VANCOUVER, Aug. 25, 2016 /CNW/ - Eureka Resources Inc.
("Eureka" or the "Company") (TSXV: EUK) is pleased to announce
that it has entered into an option agreement dated August 24, 2016 (the "Agreement") with Canarc
Resource Corp. ("Canarc") which provides Canarc the ability to earn
up to a 75% interest in the Company's FG Property (the "Property").
The Agreement is subject to the approval of the TSX Venture
Exchange (the "TSXV").
Michael Sweatman, CEO of Eureka,
stated, "We are extremely happy to have attracted a group with the
financial resources and technical expertise of Canarc. Brad Cooke, Chairman of Canarc, and his team are
industry leaders with a long track record of success. Canarc will
advance the FG Property, bringing value to Eureka without further
dilution of the company."
Upon receipt of the approval of the TSXV, Canarc will issue
Eureka 250,000 common shares in the capital of Canarc, and purchase
750,000 units of Eureka under the Offering (as defined below).
In order to earn an initial 51% interest in the Property, Canarc
is required to:
(a)
|
incur aggregate
exploration expenditures of $1,500,000 on the Property, of
which:
|
|
|
|
(i)
|
at least $500,000 is
to be incurred in 2017,
|
|
|
|
|
(ii)
|
at least $500,000 is
to be incurred in 2018, and
|
|
|
|
|
(iii)
|
the balance of the
$1,500,000 is to be incurred in 2019; and
|
|
|
|
(b)
|
make the following
cash payments and issue the following Canarc Shares to
Eureka:
|
Payment
Date
|
Cash Payment
Amount
|
Number of
Canarc
Shares
|
First
Anniversary
|
50% of the British
Columbia Mineral
Exploration Tax Credit received by
Canarc (the "METC")
|
250,000
|
Second
Anniversary
|
50% of the
METC
|
250,000
|
Third
Anniversary
|
50% of the
METC
|
250,000
|
In order for Canarc to earn an additional 24% interest in the
Property (total – 75%), Canarc is required to:
(a)
|
incur exploration
expenditures of $1,500,000 on the Property between the third
anniversary and the fifth anniversary of the date of grant of the
option; and
|
|
|
(b)
|
make the following
cash payments and issue the following Canarc Shares to
Eureka:
|
Payment
Date
|
Cash Payment
Amount
|
Number of
Canarc
Shares
|
Fourth
Anniversary
|
The greater of: (i)
$75,000 or (ii)
50% of the METC
|
750,000
|
Fifth
Anniversary
|
The greater of: (i)
$75,000 or (ii)
50% of the METC
|
750,000
|
Upon exercise of the option by Canarc, the parties will form a
joint venture. During the option period and joint venture, Canarc
will be operator.
Private Placement Offering
The Company also announces that it plans to raise up to
$420,000 by offering 3,000,000 units
of the Company at a price of $0.14 per unit (the "Offering"). Each unit will
consist of one common share of Eureka and one warrant, each warrant
entitles the holder to acquire an additional half common share at
$0.20 per share for two years from
the closing of the Offering. All warrants issued under the Offering
will be subject to an acceleration clause.
The proceeds of the Offering will be used for working capital
and for exploration on the Company's Gemini property ("Gemini"),
The exploration program is estimated to cost US$500,000. Eureka is required to contribute 50%
of these costs (US$250,000) to
maintain its 50% interest.
All securities issued under the Offering will be subject to a
four-month hold period, during which time the securities may not be
traded. The Offering is subject regulatory approval, including the
approval of the TSX-V.
How to participate in the Offering
To participate in
the Offering, interested investors must complete the applicable
subscription agreement and return the completed subscription
agreement along with a certified cheque or bank draft for the total
purchase price payable to Eureka Resources Inc., at Suite 1100-1111
Melville Street, Vancouver, B.C.,
V6E 3V6. A subscription agreement may be obtained by contacting the
Company directly at (604) 449-2273 or by e-mailing
info@eurekaresourcesinc.com. Participation is subject to available
space and is at the discretion of the Company. Interested investors
are encouraged to return completed subscription agreements promptly
using commercial couriers or priority post. For additional
information, please contact the Company directly at (604)
449-2273.
FG Project
Eureka has held the FG Property (formerly called Frasergold)
since 1982. To date, over $15.0
million of exploratory work has been completed by the
Company, ASARCO, AMOCO and Hawthorne Gold Corp. The historical
exploration has established a Measured and Indicated (376,000
ounces) gold resource at an average grade of 0.776 g/t gold, using
a cut-off grade of 0.5 g/t, and an Inferred gold resource (634,900
ounces) at an average grade of 0.718 g/t gold, using a cut-off
grade of 0.5 g/t. Mineralization has been outlined over a strike
length of 3 kilometres, and has the potential for additional
mineralization that could extend along an interpreted strike length
of over 10 kilometres. Details of the gold resource can be found in
"NI 43-101 Technical Report, Frasergold Exploration Project,
Cariboo Mining Division, dated July 27,
2015" available on SEDAR or at the Company's website.
Gemini Lithium Project
Eureka owns a 50% participating
interest in the Gemini lithium brine project, located in the
western Lida Valley, located in Esmeralda
County in south central Nevada, approximately 40 kilometres (26 miles)
from North America's only
producing lithium mine at Silver Peak. The Lida Valley is a flat,
desert basin hosting two interpreted sub-basins and with a similar
geological setting to the Clayton Valley. Gemini currently consists
of 247 placer claims totaling 4,940 acres (2,000
hectares).
John R. Kerr, P.Eng., is the
Company's designated Qualified Person for this news release within
the meaning of NI 43-101 and has reviewed and approved the
technical information described in this news
release.
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 news release.
Cautionary Statement Regarding Forward-Looking
Information
This news release includes certain "forward-looking
statements" under applicable Canadian securities legislation that
are not historical facts. Forward-looking statements involve risks,
uncertainties, and other factors that could cause actual results,
performance, prospects, and opportunities to differ materially from
those expressed or implied by such forward-looking statements.
Forward-looking statements in this news release include, but are
not limited to, statements with respect to the Company's proposed
financings, objectives, goals or future exploration plans at the FG
Project and the Gemini Project, including the grant of the option
on the FG Property to Canarc, the proposed Offering and the
business and operations of the Company. Forward-looking statements
are necessarily based on a number of estimates and assumptions
that, while considered reasonable, are subject to known and unknown
risks, uncertainties and other factors which may cause actual
results and future events to differ materially from those expressed
or implied by such forward-looking statements. Such factors
include, but are not limited to: failure to obtain the approval of
the TSXV for the Canarc option and/or the Offering; general
business, economic and social uncertainties; litigation,
legislative, environmental and other judicial, regulatory,
political and competitive developments; delay or failure to receive
board or regulatory approvals; those additional risks set out in
the Company's public documents filed on SEDAR at www.sedar.com; and
other matters discussed in this news release. Although the Company
believes that the assumptions and factors used in preparing the
forward-looking statements are reasonable, undue reliance should
not be placed on these statements, which only apply as of the date
of this news release, and no assurance can be given that such
events will occur in the disclosed time frames or at all.
Except where required by law, the Company disclaims any intention
or obligation to update or revise any forward-looking statement,
whether as a result of new information, future events, or
otherwise.
SOURCE Eureka Resources, Inc.