VANCOUVER, BC, Sept. 21, 2021 /CNW/ - Kainantu Resources Ltd.
(TSXV: KRL) (FSE: 6J0) ("KRL" or the "Company"), the Asia-Pacific focused gold mining company
provides an update on completion steps to acquire control of the
May River Project ("Acquisitions") in the world-renowned
copper-gold district of Frieda
River, Papua New Guinea
("PNG").
Background
In a press release dated June 15,
2021 ("June Release"), KRL announced the execution of two
definitive agreements to acquire control of the May River Project
("Project") through the acquisition of two unrelated holding
companies: Hardrock Limited ("Hardrock") and Niuminco Group Limited
("Niuminco"). On closing of the definitive agreements, KRL
would consolidate three adjoining tenements, as detailed in Figure
1.
Figure 1: May River Project Tenements
Exploration
Licence/Name
|
Size
|
Current
Holder
|
Prospects/Anomalous Areas
|
EL2603 - May
River
|
331 km²
|
Hardrock
|
Skiraisa, Foya,
Mountain Gate
|
EL2623 -
Hotmin
|
1272 km²
|
Hardrock
|
Various Au-Cu
drainage anomalies
|
EL2527 - Iku
Hill
|
94 km²
|
Niuminco (ND)
Ltd.
|
Iku Hill
|
The three
tenements were previously contained in one licence: EL1441 (under
control of Niuminco (ND) Ltd., before being separated into
different holdings and owners in 2018/2019).
|
All tenements are highly prospective for copper and gold and are
located in close proximity to the world-renowned Frieda River
Copper-Gold Project, with the district known for both porphyry and
high-sulphidation epithermal styles of mineralisation trending
along the Fiak Fault.
In relation to EL2603 (being the tenement subject to a
definitive agreement with Hardrock), the key prospects of Skiraisa,
Foya, Eserebe and Mountain Gate are situated along a 7 km long N-NW
trending structural corridor; exhibiting many attributes similar to
the extended mineralised system identified at the Frieda River
Copper-Gold Project (located 10 km to 15 km to the east).
Update on closing of the Acquisitions
The following provides an update on progress toward closing of
the definitive agreements, with reference to the June Release for
further particulars on the commercial terms agreed separately with
Hardrock and Niuminco.
Definitive Agreement with Hardrock
As agreed under the definitive option agreement between KRL,
Hardrock and its shareholders, KRL has an option to acquire
Hardrock by way of a series of option arrangements.
As an initial step, KRL agreed, at its expense, to complete a
field study and sampling programme at May River ("Study") to
increase confidence and understanding of the Project. On
completion of the Study, KRL has a right to exercise a first option
to acquire a 10% equity interest in Hardrock (for no further
consideration beyond the "in-kind" expenditure incurred to complete
the Study).
In collaboration with Hardrock, KRL reports positive progress
towards completion of the Study and is encouraged by initial trends
that have emerged. KRL expects to finalise the Study within
the coming weeks and will provide a further update in the near
future.
Definitive Agreement with Niuminco
As detailed in the June Release, KRL entered into a definitive
agreement with Niuminco and its related entities ("Niuminco
Agreement") to indirectly acquire EL2527 and historic data in
respect of the Project.
Under the Niuminco Agreement, a key condition precedent to
closing remains confirmation to KRL's satisfaction as to the "good
standing" of EL2527 (with Niuminco responsible for maintaining the
currency of such tenement). In this regard, Niuminco has
advised KRL that the PNG Minister for Mining has not consented to
Niuminco's request for an extension of EL2527. Niuminco
further advises that it has commenced steps to review this
decision; and that EL2527 remains on foot pending a further
determination.
The Niuminco Agreement has a sunset date of October 31, 2021 (or such further date as KRL may
agree at its absolute discretion) for closing and satisfaction of
conditions precedent (with Niuminco advising that it expects a
resolution prior to this time on securing an extension of
EL2527). KRL will continue to monitor any developments and
provide a further update in due course.
Qualified Person
The scientific and technical information disclosed in this
release has been reviewed and approved by Graeme Fleming, B. App. Sc., MAIG, an
independent "qualified person" as defined under National Instrument
43-101, Standards of Disclosure for Mineral Projects.
About KRL
KRL is an Asia-Pacific focused
gold mining company with two highly prospective gold projects, KRL
South and KRL North, in a premier mining region, the high-grade
Kainantu Gold District of PNG. Both of KRL's projects show
potential to host high-grade epithermal and porphyry
mineralisation, as seen elsewhere in the district. KRL has a highly
experienced board and management team with a proven track record of
working together in the region; and an established in-country
partner.
For further information please visit
https://kainanturesources.com/
Disclaimer and Forward-Looking Information
Mineralization hosted on adjacent and/or nearby properties is
not necessarily indicative of mineralization hosted on the
Company's property. The data disclosed in this release relating to
drilling results is historical in nature. Neither the Company nor a
qualified person has yet verified this data and therefore investors
should not place undue reliance on such data, and no representation
or warranty, express or implied, is made by the Company, its
affiliated companies, or any other person as to its fairness,
accuracy, completeness, or correctness. This release
contains forward-looking statements, which relate to future events
or future performance and reflect management's current expectations
and assumptions. Such forward-looking statements reflect
management's current beliefs and are based on assumptions made by
and information currently available to the Company. All statements,
other than statements of historical fact, are forward-looking
statements or information. Forward-looking statements or
information in this news release relate to, among other things:
expectations regarding completion of the Acquisitions, including
timing, the results of the Study and further exploration activities
on the Project, the valuation of Hardrock, receipt of necessary
regulatory approvals and the formulation of plans for drill
testing; and the success related to any future exploration or
development programs. These forward-looking statements and
information reflect the Company's current views with respect to
future events and are necessarily based upon a number of
assumptions that, while considered reasonable by the Company, are
inherently subject to significant operational, business, economic
and regulatory uncertainties and contingencies. These assumptions
include; success of the Company's projects; prices for gold
remaining as estimated; currency exchange rates remaining as
estimated; availability of funds for the Company's projects;
capital, decommissioning and reclamation estimates; prices for
energy inputs, labour, materials, supplies and services (including
transportation); no labour-related disruptions; no unplanned delays
or interruptions in scheduled construction and production; all
necessary permits, licenses and regulatory approvals are received
in a timely manner; and the ability to comply with environmental,
health and safety laws. The foregoing list of assumptions is not
exhaustive. The Company cautions the reader that
forward-looking statements and information involve known and
unknown risks, uncertainties and other factors that may cause
actual results and developments to differ materially from those
expressed or implied by such forward-looking statements or
information contained in this news release and the Company has made
assumptions and estimates based on or related to many of these
factors. Such factors include, without limitation: fluctuations in
gold prices; fluctuations in prices for energy inputs, labour,
materials, supplies and services (including transportation);
fluctuations in currency markets (such as the Canadian dollar
versus the U.S. dollar); operational risks and hazards inherent
with the business of mineral exploration; inadequate insurance, or
inability to obtain insurance, to cover these risks and hazards;
our ability to obtain all necessary permits, licenses and
regulatory approvals in a timely manner; changes in laws,
regulations and government practices, including environmental,
export and import laws and regulations; legal restrictions relating
to mineral exploration; increased competition in the mining
industry for equipment and qualified personnel; the availability of
additional capital; title matters and the additional risks
identified in our filings with Canadian securities regulators on
SEDAR in Canada (available at
www.sedar.com). Although the Company has attempted to identify
important factors that could cause actual results to differ
materially, there may be other factors that cause results not to be
as anticipated, estimated, described, or intended. Investors are
cautioned against undue reliance on forward-looking statements or
information. These forward-looking statements are made as of the
date hereof and, except as required under applicable securities
legislation, the Company does not assume any obligation to update
or revise them to reflect new events or circumstances.
Neither the TSX-V nor its Regulation Services Provider (as
that term is defined in the policies of the TSX-V) accepts
responsibility for the adequacy or accuracy of this
release.
SOURCE Kainantu Resources Ltd.