Energy Fuels Inc. press release
FSX Enters into Definitive Agreement for Acquisition of WDR
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Canada NewsWire
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.
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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.
| 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.
| 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. |
| 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.
| 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 |