VANCOUVER, BC, Sept. 1, 2020 /CNW/ - Fosterville South
Exploration Ltd. ("Fosterville South" or the "Company")
intends to enter into an Arrangement Agreement with Leviathan Gold
Ltd. ("Leviathan Gold") contemplating a plan of arrangement (the
"Plan of Arrangement") involving Leviathan Gold, the Company and
the securityholders of the Company whereby the shares of Leviathan
Gold are distributed to the securityholders of the Company (the
"Shares"). Following the spin-out transaction, Leviathan Gold
will explore, advance and develop the highly prospective gold
focused Avoca and Timor projects.
Highlights:
- Creates immediate shareholder value for Fosterville South
shareholders as each Fosterville South shareholder will receive one
share of Leviathan Gold for every share held of Fosterville South
as of record date.
- Leviathan Gold to carry out an immediate drill program on
high-grade gold prospects located on the Avoca and Timor projects
following closing of the spin-out transaction & full
permitting.
- Timor project contains the underexplored high-grade Great, New
and Old Leviathan Reefs, which is situated over a 5 km strike with
significant potential at depth.
Anticipated Record and Effective Date
The Company intends to seek an interim order (the "Interim
Order") from the Supreme Court of British
Columbia for, among other things, the Company to call and
hold an annual and special meeting (the "Meeting") of its
shareholders (the "Securityholders") for the following purposes:
(i) to consider and, if thought advisable, to pass, with or without
variation, a special resolution (the "Arrangement Resolution") to
approve the Plan of Arrangement; and (ii) to transact such other
business, including annual meeting matters, as may properly be
brought before the Meeting.
The record date for determining securityholders of record of the
Company entitled to receive notice of and vote at the Meeting,
is Thursday, September 3, 2020.
The target date of the Meeting is October
16, 2020 with further details to be provided via the
Company's filings on www.sedar.com.
The aforementioned dates are subject to the approval of the
Court and may be changed as required by the Court.
If approval is obtained at the Meeting, the Company intends to
make October 22, 2020 the effective
date of the Spin Out (the "Effective Date"). All shareholders of
Fosterville South as of the Effective Date of October 22, 2020 would receive one common share
of Leviathan Gold for every one common share of Fosterville South
that they hold.
Fosterville South CEO, Bryan
Slusarchuk states, "The spinout of the Avoca and Timor
assets has been designed in a way that directly benefits
Fosterville South shareholders who own shares as at October 22, 2020 (or such other date as the
Company may determine to be the Effective Date of the spin out).
These are exceptionally exciting assets and they deserve the focus
of a purpose formed technical and capital markets team to unlock
the value the properties possess. Luke
Norman and his team are highly experienced and we are
delighted to be working closely with them during and post this
transaction to unlock the value of these properties. While dates
are now set as to the corporate transaction, much work has already
been taking place from a technical perspective. A program in the
field including drilling is being planned and Leviathan Gold will
truly be able to hit the ground running once up and
running."
Assets for Spin Out
Fosterville South will retain ownership of all of its core gold
focused properties: the Lauriston Gold Project, the Golden Mountain
Project, the Providence Project and the Walhalla Belt Project. All
of these properties have significant high-grade historical mining,
potential for orogenic gold deposits and compelling drill targets.
Fosterville South is currently drilling, as previously reported, at
the Golden Mountain project and is actively preparing targets at
Lauriston for drilling.
Leviathan will acquire the Avoca and Timor granted exploration
licenses located in the state of Victoria.
Avoca Project
The Avoca project is centred on mesothermal quartz-vein-hosted
gold and related placer-style "deep lead" gold mineralization.
There is a considerable local history of mining both kinds of
deposit. The term "deep lead" refers to buried auriferous river-bed
deposits. The Avoca goldfield produced approximately 750,000 ounces
of gold largely from alluvial gold deposits.
The Avoca project is located approximately 183 kilometres west
northwest of the Victorian state capital Melbourne, with good
road access. The Avoca project occurs within the geological area
known as the Stawell zone, west of the Bendigo
and Melbourne zones, which are all part of the Lachlan
Fold Belt.
Having previously been mined with a significant amount of gold
production from both alluvial and hardrock high-grade sources,
Fosterville South considers the Avoca project is highly prospective
for hardrock structurally controlled gold deposits. A number of
major fault zones have been recognized that strike for several
kilometres. Gold mineralization within the Stawell zone is
generally base metal sulphide related, which Fosterville South sees
as an opportunity for disseminated or fine-grained gold
mineralization.
The significant hard rock historic mines within the Avoca
licence include the high-grade:
- Pyrenees reefs -- 16,199 tons mined for 16,602 ounces of gold
to 130 metres at an average recovered grade of 32 g/t gold, worked
from 1860 to 1912;
- Excelsior reef -- 13,200 tons mined for 9,260 ounces of gold to
100 metres at an average recovered grade of 22 g/t gold, worked
from 1909 to 1915;
- Vale's reefs -- 1,444 tons mined for 1,388 ounces of gold to 52
metres at an average recovered grade of 29.4 g/t gold, worked from
1865 to 1883; and
- Monte Christo reefs -- 2,795 tons mined for 937 ounces of
gold to 30 metres at an average recovered grade of 10.3 g/t gold,
worked from 1872 to 1877.
The production noted above was obtained from State of Victoria
Mining Surveyors and Registrar's quarterly reports from 1860 to
1891 and annual reports issued thereafter. All the production
occurred within the Avoca licence.
Defined mineralization shoots are present at both the Pyrenees
reef and Excelsior reef, as shown from the underground mine plans
held for both deposits, making for easier drill targeting.
In terms of alluvial gold deposit potential, the Avoca Subbasin,
located within the Avoca project, is also projected to contain one
of the largest singular unmined deep lead alluvial gold deposits
within Victoria.
Timor Project
The Timor project occurs immediately east of the Avoca project
and occurs within the Bendigo zone of the Lachlan Fold Belt.
The Timor project area contains numerous hardrock and alluvial
gold deposits evidenced by significant historical workings.
Historical alluvial production within the Timor project area is
believed to have been in the region of 640,000 ounces of gold.
Around 20 hardrock workings can be considered to have been
significant producers. These include the Leviathan group of mines,
with recorded gold production of 56,474 ounces of gold from 189,085
tonnes, equating to a recovered grade of approximately 9.14 g/t
gold. The Leviathan structural corridor hosts several parallel
quartz veins over a 5 km strike with most of the production coming
from one mine active in the early 1900s. Significant potential
occurs within the various other veins and faults within the
corridor to the north.
In addition, Shaw's reef produced 16,881 tons mined for 12,623
ounces of gold to 130 metres at an average recovered grade of 22.9
g/t gold, worked from 1883 to 1891. Along strike of this fault zone
arsenopyrite and stibnite mineralization is recorded in association
with the gold mineralization indicating possible epizonal
Fosterville-style gold mineralization.
Both these former mines lie on separate large regional
north-south fault structures known to occur for tens of kilometres
with a number of hardrock workings over their length. Neither of
these two major structures have had significant drilling within the
tenement. One traverse of RC drilling was carried out across the
Leviathan structure and one diamond drill hole too. No drilling has
occurred specifically on the Shaw's reef fault zone. These two
mineralized structures are a primary focus for exploration within
the project.
Terms of Transaction
Under the terms of the Spin Out, the shareholders of Fosterville
South will receive one share of Leviathan for each share of
Fosterville South held. The Spin Out will also provide that
the shares issued under the Spin Out will be subject to the
following restrictions on resale: 25% will be restricted for four
months from the Effective Date, an additional 25% will be
restricted for eight months from the Effective Date, an additional
25% will be restricted for twelve months from the Effective Date,
and the final 25% will be restricted for sixteen months from the
Effective Date.
It will be a condition to closing of the Spin Out that Leviathan
obtains a listing as a publicly traded company on the TSX Venture
Exchange under the name "Leviathan Gold Ltd." Further, Leviathan
plans to undertake a financing of at least $5,000,000 in
connection with the Spin Out. The price and other terms of
the financing will be announced soon, and it is envisioned that
common shares issued in this financing will be the only free
trading shares of Leviathan at the date of listing.
The proposed board of directors of Leviathan will
include Luke Norman and Robert Schafer. Luke
Norman will be the Chief Executive Officer of Leviathan.
Leviathan will issue a total of 6,000,000 common shares of
Leviathan to the new management team as a part of the Spin Out.
Proposed Board of Directors of Leviathan
Luke Norman, Proposed Chief Executive Officer and
Director
Luke Norman is a seasoned growth executive
with 20 years of experience in the venture capital markets. He has
raised in excess of $300M for both public and private
companies predominantly in the resource sector. In recent years,
Mr. Norman has operated a consultancy company to the metals and
mining industry. He also co-founded Gold Standard Ventures Corp., a
TSX-V and NYSE Market listed gold exploration company and US Gold
Corp., listed on the Nasdaq exchange. He is the Chairman of Silver
One Resources, a silver pre-development and exploration company
listed on the TSX-V. Mr. Norman brings expertise in mineral
exploration, finance, corporate governance, M&A and corporate
leadership to his role as President & CEO.
Robert Schafer, Proposed
Director
Mr. Schafer has nearly 40 years of experience in
the mineral industry, working in the international sector with both
major and junior mining companies. He is founder and Managing
Director of Eagle Mines Management, a globally active private
natural resources corporation. He has held executive and senior
management positions with Hunter Dickinson Inc., Kinross Gold
Corp., and BHP Minerals over the past 20 years. Throughout his
career, Bob has worked internationally, with notable experience in
the far east of Russia, Southern Africa, South
America and Australia.
Mr. Schafer's work has included the structuring and
implementation of successful exploration strategies, project
reviews and valuations leading to acquisitions, and the management
of local and expatriate exploration teams operating in a wide
variety of geologic environments. In addition, Bob is the
Past-President of the PDAC and Past-President of the Canadian
Institute of Mining and Metallurgy (CIM) in Canada. In
addition, he is the 2020-21 President of the Society for Mining,
Metallurgy and Exploration (SME) and a Past President of the Mining
and Metallurgical Society of America and the Geological Society
of Nevada in the USA.
Appointment of Fasken Martineau DuMoulin LLP and Clarus
Securities Inc.
Fosterville South has retained Fasken Martineau DuMoulin LLP as
special legal counsel for the Spin Out transaction, and Clarus
Securities Inc. to provide a fairness opinion on the Spin Out.
Qualified Person
The technical content of this news release has been reviewed,
verified and approved by Neil 'Rex' Motton, P. Geo., COO and
Director of Fosterville South; a qualified person as defined by NI
43-101. Historical records were verified by reviewing State
of Victoria Mining Surveyors and Registrar's quarterly reports from
1860 to 1891 and annual reports issued thereafter.
On behalf of the Company
Bryan Slusarchuk
Chief Executive Officer and Director
Forward-Looking Statements
Information set forth in this news release contains
forward-looking statements that are based on assumptions as of the
date of this news release. These statements reflect management's
current estimates, beliefs, intentions and expectations. They are
not guarantees of future performance. Fosterville South cautions
that all forward looking statements are inherently uncertain and
that actual performance may be affected by many material factors,
many of which are beyond their respective control. Such factors
include, among other things: risks and uncertainties relating to
the receipt approvals to complete the Spin-Out, the satisfaction of
the conditions precedent to the completion of the Spin Out,
exploration risk with respect to the Avoca and Timor Projects,
Fosterville South's limited operating history, its proposed
exploration and development activities on is Lauriston and Golden
Mountain Properties and the need to comply with environmental and
governmental regulations. Accordingly, actual and future
events, conditions and results may differ materially from the
estimates, beliefs, intentions and expectations expressed or
implied in the forward-looking information. Except as required
under applicable securities legislation, Fosterville South does not
undertake to publicly update or revise forward-looking
information.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the Exchange)
accepts responsibility for the adequacy or accuracy of this
release.
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SOURCE Fosterville South Exploration Ltd.