2016-08-05 09:39 ET - News Release
Mr. Brian Fowler reports
BCGOLD CORP. CLOSES PERUVIAN TRANSACTION AND 2ND TRANCHE OF PRIVATE PLACEMENT
BCGold Corp. has received TSX Venture Exchange approval and has closed its Peru transaction, previously announced on April 14 and subsequently amended on April 20, 2016. Furthermore, the company is pleased to announce that it has closed a second tranche of its $750,000 private placement, an underlying condition for the Peru transaction, that was increased to $1-million on July 19, 2016.
The Peru transaction constitutes a fundamental acquisition under the policies of the TSX-V, and, as such, the company's stock was halted immediately after announcement until the company provided certain filings with the TSX-V. BCGold is pleased to announce that these filings have been provided and approved by the exchange, and that BCGold's securities will recommence trading at market open on Aug. 5, 2016.
Second tranche of private placement closed
In addition to a first tranche of $286,000 closed on April 28, 2016, the company has raised $465,000 in a second tranche, for a total of $751,000, through the issuance of 9.3 million units priced at five cents per unit. Each unit consists of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share at a price of 10 cents per share for up to two years expiring on Aug. 3, 2018. The company paid finders' fees of $30,000 and issued 600,000 finder warrants, each of which entitle the holder to purchase one BCGold common share at a price of five cents per share for up to one year expiring on Aug. 3, 2017. The company expects to fill and close the remainder of the $1-million private placement in the very near term.
All securities are subject to a four-month hold period expiring on Dec. 4, 2016. As the company has previously advised, of the gross proceeds of the private placement, approximately $200,000 will be used to pay the costs associated with the closing of the Peru transaction, and the remainder will be applied to advance the Chanape and Pucacorral properties.
The Peru transaction
The $750,000 private placement was a closing condition for the Peru transaction, whereby BCGold has acquired 100-per-cent interest in the Peru properties by acquiring the shares of Circum Pacific Holdings Ltd., a closely held British Columbia company, which is the majority owner of the shares of Minera Chanape SAC and Cima de Oro SAC, the holders of the Peru properties, and directly acquiring the balance of the shares of Chanape and Cima not owned by Circum-Pacific. The overall consideration paid in connection with the Peru transaction, as detailed in the previous news releases dated April 14 and April 20, 2016, totals 30 million shares of BCGold and a cash payment of $60,000, with approximately two-thirds of such consideration being paid to the shareholders of Circum-Pacific. Furthermore, Cima has an agreement to purchase all of the issued and outstanding shares of SMRL Cerro de Oro Tres, which company in turn holds nine additional mineral concessions included in this transaction.
The total land package to be acquired by BCGold through this transaction consists of 5,785 hectares of contiguous mineral concessions. Of these 30 million transaction shares, a total of 6,672,000 shares will be held in escrow and released coincidental with the Tres payments, or otherwise upon the occurrence of certain agreed upon events. BCGold may, in its sole discretion, elect to cease making payments under the Tres agreement, in which case any of the Tres agreement shares then remaining unissued will be returned to treasury. The 23,328,000 transaction shares not held in escrow are subject to a pooling agreement whereby the shares will be held and released to the vendors as to 10 per cent of such shares on closing and a further 15 per cent of such shares every six months. At closing, no one person holds 20 per cent or more of the issued and outstanding shares of BCGold such that their holdings would constitute a change of control as defined in the policies of the TSX Venture Exchange.
The company conducted due diligence studies and a site visit to the Chanape and Pucacorral properties in early May, 2016. Jerry Blackwell, PGeo, a qualified person as defined by National Instrument 43-101 and on behalf of BCGold, has prepared a technical report detailing the exploration history, geological potential and BCGold's exploration plans for the Peru properties. This report has been approved by the exchange, and will be posted on SEDAR and the company's website.
The Peru properties -- Chanape and Pucacorral highlights:
BCGold has acquired 100-per-cent interest in the Chanape and Pucacorral properties, comprising a number of contiguous mineral concessions (5,785 hectares) within the historic Chanape and San Mateo exploration and mining district, 100 kilometres east of Lima, Peru.
The properties overlay gold-silver epithermal systems associated with mineralized hydrothermal veins and breccias that are postulated to be related to concealed porphyry copper centres in a prolific mining district that has been actively mined for silver, gold and copper since colonial times.
The properties include the Veta Fulvia and the San Mateo silver-copper-gold mines, and completely surround the recent high-grade Chanape porphyry/breccia-hosted Cu-Au-Ag discovery formerly owned by Inca Minerals Ltd., which has been demonstrated to extend onto BCGold's Chanape property. Inca has spent approximately $7-million (Australian) in exploration on the Chanape discovery during the past four years.
Past Chanape drilling by Inca returned high-grade intercepts in near-surface epithermal breccias that include 55 metres averaging 2.3 per cent Cu, 0.6 gram per tonne Au and 42.9 grams per tonne, Ag and 108 metres averaging two grams per tonne Au and 41 grams per tonne Ag from surface, including 42 metres averaging 3.3 grams per tonne Au and 34.9 grams per tonne Ag. Sufficient information has not been received to report true widths.
Historic and artisanal mines acquired by BCGold will be evaluated for third party mining and processing at nearby facilities, such as Nyrstar's Coricancha mine and milling complex, currently being evaluated by Great Panther Silver Ltd., 15 kilometres away.
The properties are proximal to the giant Toromocho copper-molybdenum-silver deposit, 30 kilometres to the north.
Inca spent greater than $7-million (Australian) and drilled over 11,500 metres at Chanape over the past five years. Inca dropped the Chanape option in April, 2016, citing an inability to negotiate more favourable option terms with the vendor (a 2016 expenditure commitment of $5.33-million (Australian) was due at year-end). BCGold has excellent relations and continuing discussions with the Chanape property vendor to co-operatively advance its Chanape projects.
BCGold intends to advance the Chanape and Pucacorral properties to the point where they may be optioned by a major mining company. The company is now financed to commence a 2016 exploration program to achieve this. Exploration work will include geological mapping, sampling and an induced polarization geophysical survey to further define bulk-tonnage breccia gold-copper-silver drill targets. The company will also be actively seeking and evaluating additional copper-gold-silver exploration opportunities in Peru.
New board of directors and Peruvian management group
At closing, the board of directors of BCGold now consists of Brian P. Fowler, John Kowalchuk and two nominees of Circum, with it being acknowledged that Peter Kendrick and Dr. Z. Adam Szybinski, PhD, will be nominated for election as directors of BCGold at its next annual general meeting.
BCGold wishes to welcome Dr. Jenny Egusquiza and Gary W. Anderson to the board of directors. Dr. Egusquiza is a Lima-based Peruvian lawyer who serves as a director and adviser to several Canadian, English and Peruvian mining companies. Dr. Egusquiza advises and consults to Peruvian and international companies and government institutions, specializing in laws governing development of mining, energy and exploitation of natural resources. Dr. Egusquiza has more than 23 years of experience working for multinational companies that include Glencore Group, Phelps Dodge, BHP Billiton, Perubar SA (San Ignacio de Morococha), Compania Minera Poderosa SA, Peruana de Energia SAA and EDEGEL SAA, among others. Dr. Egusquiza serves as a member of the Lima Bar Association and Peruvian National Law Federation. Dr. Egusquiza graduated as a lawyer from the law and politic science faculty of the Pontificia Universidad Catolica del Peru, and continued her postgraduate study in private international law at the University of South California, United States, and in business law (doctorate) at the University of Seville, Spain.
Mr. Anderson and Dr. Szybinski are former senior executives of High Ridge Resources Inc., which undertook the initial exploration of the Chanape area between 2007 and 2009. Mr Anderson, as president and chief executive officer of High Ridge, and Dr. Szybinski, as vice-president of exploration, were instrumental in recognizing the potential of the area and implemented the first drill program in the district, discovering widespread epithermal gold-base metal mineralization at the Chanape property. These exploration results supported the premise that epithermal gold mineralization at Chanape is related to a larger underlying porphyry system, which was proven by subsequent and deep drilling by Inca Minerals Ltd. within its tenements in 2015. Inca spent greater than $7-million (Australian) and drilled over 11,500 metres at Chanape over the past five years, defining epithermal breccia and porphyry-style mineralization over a plus-1.3-kilometre vertical extent, that remains open at depth.
BCGold is very pleased that Mr. Anderson and Dr. Szybinski will be assuming the roles of general manager of Peru and exploration manager of Peru, respectively, comprising BCGold's senior Peru management team. Their combined knowledge of the geology and mineral endowment of Peru, local systems, laws and procedures, and established industry contacts, in particular, their long-standing relationships with the local communities, provides the company with an invaluable experience base to ensure BCGold's exploration and operational success in Peru.
Blind Creek property amendment
BCGold is also pleased to announce that the company and Blind Creek Resources Ltd. have signed a third amendment to the Blind Creek letter agreement, under which BCGold may earn up to a 100-per-cent interest in the Blind Creek property (see Aug. 19, 2013, Aug. 12, 2014, and Feb. 25, 2015, news releases), situated adjacent to BCGold's 100-per-cent-owned historic Engineer mine property, located 32 kilometres southwest of Atlin, B.C. The amendment, subject to TSX Venture Exchange approval, includes the following:
Each of BCGold's annual option commitments over four years, totalling $400,000 in eligible exploration expenses, issuance of one million BCGold common shares and cash payments of $225,000 to Blind Creek are extended by one year.
In consideration of the above, BCGold will issue 100,000 common shares to Blind Creek 15 days after receipt of exchange approval of the amendment.
BCGold acquires Voigtberg area claims
BCGold is also pleased to announce that it has signed an agreement with prospector Bernie Kreft to acquire 100-per-cent interest in the VOIGH claims, situated proximal to BCGold's 100-per-cent-owned Voigtberg property in British Columbia's prolific Golden Triangle district in northwest British Columbia. The agreement, subject to TSX Venture Exchange approval, provides Mr. Kreft with a cash payment of $20,000 and 400,000 BCGold common shares in exchange for 100-per-cent interest in the VOIGH claims.
Qualified person
The technical information in this news release pertaining to the Peru transaction has been reviewed and approved by Jerry Blackwell, PGeo, a consultant to the company and a qualified person as defined by National Instrument 43-101. Mr. Blackwell, on behalf of BCGold, has prepared a technical report detailing the exploration history, geological potential and BCGold's exploration plans for the Peru properties. This report has been approved by the exchange, and will be posted on SEDAR and on the company's website.
We seek Safe Harbor.
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BCGold acquires Peruvian properties, raises $465,000
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