Puma Exploration Inc. (TSXV: PUMA, OTCQB: PUMXF) (the “Company” or
“Puma”) is pleased to announce the execution on October 23, 2024 of
a definitive option agreement (the “Option Agreement’) with KG
Exploration (Canada) Inc., a wholly-owned subsidiary of
Kinross Gold Corporation (TSX: K, NYSE: KGC)
(“Kinross”) with respect to the Williams Brook, Portage and Jonpol
properties (collectively, the “Williams Brook Project”) located in
Northern New Brunswick, Canada (see Figure 1).
Figure 1. Puma’s land holdings in
Northern New Brunswick
Under the terms of the Option Agreement, Kinross
will have, subject to certain conditions, the option to earn a
65% interest in the Project by funding a minimum
of $16,750,000 in exploration expenditures during
a period of five (5) years (including a firm commitment of
$2,000,000 with at least 5,000 metres of drilling during the first
18 months).
In connection with the Option Agreement,
Kinross has also agreed to subscribe under a concurrent
private placement for treasury common shares of the Company,
representing approximately 9.9% of its issued and outstanding
shares.
Puma’s President and CEO Marcel Robillard
stated, “We believe in the region’s potential to host Canada’s next
major gold camp. I am delighted to welcome Kinross, the first major
gold producer to establish a presence in New Brunswick. I look
forward to working with its first-in-class exploration and
development team to grow the region’s potential”. Most of the first
$2M will be directed towards drilling (5,000 metres) and other
identified targets on the Williams Brook property. The drilling
program will continue to test and define the Lynx Gold Zone
previously intersected by Puma (5.55 g/t Au over 50.15 m, 2.49 g/t
Au over 63.05 m, 5.15 g/t Au over 23.15 m, 2.77 g/t Au over 42.80
m, 1.24 g/t Au over 98.05 m, 3.97 g/t Au over 22.10 m, 3.12 g/t Au
over 35.35 m)”.
He also emphasized the financial benefits of the
agreement, “Within four (4) years and with only $12.75 M of
expenditures (as of May 31, 2024), Puma successfully defined a
high-grade gold zone at the Williams Brook property, the Lynx Gold
Zone that attracted a Tier One gold producer. With juniors still
struggling despite gold’s all-time high price, this significant
injection of cash over the next five years, especially
Kinross’s firm commitment over the next 18 months, will
significantly accelerate exploration and unlock the Project’s
value. Kinross’ commitment represents a stamp of approval on
Williams Brook’s potential, and having Puma as the operator speaks
to Kinross’ confidence in the strength of our exploration
team.”
Under the Option Agreement, Puma will act as the
Operator and will be assisted by a technical committee comprised of
two (2) representatives of each company. The Option Agreement
confirms Kinross’s trust in Puma’s expertise and skill in driving
exploration forward. As Operator, Puma will also receive management
fees that will contribute directly to Puma’s treasury.
Option Agreement Highlights
To earn a 65% interest in the Project, Kinross will have to fund
$16.75M in exploration expenditures as follows:
- $2.0 M in the first 18 months with a commitment for 5,000
metres of drilling (Firm Commitment);
- $3.0 M in the second year;
- $3.0M in the third year;
- $4.0M in the fourth year; and
- $4.75M in the fifth year.
As Operator, Puma will receive management fees
on an annual basis equal to 10% of annual expenditures until a
cumulative amount of $1,000,000 has been incurred, and (ii) 5% of
annual expenditures for any expenditures in excess of such
cumulative amount of $1,000,000.
Upon exercise of the option, Kinross and Puma
will form a joint venture on an initial basis of 65% for Kinross
and 35% for Puma. Both companies will have to contribute in
accordance with their respecting participating interest or be
diluted under a customary dilution clause. Under certain
circumstances, including if a participant’s interest in the joint
venture is diluted to ten percent (10%) or less, its interest will
automatically convert to a 2% net smelter returns (NSR) royalty,
half of which (1%) can be purchased for US$1,500,000.
Concurrent Private Placement of
$1,011,473.47
As part of the Option Agreement, Kinross has
agreed to subscribe under a non-brokered private placement for
16,857,891 treasury common shares of the Company at a price
of $0.06 per share for aggregate gross proceeds
of $1,011,473.47 (the “Offering”). The net proceeds of the
Offering will be used by the Company to explore its other projects
and for general corporate and working capital purposes.
Puma and Kinross have also agreed on the terms
of an investor rights agreement (the “IRA”), pursuant to which,
among other things, Kinross will be granted on the closing date of
the Offering the right to participate in future equity financings
in order to maintain its ownership percentage in the Company or
acquire up to 19.9% of the total of common shares of the Company
issued and outstanding after issuance of new securities.
The Option Agreement and Private Placement were
negotiated at arms’ length, and there were no finder’s fees
associated therewith. Closing of both the Option Agreement and the
Offering remains subject to certain closing conditions, including
the approval of the TSX Venture Exchange. All securities issued
under the Offering will have a statutory hold period of four months
and one day.
The transaction with Kinross is aligned with the
Company's DEAR business model of Discovery,
Exploration, Acquisition and
Royalties to generate maximum value for
shareholders with low share dilution. The Company expects to
release news regarding its short to medium-term strategy for its
other 100% held properties in the coming weeks.
Qualified Person
The content of this press release was prepared
by Marcel Robillard, President and Dominique Gagné, P.Geo.,
qualified persons as defined by NI 43-101, who supervised the
preparation of technical information that forms part of this news
release.
About Puma’s Assets in New
Brunswick
Puma has accumulated an impressive portfolio of
prospective gold landholdings in Northern New Brunswick – the
Williams Brook, JonPol, Portage, TIMM and Jacquet River properties.
They are all located near the Rocky Brook Millstream Fault
(“RBMF”), a major regional structure formed during the Appalachian
Orogeny and a significant control for gold deposition in the
region. Puma’s work to date has focused on the Williams Brook
property, but prospecting and surface exploration work on the other
properties have confirmed their potential for significant gold
mineralization. Puma retains its 100% interest in the TIMM and
Jacquet River properties and will continue to advance their
development.
About Puma Exploration
Puma Exploration is a Canadian-based mineral
exploration company with precious metals projects in New Brunswick,
near Canada's Famous Bathurst Mining Camp. Puma has a long history
in Northern New Brunswick, having worked on regional projects for
over 15 years. Puma’s successful exploration methodology, which
combines old prospecting methods with detailed trenching and
up-to-date technology such as Artificial Intelligence, has been
instrumental in facilitating an understanding of the geology and
associated mineralized systems in the region. Armed with
geophysical surveys, geochemical data and consultants’ expertise,
Puma has developed a perfect low-cost exploration tool to discover
gold at shallow depths and maximize drilling results.
Connect with us on Facebook / X/ LinkedIn.Visit
www.explorationpuma.com for more information or contact:
Marcel Robillard, President and
CEO. (418) 750-8510; president@explorationpuma.com
Mia Boiridy, Head of Investor Relations and
Corporate Development. (250) 575-3305;
mboiridy@explorationpuma.com
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.
Forward-Looking Statements: This press release
may contain forward-looking statements. Such forward-looking
statements involve several known and unknown risks, uncertainties,
and other factors that may cause the actual results, performance,
or achievements of Puma to be materially different from actual
future results and achievements expressed or implied by such
forward-looking statements. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date the statements were made, except as required by
law. Puma undertakes no obligation to publicly update or revise any
forward-looking statements. The quarterly and annual reports and
the documents submitted to the securities administration describe
these risks and uncertainties.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/bfb62025-70de-4c6a-b9e0-754a207cde17
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