VANCOUVER, BC, Sept. 14,
2023 /CNW/ - Kainantu Resources Ltd. ("KRL" or the
"Company") (TSXV: KRL) (FSE: 6J0) is pleased to announce that it
has closed the definitive agreement with Harmony Gold (PNG) Exploration Limited ("HGEL"),
a wholly-owned subsidiary of Harmony Gold Mining Company Limited
("Harmony") to acquire 100% ownership of the Kili Teke Gold-Copper
Project ("Kili Teke" or the "Project") in Papua New Guinea ("PNG") (the "Acquisition" or
"Transaction").
Kili Teke is an advanced porphyry
gold-copper development project with an existing NI43-101 compliant
mineral resource; and significant potential for re-optimization
focusing on higher grade Au skarn mineralisation close to surface
in addition to near site exploration potential to increase overall
value.
Key Highlights:
- KRL and HGEL have closed the definitive agreement for KRL to
acquire 100% of the Kili Teke Project from HGEL as of today
(September 14, 2023), including:
- HGEL has obtained the necessary approvals from the PNG Mineral
Resource Authority ("MRA") to transfer the Project to KRL;
- KRL has paid to HGEL the balance of closing consideration of
US$400,000 less adjustments (for a
total payment to acquire 100% of the Project being US$500,000, inclusive of the original payment
made); and
- KRL has issued to Harmony 11,257,252 warrants equal to 9.9% of
the issued capital of KRL on closing, enabling Harmony to become a
strategic investor in KRL at its election in the future (upon
Harmony exercising such warrants at a price of C$0.28 per warrant);
- closing the Acquisition is a key milestone event for KRL, with
the Company having control and ownership of 100% of all its
blue-chip portfolio of projects: Kili
Teke, May River, KRL North and KRL South (including the
highly prospective Ontenu prospect);
- KRL now holds a significant mineral resource as an inventory on
closing, with an Inferred Mineral Resource of 237Mt @ 0.34% Cu, 0.24g/t Au and 168ppm Mo for a
total of 802kt of Cu, 1.81Moz of Au and 40Kt Mo, using a 0.2% Cu
cut-off (see the NI43-101 Technical Report for the Project released
by KRL on January 12, 2023);
- Kili Teke is a blue-chip
development Project in PNG with significant potential for KRL
(drawing on activities already completed by HGEL, including over
36,000 metres of drilling and circa US$25
million of historic expenditure) – see KRL's announcement of
April 6, 2022 for Project details and
the strategic rationale:
https://kainanturesources.com/projects/kili-teke-project/;
- Initial re-optimization work for the Project will accelerate on
closing, with the target to develop a "first phase" Preliminary
Economic Assessment ("PEA") over the remainder of 2023 and into H1
2024, likely to confirm the robust potential of the Project:
- the Project is likely capable of development as a small scale
yet higher grade Au-Cu open pit operation generating strong
economic returns;
- higher grade Au mineralisation can be delineated within the
upper reaches of the existing deposit; and
- the current mineral resource estimate does not include
identified skarn mineralisation expected to increase the Cu and Au
grades by 5% and 4% respectively; and the respective metal contents
by 11% and 10% (being of significant upside potential);
- community support for KRL's acquisition remains strong, with
the Company's external affairs team engaging well with local
stakeholders.
Matthew
Salthouse, CEO of KRL, commented:
"Taking control of 100% of Kili
Teke is a key milestone event for KRL and a pleasing outcome
for all stakeholders.
This transformational deal provides KRL with an exceptional
advance stage project, likely to demonstrate robust economic
returns initially as a higher-grade Au focused open pit mine.
Building on the significant body of work already undertaken by
Harmony, KRL's re-optimization studies will now accelerate around
this objective. Further updates will follow on this
initiative.
From a corporate perspective, KRL now has a sizeable mineral
resource in our inventory; and full control and ownership of all
portfolio projects: Kili Teke, May
River, KRL North and KRL South.
In addition to recognising the ongoing support of our
shareholders through challenging markets, KRL acknowledges the
collaborative efforts of Harmony and the mining authorities in PNG
to close this deal.
KRL remains committed to our core objective of developing a
portfolio of high quality projects of material intrinsic value,
with closing the Kili Teke deal
being a critical step along this path."
Further Details
Post-closing events are in hand in consultation with HGEL and
the MRA, including approval of a revised work programme focussing
on KRL's plans for re-optimization of the Project.
Key terms of the Acquisition are stated in further detail in the
announcement of April 6, 2022.
There remains is a requirement for a payment after closing of
US$500,000 (to be paid on or before
December 1, 2023 as a required part
of the tenement transfer process). In addition, further
future payments on completing Project milestone gates are required
on criteria set by KRL at its discretion.
The issuance of warrants to Harmony remains exercisable at
C$0.28 per share (based on a 25%
premium to the KRL 30-day VWAP share price when the Transaction was
executed on April 5, 2022). On
moving to commercial production, HGEL retains a royalty of 1.5%
NSR.
The Inferred Mineral Resource estimates stated above are based
on the NI43-101 Technical Report – Kili Teke Cu-Au Project,
Papua New Guinea authored by
Graeme J Fleming and dated November
18, 2022.
Qualified Person
The scientific and technical information disclosed in this
release has been reviewed and approved by Graeme Fleming, B. App. Sc., MAIG, an
independent "qualified person" as defined under National Instrument
43-101, Standards of Disclosure for Mineral
Projects.
About KRL
Kainantu Resources 'KRL' is an Asia-Pacific focused gold mining company with
four highly prospective gold-copper projects, KRL South, KRL North
and the May River Project. All projects are located in premier
mining regions in PNG. Both KRL North and KRL South show potential
to host high-grade epithermal and porphyry mineralisation, as seen
elsewhere in the high-grade Kainantu Gold District. The May River
project is near the world-renowned Frieda River Copper-Gold
Project, with historical drilling indicating the potential for
significant copper-gold projects. KRL has a highly experienced
board and management team with a proven track record of working
together in the region; and an established in-country
partner. Kili Teke is an
advanced development project with an existing NI43-101 compliant
inferred mineral resource.
For further information please
visit https://kainanturesources.com/
Neither the TSX-V nor its Regulation Services Provider (as
that term is defined in the policies of the TSX-V) accepts
responsibility for the adequacy or accuracy of this
release.
Disclaimer and Forward-Looking
Information Mineralization hosted on adjacent
and/or nearby properties is not necessarily indicative of
mineralization hosted on the Company's property. The data disclosed
in this release relating to drilling results is historical in
nature. Neither the Company nor a qualified person has yet verified
this data and therefore investors should not place undue reliance
on such data, and no representation or warranty, express or
implied, is made by the Company, its affiliated companies, or any
other person as to its fairness, accuracy, completeness, or
correctness. This release contains forward-looking statements,
which relate to future events or future performance and reflect
management's current expectations and assumptions. Such
forward-looking statements reflect management's current beliefs and
are based on assumptions made by and information currently
available to the Company. All statements, other than statements of
historical fact, are forward-looking statements or information.
Forward-looking statements or information in this news release
relate to, among other things: expectations regarding completion of
the Acquisition and the terms thereof, including timing, the
results of Preliminary Economic Assessments and Feasibility
Studies, further exploration activities or development programs on
the Project, receipt of necessary regulatory approvals and the
formulation of plans for drill testing; the effect of the
Acquisition on KRL and its portfolio; further growth of the
Project; timing of the renewal of EL 2310; the ability of the
Company to raise financing; the description and viability of the
Project; the preparation and filing of a NI 43-101 Technical
Report; and the ability of the Company to deliver on its strategic
objectives and create shareholder value. These
forward-looking statements and information reflect the Company's
current views with respect to future events and are necessarily
based upon a number of assumptions that, while considered
reasonable by the Company, are inherently subject to significant
operational, business, economic and regulatory uncertainties and
contingencies. These assumptions include; success of the Company's
projects; prices for gold remaining as estimated; currency exchange
rates remaining as estimated; availability of funds for the
Company's projects; capital, decommissioning and reclamation
estimates; prices for energy inputs, labour, materials, supplies
and services (including transportation); no labour-related
disruptions; no unplanned delays or interruptions in scheduled
construction and production; all necessary permits, licenses and
regulatory approvals are received in a timely manner; and the
ability to comply with environmental, health and safety laws. The
foregoing list of assumptions is not exhaustive. The Company
cautions the reader that forward-looking statements and information
involve known and unknown risks, uncertainties and other factors
that may cause actual results and developments to differ materially
from those expressed or implied by such forward-looking statements
or information contained in this news release and the Company has
made assumptions and estimates based on or related to many of these
factors. Such factors include, without limitation: fluctuations in
gold prices; fluctuations in prices for energy inputs, labour,
materials, supplies and services (including transportation);
fluctuations in currency markets (such as the Canadian dollar
versus the U.S. dollar); operational risks and hazards inherent
with the business of mineral exploration; inadequate insurance, or
inability to obtain insurance, to cover these risks and hazards;
our ability to obtain all necessary permits, licenses and
regulatory approvals in a timely manner; changes in laws,
regulations and government practices, including environmental,
export and import laws and regulations; legal restrictions relating
to mineral exploration; increased competition in the mining
industry for equipment and qualified personnel; the availability of
additional capital; title matters and the additional risks
identified in our filings with Canadian securities regulators on
SEDAR in Canada (available at
www.sedar.com). Although the Company has attempted to identify
important factors that could cause actual results to differ
materially, there may be other factors that cause results not to be
as anticipated, estimated, described, or intended. Investors are
cautioned against undue reliance on forward-looking statements or
information. These forward-looking statements are made as of the
date hereof and, except as required under applicable securities
legislation, the Company does not assume any obligation to update
or revise them to reflect new events or circumstances.
SOURCE Kainantu Resources Ltd.