THUNDER BAY, ON, Sept. 7, 2017 /CNW/ - Wolfden Resources
Corporation (WLF:TSX-V) ("Wolfden" or
the "Company") is pleased to announce that has entered
into a purchase and sale agreement dated September 6, 2017 (the "Purchase
Agreement") with an arm's length third party to acquire a 100%
interest in property located in Pickett Mountain, Penobscot County, northern Maine, U.S.A (the "Property") for a
cash purchase price of US$8.5 million
(the "Acquisition").
The Property is host to the Pickett Mountain Zn-Pb-Cu-Ag
deposit, considered by Wolfden management to be one of the
highest-grade undeveloped volcanogenic massive sulphide deposits
(VMS) in North America (the
"Pickett Mountain Project"). The deposit was discovered by
Getty Mines Ltd. in 1979, using a combination of soil surveys
ground surveys and diamond drilling and has not been explored since
1989.
The Company has also agreed to the terms of a proposed royalty
and equity based financing (the "Financing Proposal)
with a subsidiary of Altius Minerals Corporation ("Altius")
(ALS:TSX) to fund the Acquisition. The Financing Proposal
remains subject to Altius due diligence and customary approvals,
whereby Altius would subscribe and purchase from the Company on a
non-brokered private placement basis, 14,200,000 subscription
receipts of the Company (the "Subscription Receipts"), at a
price of C$0.25 per Subscription
Receipt, for aggregate gross proceeds of C$3,550,000 (the "Private Placement").
Wolfden will have the right to place additional participants in the
Private Placement, on identical terms, for up to C$1,250,000. Altius will also acquire a 1.35%
gross sales royalty on the Pickett Mountain Project for cash
consideration of US$6,000,000 and
have an option to purchase an additional 0.50% gross sales royalty
at any time before the first anniversary of commercial production
for US$7,500,000.
The Pickett Mountain Project and New Mining Laws in
Maine
In June 2017, LD 820 was enacted
by the Maine legislature,
permitting mining of metallic minerals in Maine in certain prescribed situations. The
new legislation will take effect on November
1, 2017. Prior to the introduction of proposed new
legislation in 2013 and the enactment of LD 820 into law in 2017,
there was little mining and mineral exploration in Maine. Interest in the geology and potential
for VMS projects like the Pickett Mountain Project has revived with
zinc and copper price appreciation and the opening up of the mine
permitting regime under specific prescribed limitations. Wolfden
sees significant exploration opportunity in this jurisdiction that
it believes is vastly under-explored.
Wolfden management believes that the Property has excellent
potential to host an economic VMS deposit as evidenced by grades
obtained from historic diamond drilling1 that
intersected (horizontal widths):
- 18.66% Zn, 10.27% Pb, 1.63% Cu & 6.72 oz/t Ag over 7.70
metres
- 14.65% Zn, 6.48% Pb, 2.74% Cu & 3.78 oz/t Ag over 7.68
metres
- 15.95% Zn, 7.41% Pb, 1.41% Cu & 5.25 oz/t Ag over 7.30
metres
- 13.71% Zn, 5.25% Pb, 1.07% Cu & 3.57oz/t Ag over 6.30
metres
1 Data documented in an internal report
authored by Getty Mines Ltd.
The deposit has been traced over a strike length of close to 900
metres and appears to be open at depth. Wolfden plans to begin
drilling in the near future with a mineral resource estimate
planned in 2018.
Preliminary metallurgical test work completed on drill core
produced 3 floatation concentrates with resulting recoveries of 80%
for copper, 78% for lead and 88% for zinc; considered to be
excellent recoveries compared to most massive sulphide deposits
situated in the North American Appalachians. A number of untested
Cu-Pb-Zn soil anomalies situated along strike from the known
deposit and distal to the deposit, auger well for the potential to
find additional similar mineralization elsewhere on the land
tract.
The Acquisition
Pursuant to the terms of the Purchase Agreement, the Company has
agreed to acquire from a third party approximately 6,871 acres of
timberland (exclusive of surface area of great ponds), together
with all appurtenances, structures, improvements, and rights
associated therewith, as well as all minerals, mining, subsurface
and surface rights to the extent owned by the seller, all located
in Penobscot County, Maine and
which includes the Pickett Mountain Project, for cash consideration
of US$8.5 million. The completion of
the Acquisition is subject to, among other things, the completion
of a 45 day due diligence review period by the Company with respect
to certain matters including a title review of the project.
Private Placement
Pursuant to the Private Placement, the proceeds of the
Subscription Receipts will be held in escrow and released to the
Company upon the completion of the Acquisition. The Company intends
to use the proceeds of the Proposed Financing to fund the purchase
price of the Acquisition.
Upon the satisfaction of all conditions precedent to the
Acquisition (other than the payment of the purchase price), the
proceeds delivered into escrow will be released to the Company and
each holder of Subscription Receipts will receive, without the
payment of additional consideration or further action on the part
of the holder, one unit of the Company (each a "Unit"). Each
Unit will be comprised of one common share in the capital of the
Company (a "Common Share") and one half (1/2) common share
purchase warrant of the Company (a "Warrant"). Each whole
Warrant shall be exercisable to acquire one Common Share (a
"Warrant Share") at price per Warrant Share of C$0.35 for a period of 60 months from the closing
date of the Private Placement. If the Acquisition is not completed,
then the Subscription Receipts will be cancelled and the funds held
in escrow returned to Altius and any other investors.
The Private Placement is scheduled to close on or about
October 4, 2017, and is subject to
certain conditions including, but not limited to, the receipt of
all necessary approvals including the approvals of the TSX Venture
Exchange and due diligence by Altius.
The securities to be issued under the Private Placement Offering
will be offered by way of private placement exemptions in all the
provinces of Canada and in
the United States on a private
placement basis pursuant to exemptions from the registration
requirements of the United States Securities Act of 1933, as
amended. All securities issued pursuant to the Offering, including
the Subscription Receipts, will be subject to a statutory
four-month hold period in accordance with Canadian securities
legislation and the TSX Venture Exchange.
The securities being offered have not been registered under the
United States Securities Act of 1933, as amended, and may not be
offered or sold within the United
States or to, or for the account or benefit of, U.S. persons
absent U.S. registration or an applicable exemption from the U.S.
registration requirements. This news release does not constitute an
offer to sell or the solicitation of an offer to buy any
securities.
Subject to regulatory approval, the Company may pay finders'
fees to one or more parties in connection with the Acquisition
and/or the Private Placement.
About Wolfden Resources:
Wolfden is a mineral exploration company exploring the Rice
Island and Nickel Island properties in Manitoba. Manitoba is ranked #2 in Canada and #2 in the World as the most
favourable jurisdiction to conduct mining and exploration (Fraser
Institute (2016-2017). The Company also retains a 16,000 hectare
land position in the Bathurst Mining Camp in northern New Brunswick.
About Altius
Altius directly and indirectly holds diversified royalties and
streams that generate revenue from 15 operating mines. These are
located in Canada and Brazil and produce copper, zinc, nickel,
cobalt, iron ore, potash and thermal (electrical) and metallurgical
coal. The portfolio also includes numerous pre-development stage
royalties covering a wide spectrum of mineral commodities and
jurisdictions. In addition, Altius holds a large portfolio of
exploration stage projects which it has generated for deal making
with industry partners that results in newly created royalties and
equity and minority interests.
Altius has 43,208,291 shares issued and outstanding that are
listed on Canada's Toronto Stock
Exchange. It is a member of both the S&P/TSX Small Cap and
S&P/TSX Global Mining Indices.
The information in this news release has been prepared and
approved by Donald Hoy, M.Sc., P.
Geo., President and CEO and a director of the Company. Mr. Hoy is
also a Qualified Person under National Instrument 43-101.
Cautionary Statement regarding Forward-Looking
Information
This news release contains certain information that may
constitute forward-looking information or forward-looking
statements under applicable Canadian and United States securities legislation
(collectively, "forward-looking information"), including but not
limited to information about the structure, terms and timing of the
Acquisition; the structure, terms and timing of the Private
Placement (including the terms of the Subscription Receipts);
whether a binding agreement will be reached in respect of the
Financing Proposal; whether the Acquisition and the Private
Placement will be completed; whether all regulatory (including
stock exchange) and other requisite approvals will be obtained for
the Acquisition and the Private Placement; future drilling
activities at the Pickett Mountain Project; the timing and
completion of an anticipated mineral resource estimate at the
Pickett Mountain Project; and the scope of and the
anticipated effect of new mining legislation in Maine. This forward-looking information
entails various risks and uncertainties that are based on current
expectations and actual results may differ materially from those
contained in such information. These uncertainties and risks
include, but are not limited to, the strength of the global
economy; the price of base metals and minerals generally;
operational, funding and liquidity risks; the degree to which
mineral resource estimates are reflective of actual mineral
resources; the degree to which factors which would make a mineral
deposit commercially viable are present; the risks and hazards
associated with mineral exploration and mining operations; and the
ability of Wolfden to fund its substantial capital requirements and
operations. Risks and uncertainties about the Company's business
are more fully discussed in the Company's disclosure materials
filed with the securities regulatory authorities in Canada available at www.sedar.com. Readers are
urged to read these materials. Wolfden assumes no obligation to
update any forward-looking information or to update the reasons why
actual results could differ from such information unless required
by 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 Wolfden Resources Corporation