Strategic Position in BC's Cariboo Gold
District with Flagship FG Gold Project
VANCOUVER, BC, Dec. 16, 2020 /CNW/ - KORE Mining Ltd. (TSXV:
KORE) (OTCQX: KOREF) ("KORE" or the "Company") is
pleased to announce plans to transfer all of its British Columbia ("BC") gold
exploration assets ("Spin-out") into a newly incorporated
company: Karus Gold Corp. ("Karus" or "Karus Gold").
Highlights of Karus
Gold:
- Unlocks value of BC assets for KORE shareholders through
creation of Karus Gold
- Dominant 1,000 km2 land position in the emerging
Cariboo Gold District with Osisko Development Corp (TSX:ODV)
investing heavily to the north
- Flagship FG Gold project open for growth after 2020 Lower Zone
discovery intercepts of:
-
- 10.0 meters of 3.9 g/t gold at 237 meters downhole
- 14.3 meters of 6.4 g/t gold at 386 meters downhole
- Controls under-explored 110 km trend including five
high-priority gold prospects
- Results from 14 FG Gold holes and ongoing Gold Creek drilling
expected through Q1 2021
Click here to for a CEO audio clip on the proposed
Spin-out.
Following the Spin-out, one hundred percent of Karus Gold common shares (the "Karus
Shares") will be distributed to KORE shareholders on a pro rata
basis to their KORE holdings. Karus
Gold will not initially be listed on a public stock exchange
but will operate as a reporting issuer in British Columbia and Alberta. In early 2021, Karus Gold intends to conduct a rights offering
to all Karus shareholders to initially capitalize the company,
followed by a planned public stock exchange listing in the first
half of 2021. Karus Gold would have the advantage of the
ongoing drilling at Gold Creek and results from the completed FG
Gold drill program expected to be released through Q1 2021.
The Spin-out would enable KORE's shareholders to realize the
expected growth and returns from exploration investment through
direct ownership in Karus
Gold. Upon completion of the Spin-out, KORE will
continue as a leading gold company with a focus on growing and
developing the Imperial and Long
Valley gold projects. The transaction is supported by
Mr. Eric Sprott, KORE's largest
shareholder.
KORE's CEO Scott Trebilcock
stated: "The creation of Karus Gold
unlocks value for KORE shareholders, by providing direct exposure
to high return exploration in the rapidly emerging Cariboo Gold
District. KORE continues to focus on exploration and
development of its pipeline of gold assets in California.
KORE shareholders will be offered equal access to the initial
capitalization of Karus Gold through
a planned rights offering in early 2021. KORE shareholders
helped the Company achieve strong returns in 2020 and we plan on
delivering again in 2021."
Eric Sprott, KORE's largest
shareholder commented, "I support management teams that actively
work to generate shareholder value. I am pleased to support
this transaction to daylight value of KORE's strategic position in
the Cariboo Gold District."
Additional information about Karus
Gold is available at www.koremining.com/Karus.
Terms of the Arrangement
KORE has executed an
arrangement agreement whereby the business of KORE will be
reorganized into two companies by way of a plan of arrangement (the
"Arrangement") under the Business Corporations Act
(British Columbia). KORE
will apply for an interim order from the Supreme Court of
British Columbia on or about
December 18, 2020, authorizing the
Company to call a shareholder meeting to approve the
Arrangement.
KORE shareholders will vote on the Arrangement at a special
meeting of shareholders (the "Meeting") which is expected to
be held on or about January 20, 2021
at 10:00 am Pacific Time. In
light of the ongoing COVID-19 pandemic, the Meeting will be held by
way of virtual only format whereby shareholders may participate in
the Meeting remotely. To be effective, the Arrangement must be
approved by a special resolution passed by at least 66⅔% of the
votes cast by KORE shareholders present or represented by proxy at
the Meeting and 50% of the disinterested shareholder votes cast by
KORE shareholders present or represented by proxy at the
Meeting. Each shareholder is entitled to one vote for each
KORE common share held.
For purposes of voting on the Arrangement, 2176423 Ontario Ltd.
(a corporation beneficially controlled by Mr. Eric Sprott), which holds 25.75% of the
Company's currently issued and outstanding common shares is an
insider and control person, will be excluded from the disinterested
vote as the sole warrant holder of KORE. Pursuant to the
Arrangement, 2176423 Ontario Ltd. will be issued 1,750,000
Karus warrants at an exercise price of $0.75 per Karus
Share, exercisable for the same period of time as the KORE
warrants.
The Arrangement involves, among other things, the distribution
of Karus Shares to KORE shareholders such that each KORE
shareholder will hold one Karus
Share for every two common shares of KORE held on the
effective date of the Arrangement and collectively, KORE
shareholders, other than dissenting shareholders, will own 100% of
Karus Gold. There will be no change
in the number of shareholdings of individual KORE shareholders as a
result of the Spin-Out.
After careful consideration, the Board of Directors has
unanimously determined that the Arrangement is in the best
interests of the Company. A description of the various factors
considered by the Board of Directors in arriving at this
determination will be provided in the management information
circular (the "Circular").
The Arrangement is anticipated to be completed in late
January 2021 subject to receipt of
required shareholder, court and other approvals and satisfaction of
other closing conditions. Further details will be contained in the
Circular to be issued in connection with the Meeting, which will be
mailed to shareholders in advance of the Meeting following receipt
of the interim order. Shareholders of the Company are
cautioned that there can be no assurance that the Arrangement will
be completed on the terms described herein or at all.
After closing of the Arrangement, new KORE shares will continue
trading on the TSX Venture Exchange in Canada under the symbol KORE and on the OTCQX
in the United States. Karus
Gold Shares will not be listed on a stock exchange after closing of
the Arrangement but Karus will be a reporting issuer in
British Columbia and Alberta and will comply with its continuous
disclosure obligations including press releases and financial
reporting. Karus Gold intends
to conduct a rights offering to initially capitalize itself,
followed by a public stock exchange listing. The Karus Board
will consider other opportunities to enhance value including
mergers and acquisitions in addition to a potential stock exchange
listing.
Karus Gold's day-to-day
activities will be managed by James
Hynes as interim CEO, Jessica Van
Den Akker as CFO and Corporate Secretary and Michael Tucker as VP Exploration. Mr.
Hynes and Mrs. Van Den Akker, will
also continue with their KORE responsibilities. Immediately upon
the closing of the Arrangement, the Board of Karus Gold will consist of Scott Trebilcock, James
Hynes, Marc Leduc and
Jessica Van Den Akker. In
support of a public stock exchange listing, it is expected that
Karus will engage a permanent CEO and appoint new independent
Directors.
About KORE's South Cariboo Exploration Assets
KORE
controls a dominant 1,000 square kilometers of claims in its South
Cariboo Gold District of British Columbia. The claims host
110 km of structural trend that is highly prospective for gold
deposits. The north part of the Cariboo Gold District is
controlled by Osisko Development Corp (TSXV: ODV), which is
financing a major exploration and development program that will
bring attention to the Cariboo Gold District. KORE has
multiple projects in the Cariboo Gold District, including the FG
Gold and Gold Creek gold projects. Much of the area is
under-explored and wide open for additional discoveries. The
Cariboo region is a prolific gold region. The Cariboo Gold
District was host to the Cariboo gold rush in the late 1800's,
followed by a long history of modern gold mining. The Cariboo
region is accessible with local power, a well-developed road
network and skilled local labour.
The FG Gold project hosts an orogenic gold deposit on a 20 km
trend defined by gold in soils and geophysics. Drilling
performed by KORE in 2020 transformed the project, opening up the
potential for both open pit and underground type
mineralization. The project also hosts copper-gold porphyry
mineralization at the Nova Zone, discovered by KORE in 2018.
Details of FG Gold Lower Zone discovery including intercepts
reported above are detailed in November 11,
2020 Company news release.
The Gold Creek project is an orogenic gold discovery centered on
the "Camp Zone" which show similarities to the high-grade zone of
the nearby Spanish Mountain Gold Deposit (TSXV:SPA). The Camp
Zone's near surface mineralization currently extends over 400
metres along strike and is open along both strike and at
depth. KORE is currently drilling a 2,000-meter program to
expand Gold Creek.
In connection with the transaction, the Company and Karus will
file an updated National Instrument 43-101 compliant Technical
Report titled "Technical Report on the South Cariboo Property,
British Columbia, Canada"
effective November 15, 2020, prepared
by independent qualified persons Ron
Voordouw, P.Geo., Henry
Awmack, P. Eng., and Equity Exploration Consultants Ltd (the
"Updated Report"). The Updated Report replaces the
previously filed technical report issued to Eureka Resources Inc.
in 2015 and amends prior disclosure regarding mineral resources on
the FG Gold and Gold Creek gold projects. The Updated Report
will be available on the Company's website at
www.koremining.com/Karus and under KORE's profile on SEDAR at
www.sedar.com.
About KORE Mining
KORE is 100% owner of a portfolio of
advanced gold exploration and development assets in California and British Columbia. KORE is
supported by strategic investor Eric
Sprott who recently invested $7.0
million, bringing his total ownership to 26%. KORE
management and Board are aligned with shareholders, owning an
additional 38% of the basic shares outstanding. KORE is
actively developing its Imperial Gold project and is aggressively
exploring across its portfolio of assets.
Further information on the Spin-out and KORE can be found
on the Company's website at www.koremining.com/Karus or by
contacting us as karusgold@koremining.com.
On behalf of KORE Mining Ltd
"Scott
Trebilcock"
Chief Executive Officer
Karus Gold Spin Out Investor Support
David Jan
1-888-455-7620
karusgold@koremining.com
KORE Investor Relations
Arlen
Hansen, KIN Communications
1-888-684-6730
kore@kincommunications.com
Technical information with respect to the Cariboo Gold District,
FG Gold and the Gold Creek Projects contained in this news release
has been reviewed and approved by Michael Tucker, P. Geo. who
is KORE's VP Exploration and is the qualified person under National
Instrument 43-101 responsible for the technical matters of 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 release.
Cautionary Statement Regarding Forward-Looking Information
This news release contains forward-looking statements relating
to the future operations of the Company and Karus Gold and other statements that are not
historical facts. Forward-looking statements are often identified
by terms such as "will", "may", "plan", "should", "anticipate",
"expects", "intends", "indicates" and similar expressions. All
statements other than statements of historical fact, included in
this release, including, without limitation, statements regarding
the future plans and objectives of the Company and Karus Gold are forward-looking statements.
Forward-looking statements in this news release include, but are
not limited to, the expected timeline and date of completion of the
Arrangement, the ability of KORE to receive and obtain shareholder
approval and court approval, the ability of the parties to satisfy,
in a timely manner, the other conditions to closing of the
Arrangement, the future listing of Karus
Gold and the expected timeline and completion of the
anticipated Karus rights offering. There can be no assurance that
the Arrangement will be completed or that it will be completed on
the terms and conditions contemplated in this news release. The
Arrangement could be modified or terminated in accordance with its
terms. Such forward-looking statements, and any assumptions upon
which they are based, are made in good faith and reflect our
current judgment regarding the direction of our business.
Management believes that these assumptions are reasonable.
Forward-looking information involves known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking information.
Such factors include, among others: the Arrangement will be
completed on the terms currently contemplated, the Arrangement will
be completed in accordance with the timing currently expected
without any undue delay, all conditions to the completion of the
Arrangement will be satisfied or waived in due course and the
Arrangement Agreement will not be terminated prior to the
completion of the Arrangement, assumptions and expectations related
to the trading price of KORE and the future listing of Karus Gold, and other expectations and
assumptions concerning the Arrangement.
In addition to the above summary, additional risks and
uncertainties inherent to the Company and its operations are
described in the "Risk Factors" section of the Company's management
discussion and analysis for the year ended December 31, 2019, prepared as of April 27, 2020, available under the Company's
issuer profile on www.sedar.com. Other risks and uncertainties
include, among other things: the Arrangement may not be completed
on the terms, or in accordance with the timing currently
contemplated, or at all; the Company and Karus Gold has incurred expenses in connection
with the Arrangement and will be required to pay for those expenses
regardless of whether or not the Arrangement is completed; the
Company and Karus Gold may not be
successful in satisfying the conditions to the Arrangement,
including failing to obtain KORE shareholder approval; the
possibility of adverse reactions or changes in business
relationships resulting from the announcement or completion of the
Arrangement; the failure to realize the expected benefits of the
Arrangement; and other risks inherent to KORE's current business
and/or factors beyond its control which could have a material
adverse effect on KORE or the ability to consummate the
Arrangement.
Forward-looking statements contained herein are made as of the
date of this news release and the Company disclaims any obligation
to update any forward-looking statements, whether as a result of
new information, future events or results, except as may be
required by applicable securities laws. There can be no assurance
that forward-looking information 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 information.
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SOURCE Kore Mining