TORONTO, July 18,
2023 /CNW/ - 1911 Gold Corporation ("1911 Gold" or
the "Company") (TSX-V: AUMB) (OTC: AUMBF) is pleased to
announce the signing of a letter agreement (the "Agreement")
with Grid Metals Corp. ("Grid") to lease the True North mill
complex for future processing of spodumene pegmatite (lithium ore)
from Grid's Donner Lake Lithium Project in southeastern
Manitoba, Canada.
Highlights:
- Significant cash payments on signing and throughout the
leasing arrangement. Execution of the agreement includes an
upfront cash payment of C$750,000,
with an additional C$1,000,000 cash
payment due in 90 days upon completion of further technical due
diligence. The lease arrangement involves milestone payments, a net
smelter royalty of 1%, and ongoing payments to cover operating and
depreciation costs during the term.
- Capital investment into the True North mill and tailings
facilities. Grid intends to upgrade and modify the current mill
configuration to provide for the processing of spodumene-bearing
ore in addition to gold ores. They have engaged Primero Group Ltd.
("Primero"), one of the pre-eminent engineering consulting firms in
the lithium industry, to complete a scoping study over the first 90
days to assess the viability of modifying the current mill
configuration to handle spodumene-bearing ore.
- Toll milling agreement to process future 1911 Gold ore
during the lease term. The Agreement includes the terms for a
toll milling agreement to facilitate the processing of 1911 Gold
ores during the lease period. With this agreement 1911 Gold will
maintain flexibility to phase-in gold ores from the True North mine
and other potential ore sources on its 63,000-hectare property.
- "We are pleased to be entering into this agreement with Grid
Metals to utilize the existing infrastructure at True North."
Shaun Heinrichs, President and CEO,
stated, "Our focus will continue to be on growing the existing True
North resource, through exploration and acquisitions, as well as
further advancing the Central
Manitoba project to assess its potential for future
high-grade gold production. This agreement with Grid provides us
with a valuable partner in maintaining our assets — a partner that
is focused on strategic metals and is backed by experienced
management and long-term investors. The investments made into our
infrastructure under this agreement will ultimately support our own
return to production and we will work with our new partners to
scale the facilities as required."
The Agreement contains the primary terms which, upon completion
of the 90-day due diligence period, will form the basis of a
Definitive Lease Agreement between 1911 Gold (lessee) and Grid
(lessor). Primero has been engaged by Grid to complete a detailed
engineering analysis of the existing 1,300 ton per day mill to
assess the extent of the upgrades and modifications that will be
required to support the processing of spodumene-bearing pegmatite
ore. A preliminary assessment has already been completed by Primero
in order to support the signing of this Agreement and make the
required advance payments noted below.
Summary of the Terms
The key terms of the Agreement are as follows:
- Initial lease term of 5 years and a 2 year notice period for
cancellation of the lease following the initial lease term. The
lease can be extended by mutual agreement for an additional 5
years.
- During the term of the lease, Grid shall have the right to
reconfigure the mill and process spodumene-bearing (lithium) ore,
and to discharge from the mill to the existing tailings
facility.
- Toll milling agreement terms for the processing of 1911 Gold
ores during the lease period, to be incorporated into the
Definitive Lease Agreement.
- Grid will make the following initial payments to 1911 Gold on
signing of the Agreement:
-
- An upfront non-refundable payment of C$300,000; and
- An equity investment of C$450,000
within 90 days, subject to the applicable regulatory approvals. If
regulatory approval cannot be obtained, Grid shall make a
corresponding cash payment to 1911 Gold.
- Unless terminated within 90 days by Grid, an additional
C$1,000,000 will be paid to 1911 Gold
comprised of a C$250,000 lease
payment and a C$750,000 financial
assistance payment. Financial assistance payments are non-interest
bearing but secured by the True North mill, such security to be
released upon termination of either the Agreement or, once
completed, the Definitive Lease Agreement.
- Grid will make the following payments to 1911 Gold on signing
and during the term of a Definitive Lease Agreement:
-
- Financial assistance payment of C$1,000,000 to 1911 Gold's financial security
obligations to the Province of Manitoba (relating to the mine closure plan
for the True North complex) for the period ending December 31, 2023, with an additional
C$1,000,000 due by the end of 2024
and a final C$900,000 due by the end
of 2025.
- C$1,000,000 upon commencement of
commercial production by Grid at the mill, defined as the
processing of at least 200,000 tonnes of spodumene-bearing
ore.
- Monthly payments for operating costs incurred in support of
milling activities.
- A 1% net smelter return royalty in favour of 1911 Gold, subject
to Grid receiving a right of first refusal on any disposition by
1911 Gold.·
- A depreciation fee payment of $7.50 per tonne of lithium ore processed through
the True North mill.
- If Grid elects to extend the lease agreement for an additional
5-year period, subject to 1911 Gold's option to terminate the
agreement with 2 years' notice, the following additional payments
will be made:
-
- Up to C$10,000,000 for the full
five-year lease extension towards any increased financial security
costs arising from increased closure costs, prorated in the event
that 1911 Gold exercises the option to terminate the lease.
- C$1,000,000 on each of the fifth
and sixth anniversaries of the lease.
- The Agreement will automatically terminate upon written notice
from Grid for a period of up to 90 days from date of signing
provided the initial payments have been completed. Thereafter Grid
may terminate the Agreement once it has made a cumulative total of
C$2,500,000 in total payments.
- Following the 90-day due diligence period and additional
required payments, 1911 Gold shall permit Grid to register a
floating charge security interest on the True North mill assets in
an amount representing Grid's total financial assistance payments
and capital expenditures.
Grid is pursuing a two stage permitting process at Donner
Lake. An Advanced Exploration Permit ("AEP") application is
expected to be submitted which will enable a bulk sample of up to
50,000 tonnes from Donner Lake. The second permitting step is
an application for an Environmental Act Licence (mining permit).
The True North complex will require an amendment to its existing
permits in order to enable the processing of spodumene pegmatite
(lithium ore) as well as for any increase in existing tailings
capacity that will be required.
About 1911 Gold
Corporation
1911 Gold is a junior explorer that holds a highly prospective,
consolidated land package totalling more than 63,000 hectares
within and adjacent to the Archean Rice Lake greenstone belt in
Manitoba, and also owns the True
North mine and mill complex at Bissett,
Manitoba. 1911 Gold believes its land package is a prime
exploration opportunity, with potential to develop a mining
district centred on the True North complex. The Company also owns
the Apex project near Snow Lake,
Manitoba and the Tully and Denton-Keefer projects near
Timmins, Ontario, and intends to
focus on both organic growth and accretive acquisition
opportunities in North
America.
1911 Gold's True North complex and exploration land package are
located within the traditional territory of the Hollow Water First
Nation, signatory to Treaty No. 5 (1875-76). 1911 Gold looks
forward to maintaining open, co-operative and respectful
communication with the Hollow Water First Nation, and all local
stakeholders, in order to build mutually beneficial working
relationships.
ON BEHALF OF THE BOARD OF DIRECTORS
Shaun Heinrichs
President and CEO
(604) 674-1293
sheinrichs@1911gold.com
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING INFORMATION
This news release may contain forward-looking statements. Often,
but not always, forward-looking statements can be identified by the
use of words such as "plans", "expects" or "does not expect", "is
expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not anticipate", or "believes",
or describes a "goal", or variation of such words and phrases or
state that certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or be achieved.
All forward-looking statements reflect the Company's beliefs and
assumptions based on information available at the time the
statements were made. Actual results or events may differ from
those predicted in these forward-looking statements. All of the
Company's forward-looking statements are qualified by the
assumptions that are stated or inherent in such forward-looking
statements, including the assumptions listed below. Although the
Company believes that these assumptions are reasonable, this list
is not exhaustive of factors that may affect any of the
forward-looking statements.
Forward-looking statements involve known and unknown risks,
future events, conditions, uncertainties and other factors which
may cause the actual results, performance or achievements to be
materially different from any future results, prediction,
projection, forecast, performance or achievements expressed or
implied by the forward-looking statements. All statements that
address expectations or projections about the future, including,
but not limited to, statements about exploration plans and the
timing and results thereof, are forward-looking statements.
Although 1911 Gold has attempted to identify important factors that
could cause actual actions, events or results to differ materially
from those described in forward-looking statements, there may be
other factors that cause actions, events or results not to be as
anticipated, estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements.
All forward-looking statements contained in this news release
are given as of the date hereof. The Company disclaims any
intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or
otherwise, except in accordance with applicable securities
laws.
Neither 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 1911 Gold Corporation