complex".
WDR has entered into the following agreements to acquire its
interest in ELA 2516:
(A)
|
Option agreement
dated December 19, 2019, as amended on December 19, 2019 (the
"Munga River Option Agreement"), between WDR and Munga River
Ltd.("Munga River").
|
|
|
|
|
|
Pursuant to the
Munga River Option Agreement, WDR may acquire up to a 100% interest
in ELA 2516 as follows:
|
|
|
|
|
|
|
(i)
|
an initial 80% interest
in ELA 2516 (the "First Munga River Option"), once ELA 2516 is
converted into an EL and renewed after its first two (2) year term;
and
|
|
|
|
|
|
|
(ii)
|
up to an additional 20%
interest (for an aggregate 100% interest) in ELA 2516 (the "Second
Munga River Option"), by the later of (a) 6 years following the
listing of WDR or its nominee (the "Listing") and (b) 18 months
following the initial grant of EL 2516.
|
|
|
|
|
|
|
In order to maintain
and exercise the First Munga River Option, WDR is required to
pay and issue to Munga River:
|
|
|
|
|
|
|
(i)
|
C$10,000 in cash within
15 business days following the execution of the Munga River Option
Agreement (which amount has been paid);
|
|
|
(ii)
|
C$2,500 in cash per
month commencing the first month following the execution of the
Munga River Option Agreement until the 72-month anniversary of the
later of (a) the Listing and (b) the 18-month anniversary of the
grant of ELA 2516;
|
|
|
(iii)
|
C$3,500 in cash per
month commencing on the date of grant of ELA 2516 until the listing
of WDR (which payments will cease on Closing);
|
|
|
(iv)
|
C$25,000 in cash within
20 business days following the grant of ELA 2516;
|
|
|
(v)
|
C$275,000 in cash
within 10 business days following the Listing;
|
|
|
(vi)
|
C$550,000 in shares
within 10 business days following the Listing at a price equal to
the lesser of (a) the price of the last financing of WDR or its
nominee prior to the Listing and (b) the Listing price;
|
|
|
(vii)
|
C$250,000 in cash
within 20 business days following the later of (a) the 36-month
anniversary of the Listing and (b) the renewal of ELA 2516
(C$20,000 of which has been paid); and
|
|
|
(viii)
|
C$250,000 in shares
within 30 business days following the later of (a) the 36-month
anniversary of the Listing and (b) the renewal of ELA
2516.
|
|
|
|
|
|
|
In order to maintain
and exercise the Second Munga River Option, WDR is required to
pay and issue to Munga River:
|
|
|
|
|
|
|
(i)
|
C$700,000 in cash
within 30 business days following the 48-month anniversary of the
Listing;
|
|
|
(ii)
|
C$300,000 in shares
within 30 business days following the 48-month anniversary of the
Listing;
|
|
|
(iii)
|
C$1,400,000 in cash
within 40 business days following the 72-month anniversary of the
Listing; and
|
|
|
(iv)
|
C$600,000 in shares
within 30 business days following the 72-month anniversary of the
Listing.
|
|
|
|
|
|
|
Unless otherwise
described, the shares described above will be issued at the volume
weighted average price ("VWAP") for the 20 trading days immediately
prior to the date of each such share issuance.
|
|
|
|
|
|
Upon WDR's exercise of
the First Munga River Option, WDR will grant to Munga River (or pro
rata to the shareholders of Munga River) a 2% net smelter return
royalty in respect of ELA 2516 (the "Munga River Royalty"). WDR
will have the right to acquire one-half (1/2) of the Munga River
Royalty, being a 1% net smelter return, at any time prior to the
commencement of commercial production with the payment and issuance
by WDR of:
|
|
|
|
|
|
(i)
|
C$625,000 in cash to
Munga River; and
|
|
(ii)
|
C$625,000 in shares to
Munga River or its nominee at a price per share equal to the 30-day
VWAP immediately prior to the date of commercial
production,
|
|
|
|
|
within 30 business days
following the commencement of commercial production.
|
|
|
|
Pursuant to or in
connection with the Munga River Option Agreement, WDR will
also pay and issue C$150,000 in shares to Koiti Mel following the
Listing at a price equal to the lesser of (a) the price of the most
recent financing of WDR or its nominee prior to the Listing and (b)
the Listing price.
|
|
|
(B)
|
Agreement dated
December 19, 2019 (the "Aphrodite Agreement") among WDR, EEPL and
the trustee of the Aphrodite Trust ("Aphrodite").
|
|
|
|
|
|
WDR entered into the
Aphrodite Agreement whereby Aphrodite agreed to withdraw all legal
claims relating to its 10% interest in the Historic
Tenements.
|
|
|
|
|
|
|
Pursuant to the
Aphrodite Agreement, WDR is required to pay to
Aphrodite:
|
|
|
|
|
|
|
(i)
|
C$5,000 in cash within
15 business days following the execution of the Aphrodite Agreement
(which amount has been paid);
|
|
|
(ii)
|
C$10,000 in cash within
30 business days following the grant of ELA 2516;
|
|
|
(iii)
|
C$112,500 in cash
within 10 business days following the Listing;
|
|
|
(iv)
|
C$122,500 in cash
within 10 business days following the 12-month anniversary of the
Listing; and
|
|
|
(v)
|
C$10,000 in cash within
30 business days following the grant of the EL pursuant to ELA
2516.
|
|
|
|
|
(C)
|
Agreement dated May
30, 2022 (the "NGGL Agreement") between WDR and NGGL (in
liquidation).
|
|
|
|
|
|
|
WDR entered into the
NGGL Agreement whereby NGGL agreed to withdraw all legal claims
relating to the Historic Tenements.
|
|
|
|
|
|
|
Pursuant to the NGGL
Agreement, WDR is required to pay and issue:
|
|
|
|
|
|
|
(i)
|
C$50,000 in cash to
NGGL's liquidator (the "NGGL Liquidator") (which amount has been
paid);
|
|
|
(ii)
|
C$75,000 in cash to the
NGGL Liquidator within 10 business days following the notification
of the lifting of a certain court injunction (which amount has been
paid);
|
|
|
(iii)
|
C$325,000 in cash to
the NGGL Liquidator within 20 business days following the grant of
the EL pursuant to ELA 2516;
|
|
|
(iv)
|
an aggregate of
C$400,000 in shares to the NGGL Liquidator (or such other parties
as the NGGL Liquidator may designate) on the Listing date at the
Listing price; and
|
|
|
(v)
|
K10,000 in cash to
Warner Shand, in respect of legal costs, within 10 business days
following the notification of the lifting of a certain court
injunction or upon WDR receiving notification that the NGGL
Liquidator has lodged the formal notice of termination of all legal
claims by NGGL and has consented to the lifting of such injunction
(which amount has been paid).
|
|
The Arau
Project
The Arau Project consists of one EL (EL 2651) and one ELA (ELA
2715), located in the Kainantu region, Eastern Highlands Province, PNG, which are
immediately east of and adjoining the Kainantu gold mine owned by
K92 Mining Inc.
Initial exploration work by previous operators has identified
two potential deposit types at the Arau Project:
- epithermal-high sulphidation gold (Sabudia Hill, Onga Hill and
Erandora prospects) and
- copper-gold porphyry prospects (Mt. Victor, Mt. Aiyonka, Ebitara and P1
prospects).
Within the licence area, the Mt. Victor Prospect (copper-gold
porphyry target) covers an area of 800m by 400m, and
previous drilling suggests that the prospect area is a multiple
phase intrusive complex that is copper and gold mineralized. It is
a drill ready prospect in which previous channel sampling has
identified the following strong gold grades:
- 38m @ 2.64 g/t Au
- 12m @ 5.5 g/t Au
- 18m @ 2.4 g/t Au
- 10m @ 3.7 g/t Au.
These channel samples are in the central part of the Mt Victor
prospect southwest of the former Mt Victor gold mine. Previous
drilling was carried out in the 1980s, and all drillholes presented
were vertical, which may not have been appropriate for the
subvertical fault zones present within the prospect.
Table 4 – Mt Victor Prospect Significant Drill
Intercepts
Hole ID
|
E*
|
N*
|
Dept
h
|
From
(m)
|
Length
(m)
|
Au
g/t
|
Cu
ppm
|
Notes
|
CRD58
|
385177
|
9291680
|
64.5
|
0
|
64.5
|
0.18
|
106
|
granodiorite intruded
by diorite
|
DDH89
-1
|
384650
|
9291308
|
260
|
234
|
5
|
0.85
|
NA
|
visible disseminated
copper
mineralization
|
DDH89
-2
|
384965
|
9291825
|
300
|
43
|
10
|
1.10
|
NA
|
under review
|
DDH89
-3
|
384873
|
9291562
|
300
|
213
|
10
|
1.20
|
NA
|
under review
|
MVD07
|
384746
|
9291253
|
52.8
|
0
|
52.8
|
0.10
|
384
|
altered pyritic
diorite
|
MVD08
|
384831
|
9291327
|
30
|
16
|
14
|
0.19
|
373
|
argillic altered
QFP
|
MVD09
|
384853
|
9291333
|
36
|
34
|
2
|
0.29
|
NA
|
epidote altered
intrusive
|
MVD20
|
384900
|
9291345
|
75
|
0
|
75
|
0.34
|
304
|
argillic altered
brecciated porphyry
|
MVD21
|
384890
|
9291353
|
48
|
0
|
48
|
0.41
|
329
|
diorite/QFP brecciated
contact
|
MVD36
|
385032
|
9291456
|
24
|
22
|
2
|
14.70
|
463
|
altered pyritic
porphyry
|
MVD40
|
384994
|
9291435
|
38
|
0
|
38
|
3.10
|
1400
|
silica epidote altered
porphyry
|
MVD46
|
384932
|
9291388
|
34.5
|
15
|
19.5
|
0.33
|
117
|
epidote pyrite altered
porphyry
|
MVD50
|
385068
|
9291469
|
29
|
16
|
13
|
0.13
|
722
|
clay altered
granodiorite
|
MVD52
|
384962
|
9291475
|
30
|
14
|
16
|
1.01
|
77
|
sericite epidote
altered porphyry
|
MVD62
|
384704
|
9291152
|
75
|
40
|
35
|
0.12
|
287
|
kspar epidote altered
porphyry
|
MVD63
|
384596
|
9291160
|
48
|
0
|
48
|
0.75
|
373
|
diorite intruded by
pyritic porphyry
|
Initial drilling at the Arau Project will involve five angled
diamond drill holes to follow up on a successful electromagnetic
survey and previous excellent geochemical sampling results.
Figure 6. Mt Victor Prospect Map with proposed drill
sites
WDR entered into a Share Purchase and Financing Agreement dated
January 10, 2021 (the "Share Purchase
and Financing Agreement") with Taha Sanduhu ("Sanduhu") and Ontaga
Resources Ltd. ("Ontaga"), pursuant to which WDR may acquire up to
an aggregate 85% interest in Ontaga, a PNG Company, which holds EL
2651 and ELA 2715.
Pursuant to the Share
Purchase and Financing Agreement, WDR may acquire up to an 85%
interest in Ontaga as follows:
|
|
(i)
|
an initial 25% interest
in Ontaga (the "First Ontaga Option"), by paying to Sanduhu
C$150,000 in cash and paying K217,000 in cash for certain
historical expenses and ongoing administrative expenses of Ontaga
(which amounts have been paid); and
|
(ii)
|
an additional 60%
interest in Ontaga (for an aggregate 85% interest in Ontaga) (the
"Second Ontaga Option"), by paying to Sanduhu C$390,000 in cash on
or before the later of the renewal dates for EL 2651 and ELA
2715.
|
|
Upon WDR acquiring
the First Ontaga Option, WDR will pay the following:
|
|
(i)
|
K28,000 in cash for
annual accounting and administrative expenses (which amount has
been paid);
|
(ii)
|
K1,500 in cash per week
for other expenses over a period of 24 months (which amounts have
been paid);
|
(iii)
|
K50,000 in cash towards
the completion of a medical clinic located near the village of Arau
and the employment of the services of a nurse during the 12 months
following the completion of the First Ontaga Option (which amount
has been paid);
|
(iv)
|
K50,000 in cash for
employment services for the 24 months following the completion of
the First Ontaga Option;
|
(v)
|
C$30,000 in cash to
Sanduhu within 30 business days following the completion of the
First Ontaga Option (which amount has been paid); and
|
(vi)
|
C$3,000 in cash to
Sanduhu per month until completion of the Second Ontaga
Option.
|
Upon WDR acquiring an 85% interest in
Ontaga, WDR will be solely responsible for funding exploration
activities and other expenditures at the Arau Project. However,
Ontaga will be required to pay to WDR 80% of earnings or dividends
that Sanduhu would be entitled to receive until such time as the
amounts so received equal the aggregate amount of expenditures
incurred by WDR that would have been payable by Sanduhu.
The Arau Project is subject to a 2% net smelter return
royalty (the "Arau Royalty") in favour of TPS Consulting Pty Ltd
("TPS"). Ontaga may purchase from TPS one-half (1/2) of the Arau
Royalty, being a 1% net smelter return, at any time, for
C$1,000,000 in cash.
The Kesar Creek
Project
The Kesar Creek Project consists of one ELA, ELA 2711, and is
located 10 km from the Kora gold deposit owned by K92 Mining
Inc.
Exploration at Kesar Creek has identified the presence of
semi-massive copper sulphides associated in quartz veins
paralleling the Kora gold deposit as well as the potential for a
copper-gold porphyry deposit. Although limited exploration has been
carried out at Kesar Creek, initial rock sampling programs returned
high-grade gold-copper-silver values including:
- Rock sample no 14128 at 11.5 g/t Au
- Rock sample no A1428 at 11.9 g/t Au
- Rock sample no 9231F at 10.6 g/t Au
- Rock sample no 14236 at 11.6 g/t Au, 29 g/t Ag, 0.036% Cu and
20 ppm Mo
- Rock sample no. A14023 at 30.4 g/t Au, 240 g/t Ag, 0.13% Cu,
and 24 ppm Mo
Figure 7. Historic exploration data at Kesar Creek project
showing trench, soil and rock assay results with key geological
features previously mapped by Highlands Gold Ltd. and Barrick PNG
Ltd.
WDR entered into a project and investment agreement dated
April 5, 2023 (the "Project and
Investment Agreement") with Andy
Thomas ("Thomas") and Yaendal Minerals Limited ("Yaendal"),
pursuant to which WDR has agreed to acquire a 90% interest in
Yaendal, a PNG company, which holds ELA 2711.
In order to earn a 90%
interest in Yaendal, WDR is required to pay:
|
|
(i)
|
C$5,000 in cash to
Thomas' consulting company on or before the execution of the
Project and Investment Agreement (which amount has been
paid);
|
(ii)
|
C$20,000 in cash to
Thomas' consulting company on the business day following the
execution of the Project and Investment Agreement (which amount has
been paid);
|
(i)
|
C$100,000 in cash to
Yaendal's trust account on or before May 1, 2023 (which amount will
be paid by WDR prior to Closing);
|
(ii)
|
C$100,000 in cash to
Thomas' consulting company on Closing;
|
(iii)
|
C$100,000 in cash to
Thomas' consulting company on or before the 12-month anniversary of
Closing; and
|
(iv)
|
C$100,000 in cash to
Thomas' consulting company on or before the 24-month anniversary of
Closing.
|
|
WDR will be solely
responsible for funding exploration activities and other
expenditures at the Kesar Creek Project. However, Yaendal will be
required to pay to WDR 100% of the earnings or dividends that
Thomas would be entitled to receive until such time as the amounts
so received equal the aggregate amount of expenditures incurred by
WDR that would have been payable by Thomas.
|
|
The Kesar Creek Project
is subject to a 2% net smelter return royalty in favour of Thomas
(the "Kesar Creek Royalty"). Yaendal may purchase from Thomas
one-half (1/2) of the Kesar Creek Royalty, being a 1% net smelter
return, at any time, for C$1,500,000 in cash.
|
|
Pursuant to the Project
and Investment Agreement, WDR will also issue and pay:
|
|
|
(i)
|
4,500,000 WDR shares
(or 640,295 FSX Shares) to Thomas or his nominee on the later of
(a) May 31, 2023 and (b) within 20 business days following the
grant of the EL pursuant to ELA 2711; and
|
(ii)
|
C$5,000 in cash per
month to Thomas' consulting company for a period of six (6) years
following the execution of the Project and Investment Agreement
(which payments have been made to date).
|
About FSX
Fosterville South began with two, 100% owned, high-grade gold
projects called the Lauriston and Golden Mountain Projects, and has
since acquired a large area of granted and application tenements
containing further epizonal (low-temperature) high-grade gold
mineralisation called the Providence Project and a large group of
recently consolidated license tenement applications called the
Walhalla Belt Project, which contains a variety of epizonal and
intrusion related style gold mineralisation, all in the state
of Victoria, Australia. The Fosterville South land
package, assembled over a multi-year period, notably includes a 600
sq. km property immediately to the south of and within the same
geological framework that hosts Agnico Eagle's
Fosterville epizonal gold tenements. Additionally, Fosterville
South has gold-focused projects called the Moormbool and
Tallangallook, which are also located in the state
of Victoria, Australia. Moormbool project has epizonal
style gold mineralisation, and Tallangallook has mesozonal and
intrusion relation gold mineralisation.
All of FSX's properties, with the possible exception of
Moormbool, have had historical gold production from hard rock
sources despite limited modern exploration and drilling.
Recently, Fosterville South entered into an agreement with WDR
to acquire a significant 2,166 sq. km mineral exploration land
package in PNG (as described in the FSX News Release dated
April 19, 2023).
The land package included in the acquisition comprises an EL and
multiple ELAs. It includes both early-stage and advanced-stage
exploration targets with high-grade epithermal vein and
porphyry-style mineralisation present.
The Arau Project consists of one EL, EL 2651, and one ELA, ELA
2715, located in the Kainantu region, and includes the Mt. Victor
Prospect, where previous drilling found multiple phase intrusive
complexes of copper and gold mineralisation.
The Wild Dog Project consists of two ELAs, ELA 2516 and ELA
2761, located on the island of New Britain and about 50 km
southwest of Rabaul and Kokopo, PNG.
The Kesar Creek Project consists of one ELA (ELA 2711), and is
located 10 km west of the Kainantu Gold Mine owned and operated by
K92 Mining Inc.
WDR has done significant work on various projects in the past
two years, generating multiple high priority drill targets.
Qualified Person
The technical content of this news release has been reviewed,
verified and approved by WDR director, Chris Muller, PGeo, a Qualified Person under the
meaning of National Instrument 43-101 – Standards of Disclosure for
Mineral Projects. Mr. Muller is responsible for the technical
content of this news release and has spent time onsite reviewing
sampling results as well as discussing work programs and results
with geology personnel and external consultants.
On behalf of FSX
Rex Motton
Chief Operating Officer and Director
Forward-Looking
Statements
Information set forth in this news release contains
forward-looking statements that are based on assumptions as of the
date of this news release. These statements reflect management's
current estimates, beliefs, intentions and expectations. They are
not guarantees of future performance. Fosterville South
cautions that all forward looking statements are inherently
uncertain and that actual performance may be affected by many
material factors, many of which are beyond their respective
control. Such factors include, among other things: risks and
uncertainties relating to Fosterville South's limited operating
history, its exploration and development activities on the
Lauriston, Golden Mountain,
Providence and Beechworth
Properties and the need to comply with environmental and
governmental regulations. Accordingly, actual and future events,
conditions and results may differ materially from the estimates,
beliefs, intentions and expectations expressed or implied in the
forward looking information. Except as required under applicable
securities legislation, Fosterville South does not undertake to
publicly update or revise forward-looking information.
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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SOURCE Fosterville South Exploration Ltd.