VANCOUVER, March 18, 2020 /CNW/ - Southern Empire
Resources Corp. ("Southern Empire"; TSX-V: SMP), formerly Owl
Capital Corp. (TSX-V: OCC.P) is pleased to announce that it has
closed its previously announced Capital Pool Company ("CPC")
Qualifying Transaction by acquiring a 75% interest in the Oro Cruz
Gold Project located in California, an 85% interest in the Eastgate
Gold Project located in Nevada,
USA and a 4.93% undiluted equity interest in Bullfrog Gold
Corp. ("Bullfrog"), an exploration stage company listed on the
Canadian Securities Exchange and OTC Markets, collectively, the
"Gold Assets".
Highlights
- Southern Empire completes $3.27
million oversubscribed, non-brokered private placement
- Two gold projects with historical gold production and
significant exploration potential acquired in the southwestern
United States
- Trading to commence at the open of markets on Tuesday, March 24, 2020 - TSX-V: SMP
As a result of closing the CPC Qualifying Transaction, Owl
Capital Corp. has changed its name to Southern Empire Resources
Corp. and will be listed as a Tier 2 mining issuer on the TSX
Venture Exchange, with the trading symbol "SMP", at the open of
markets on Tuesday, March 24,
2020.
Terms of the Qualifying Transaction
Southern Empire acquired the Gold Assets pursuant to the terms
of an asset purchase agreement with Eros Resources Corp. ("Eros")
and Demerara Gold Corp. ("Demerara"), together, the
"Vendors". In consideration of the Gold Assets acquired from
the Vendors, Southern Empire issued a total of 25,426,940 common
shares as follows:
(a) 2,579,000 shares to the shareholders of Demerara with
respect to the acquisition of a 40% interest in the Eastgate Gold
Project;
(b) 2,901,275 shares to Eros with respect to the
acquisition of a 45% interest in the Eastgate Gold Project;
(c) 8,545,000 shares to the shareholders of Demerara and
8,545,000 shares to be issued to Eros with respect to the
acquisition of an exclusive option to acquire an aggregate 75%
interest in the Oro Cruz Gold Project;
(d) 2,856,665 shares to Eros with respect to the
acquisition of 8,750,000 shares and 7,750,000 share purchase
warrants in the capital of Bullfrog.
All of these shares will be subject to the escrow requirements
set forth in TSX Venture Exchange Policy 5.4 – Escrow, Vendor
Consideration and Resale Restrictions whereby 10% of the
escrowed shares will be released on the initial listing date and
15% of the escrowed shares will be released each six month period
thereafter.
Non-Brokered Private Placement Financing
In conjunction with closing the transaction, Southern Empire has
completed an oversubscribed, non-brokered private placement
financing of 10,911,197 common shares (each a "Share") at a price
of $0.30 per Share for gross proceeds
of $3,273,359 (the "Offering"). These
securities will be subject to a hold period expiring on
July 14, 2020 pursuant to applicable
Canadian securities laws and the rules of the TSX Venture
Exchange.
The proceeds of the Offering will be used for exploration work
on the Oro Cruz Gold Project and general working capital
purposes.
Appointment of New Directors and Officers
As of the closing of the Qualifying Transaction, the existing
board of directors and officers have resigned, except for
James Hutton. Southern Empire's new
board of directors will be Ronald
Netolitzky, who has been appointed to act as Chairman,
James Hutton, Bryan Slusarchuk, James
Currie, Latika Prasad and
Dale Wallster, who will also serve
as Chief Executive Officer. Andrew
Davidson will serve as Chief Financial Officer and Secretary
and David Tupper as Vice President -
Exploration.
Stock Option Grants
Southern Empire has granted a total of 4,250,000 stock options
to its directors, officers, employees and consultants. The stock
options have a five-year term, are exercisable at $0.30 per share and will vest immediately.
Proposed Escrow Transfers
Southern Empire also announces that Eros has agreed to sell a
total of 5,000,000 escrowed common shares of Southern Empire to
James Hutton, Bryan Slusarchuk, Latika
Prasad and Dale
Wallster. These purchases will be subject to TSX
Venture Exchange Policy 5.4 – Escrow, Vendor Consideration and
Resale Restrictions.
Further, Mr. Hutton has agreed to sell a total of 2,000,000 CPC
escrowed common shares to Bryan
Slusarchuk and Latika Prasad.
Mr. Hutton will also purchase 820,000 CPC escrowed common shares
from arm's length shareholders.
The Oro Cruz Gold Project
The Oro Cruz Gold Project is in the Cargo Muchacho Mountains of
Imperial County, southeast
California, approximately 25
kilometres (15.5 miles) northwest of Yuma, Arizona.
The Oro Cruz mine (also historically known as the Golden Cross
or Tumco mine), is situated on the property approximately 14 miles
southeast of the currently operating Mesquite gold mine of Equinox
Gold Corp, and is a former gold ("Au") producer within the
historical Cargo Muchacho - Tumco Mining District.
Historical gold mining on the Oro Cruz Property occurred during
1890-1916 and 1932-1941, producing greater than 150,000 troy ounces
gold. The Oro Cruz Property was last mined for about one year
during 1995 and 1996 by the American Girl Mining Joint Venture (the
"AGMJV"); operated and 53%-owned by MK Gold Company, a subsidiary
of Morrison Knudsen Corporation. Gold production was approximately
61,000 troy oz from oxide material extracted by both open pit and
underground mining operations, before the mine closed due to low
gold prices.
Extensive historical drilling at the Oro Cruz Gold Project has
outlined exploration targets over an existing high-grade gold zone
as well as nearby satellite deposits. Based on historical mining,
the oxide gold mineralization at the Oro Cruz Gold Project is
amenable to conventional heap leach extractive methods.
In 2011, Lincoln Mining Corporation reported a historical
inferred resource estimate totaling 341,800 ounces gold based on
4,386,000 tonnes averaging 2.20 grams gold per tonne at a cutoff
grade of 0.68 g Au/t (4,835,000 tons at 0.07 ounces gold per ton;
"oz Au/ton").
This historical inferred resource estimate is disclosed in a
technical report dated April 29, 2011
prepared for Lincoln Mining Corporation by Tetra Tech Inc. and is
available on SEDAR. The historical mineral resource estimate,
termed "inferred mineral resource", which is a category set out in
NI 43-101, was based on previous drill hole, underground channel
samples and blasthole assays, and calculated using ordinary kriging
to estimate gold grades in 10 foot x 10 foot x 5 foot blocks.
Accordingly, Southern Empire considers this historical estimate
reliable as well as relevant as it represents key targets for
future exploration work. The Qualified Person of the Oro Cruz
Technical Report has not done sufficient work to classify the
historical estimate as a current mineral resource and Southern
Empire is not treating this historical estimate as current mineral
resources.
The Oro Cruz Gold Project is currently comprised of a total of
271 Bureau of Land Management unpatented lode mining claims
totaling roughly 2,160 hectares ("ha"; 5,338 acres), 13 BLM
unpatented placer mining claims totaling roughly 105 ha (260 acres)
and two State of California Mineral Prospecting Permits covering
approximately 518 ha (1,280 acres) all located in Imperial County, California and subject to
survey location related to the San Bernardino Base Line and
Principal Median.
The original 20 unpatented lode claims covering the Oro Cruz
mine are held pursuant to a third-party agreement. Adjacent to the
Oro Cruz Gold Project are the past-producing American Girl and
Padre y Madre gold mines that were operated from 1988 through 1996
by the AGMJV.
The Eastgate Gold Project
The Eastgate Gold Project is located approximately 90 kilometers
(55 miles) east of the city of Fallon in Churchill
County, Nevada and comprises 101 unpatented BLM lode mining
claims covering roughly 817 ha (2,020 acres). Eastgate features a
well-developed hydrothermal quartz vein system hosting precious
metals, and Southern Empire's goal is to define a high-grade, low-
sulphidation epithermal gold-silver deposit. Multiple, steeply east
dipping, north striking, sub-parallel quartz-adularia veins occur
throughout the Eastgate Property. Between 1908-20 and 1935-57,
several small-scale, narrow vein, gold and silver producers
operated on the property. These included the Double Eagle and Gold
Ledge mines which reported historical production from 1935-57 of
3,247 oz gold and 38,152 oz silver.
Securities of Bullfrog Gold Corp.
As part of Southern Empire's plan to acquire an interest,
directly or indirectly, in gold assets in California and Nevada, it has acquired, from Eros,
8,750,000 shares and 7,750,000 share purchase warrants in the
capital of Bullfrog, which is incorporated in the state of
Delaware with its shares quoted on
the OTCQB board of the OTC Market Platform and on the CSE. Bullfrog
owns, leases and options various unpatented and patented claims
that comprise the gold-focused Bullfrog Project near Beatty in Nye
County, Nevada. At this stage, the securities of Bullfrog
will be a non-core asset of Southern Empire.
Qualified Person
David Tupper, P.Geo., is a
qualified person within the context of National Instrument 43-101
Standards of Disclosure for Mineral Projects and has
prepared, read and approved the technical aspects of this news
release.
On behalf of the Board of Directors,
Dale Wallster, CEO and
Director
Southern Empire Resources Corp.
Cautionary Notice on 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. Southern Empire cautions that
all forward looking statements are inherently uncertain and that
actual performance may be affected by a number of material factors,
many of which are beyond Southern empire's control. Such factors
include, among other things: risks and uncertainties relating to
Southern Empire's limited operating history 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, Southern Empire
undertakes no obligation 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 TSX
VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS RELEASE.
SOURCE Southern Empire Resources Corp.