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iCrowdNewswire Jan 20, 2021 7:44 AM ET

Silver Mountain Mines Enters Into Letter of Intent with Nevgold Corp. For a Proposed Reverse Takeover


Silver Mountain Mines Enters Into Letter of Intent with Nevgold Corp. For a Proposed Reverse Takeover

iCrowd Newswire - Jan 20, 2021

Silver Mountain Mines Ltd. announces that it has entered a non-binding Letter of Intent (the “LOI”) dated January 13, 2021 with Nevgold Corp. (“Nevgold”) with respect to a proposed transaction (the “Proposed Transaction”) whereby Silver Mountain will acquire all of the issued and outstanding common shares in the capital of Nevgold (the “Nevgold Shares”). Nevgold is a private British Columbia company which holds the right to acquire the Limousine Butte and Cedar Wash Projects in Nevada (the “Properties”) from McEwen Mining Inc..

The Proposed Transaction will constitute an arm’s length reverse take-over pursuant to the policies of the TSX Venture Exchange (the “TSXV”), and following the Proposed Transaction, it is anticipated that the Company will be a Tier 2 Mining Issuer on the TSXV.

Proposed Transaction Summary
Pursuant to the Proposed Transaction, the Company will acquire all of the issued and outstanding Nevgold Shares from the holders thereof in exchange for common shares (“Resulting Issuer Shares”) of the Company (thereafter, the “Resulting Issuer”) on the basis of one Resulting Issuer Share for each Nevgold Share. This will result in the issuance of up to 25,000,000 Resulting Issuer Shares to shareholders of Nevgold, exclusive of securities issued in connection with the Concurrent Financing (as defined below). Certain of the Resulting Issuer Shares will be subject to escrow and resale restrictions pursuant to the policies of the TSXV.

It is anticipated that prior to the closing of the Proposed Transaction, Nevgold will complete a private placement (the “Concurrent Financing”) of subscription receipts of Nevgold (each, a “Subscription Receipt”) for aggregate gross proceeds of up to C$5,000,000, at a price per Subscription Receipt to be determined in the context of the market. Each Subscription Receipt will entitle the holder thereof to automatically receive, upon satisfaction of certain escrow release conditions, one Nevgold Share, which shall immediately be exchanged for Resulting Issuer Shares upon completion of the Proposed Transaction. Nevgold intends to use the proceeds of the Concurrent Financing for exploration and development of the Properties and for working capital and general corporate purposes. Nevgold may pay a finder’s fee in cash or securities to certain arm’s length finders in connection with the Concurrent Financing.

The Proposed Transaction is subject to a number of terms and conditions, including, but not limited to:

  1. Nevgold having prepared a technical report in accordance with the requirements of National Instrument (“NI”) 43-101 in respect of the Properties;
  2. All financial statements of Nevgold having been prepared;
  3. As at the closing of the Proposed Transaction, the Company will have no payables (less cash) other than ordinary course trade payables not to exceed an agreed upon amount;
  4. Any obligations of the Company associated with the Proposed Transaction shall have been settled;
  5. Completion of the Concurrent Financing and receipt of proceeds thereunder;
  6. Approval of the TSXV in respect of the Proposed Transaction and the Resulting Issuer meeting the applicable minimum listing requirements of the TSXV;
  7. Approval of the shareholders of Nevgold and the Company to the Proposed Transaction;
  8. Execution of a definitive agreement in respect of the Proposed Transaction (the “Definitive Agreement”);
  9. Completion of mutual due diligence; and
  10. Receipt of any required third party consents.

It is currently anticipated that the Proposed Transaction will close on or before early Q2-2021.

Trading in common shares of the Company will remain halted until the resumption of trading is approved by the TSXV in connection with the completion of the Proposed Transaction. Further details concerning the Proposed Transaction and other matters will be announced if and when a Definitive Agreement is executed.

In connection with completion of the Acquisition, it is anticipated that the Company will change its name to “Nevgold Corp.” and will adopt the ticker symbol “NAU”.

Information Concerning Nevgold Corp.  
Nevgold is a private company incorporated under the Business Corporations Act (British Columbia) (the “BCBCA”).

Nevgold entered into an asset purchase and sale agreement dated December 14, 2020 (the “Asset Purchase Agreement”) with McEwen and certain of McEwen’s affiliates (collectively, the “Vendors”) pursuant to which Nevgold has agreed to acquire the Properties from the Vendors immediately prior to or concurrently with the Proposed Transaction (the “Closing Date”), subject to Nevgold completing the following:

The Asset Purchase Agreement is subject to a number of conditions, including without limitation, Nevgold completing the Concurrent Financing to raise gross proceeds of at least C$2,500,000, and the Resulting Issuer entering into an investor rights agreement with McEwen pursuant to which McEwen will have a pro-rata participation right in any future equity financings of the Resulting Issuer as long as they hold at least 5% of the issued and outstanding Resulting Issuers Shares.

Asset Information – Limousine Butte
Limousine Butte is a past producing, Carlin-type gold district in Ely, Nevada consisting of 821 unpatented mining claims on federal Bureau of Land Management (“BLM”) land covering approximately 66.5 square kilometers. The property covers a large hydrothermal gold system that exhibits alteration features indicative of sediment and structurally hosted gold deposits found on the Carlin Trend and elsewhere in Nevada. Gold is predominately associated with hydrothermal alteration of carbonate host rocks including extensive jasperiod development. Gold mineralization is known to occur along a roughly 20-kilometer northeast-southwest trending fault structure with cross-cutting northwest trending fault intersections.

Historical production from 1987-1989 by Alta Gold Corp. was approximately 91,000 ounces of near-surface oxide gold at the Golden Butte mine. Historical work that would cost over US$45 million to replicate today includes over 900 drill holes and 120,000 meters of both reverse circulation (“RC”) and core drilled by previous operators and other geophysical and geochemical studies. The project has a mineral resource estimate stated by McEwen (“McEwen Estimate”) of Measured & Indicated of 241,000 ounces of gold at 0.78 grams per tonne gold (9.6Mt) [Measured of 168,000 ounces of gold at 0.89 grams per tonne gold (5.9Mt), Indicated of 73,000 ounces of gold at 0.61 grams per tonne gold (3.7Mt)], and Inferred of 51,000 ounces of gold at 0.70 grams per tonne gold (2.2Mt).

The foregoing categories comply with the Canadian Mineral Resource and Reserve Definitions as published by the Canadian Institute of Mining, Metallurgy and Petroleum, in effect as at the date of the McEwen Estimate. The McEwen Estimate incorporated three of the more advanced gold targets within the large land package, and was disclosed in NI 43-101 Technical Report for the Limousine Butte Project, White Pine County, Nevada prepared by Telesto Nevada Inc. as of July 1, 2009 for US Gold Corporation. While the McEwen Estimate is considered reliable, and relevant to portions of the Limousine Butte property, there is significant subsequent drilling and other historical work that will be incorporated to prepare a current mineral resource estimate. A qualified person has not done sufficient work to classify the McEwen Estimate as current, and the Company is not treating the McEwen Estimate as current mineral resources.

Nevgold has commenced an updated NI 43-101 Technical Report for Limousine Butte to re-interpret the historical work and provide an updated resource estimate that will incorporate all historical drilling completed since the previous resource statement in 2009. The updated NI 43-101 Technical Report is expected to be completed in the next thirty days and the information will be included in the final transaction documents.

In addition to the areas covered by the McEwen Estimate, there are multiple defined targets along the 20-kilometer northeast-southwest trend with previous geochemical sampling, geophysical surveys, and limited drilling. The Resulting Issuer plans to focus significant resources on drilling these untested areas once the acquisition is complete.

Highlighted drill intercepts include:

Hole ID   From (m) To (m) Length(m) Au g/t
BPD-2   35.05 86.87 51.82 3.31
BPD-2 inc. 38.10 41.15 3.05 6.62
BPD-2 inc. 47.24 54.86 7.62 4.16
BPD-2 inc. 60.96 86.87 25.91 4.01
BDD-4   9.14 24.08 14.94 4.78
BDD-4 inc. 12.19 22.25 10.06 6.63
BDD-5   37.95 53.95 16.00 1.13
BDD-5   58.83 87.17 28.35 1.34
BDD-5 inc. 65.23 71.93 6.71 1.95
BDD-5 inc. 73.46 76.20 2.74 1.63
BDD-5 inc. 80.77 87.17 6.40 1.70
BDR-9   28.96 85.34 56.39 5.02
BDR-9 inc. 35.05 54.86 19.81 12.70
BDR-9 inc. 73.15 83.82 10.67 2.15
LB023   44.20 56.39 12.19 6.79
LB023 inc. 44.20 48.77 4.57 8.04
LB023 inc. 50.29 54.86 4.57 9.53
LB080   228.60 274.32 45.72 2.06
LB080 inc. 252.98 274.32 21.34 2.77
LB084   224.03 251.46 27.43 1.49
LB084 inc. 236.22 242.32 6.10 1.87
LB084   245.36 251.46 6.10 2.00
LB119   170.69 204.22 33.53 1.67
LB119 inc. 170.69 182.88 12.19 2.44
LB119 inc. 192.02 202.69 10.67 2.23
LB120   216.41 230.12 13.72 2.01
LB120 inc. 217.93 222.50 4.57 4.50
LB120   236.22 254.51 18.29 2.10
LB120 inc. 240.79 246.89 6.10 2.97
LB120 inc. 249.94 252.98 3.05 4.95
LB121   249.94 275.84 25.91 3.86
LB121 inc. 249.94 259.08 9.14 4.08
LB121 inc. 263.65 275.84 12.19 5.00
LB122   249.94 262.13 12.19 4.85
LB122 inc. 251.46 259.08 7.62 7.72
LIM-45   22.86 36.58 13.72 3.24

Averages are calculated on intervals greater than 1.0 g/t Au. The above assays are from the assay database provided by McEwen. The QAQC procedures are being reviewed as part of the updated Technical Report.

Asset Information – Cedar Wash
Cedar Wash consists of 239 unpatented mining claims on federal BLM land covering approximately 19.3 square kilometers located in Lincoln County, Nevada. The project was a grassroots exploration discovery made by McEwen’s Exploration Group in 2016. Surface reconnaissance geology has been completed on parts of the land package including soil and rock chip sampling, which identified an extensive gold soil trend spanning over 2 kilometers. The project was drilled in 2016 and 2017 with approximately 7,000 meters of RC drilling completed. Drill results in the shallow RC holes showed positive signs of mineralization and will be followed up on by the Resulting Issuer.

The project is located approximately 20 kilometers from Liberty Gold’s Goldstrike Project in Utah and has similar geological characteristics.

Initial work at Cedar Wash will focus on completing all surface reconnaissance geology in the first half of 2021, followed by drill testing the identified targets within the large, consolidated land package in the second half of the year.

Management and Board of Directors of the Company on Completion of the Proposed Transaction
Upon closing of the Proposed Transaction, the Management and Board of Directors of the Resulting Issuer is expected to consist of Giulio Bonifacio, Brandon Bonifacio, Victor Bradley, Greg French, Tim Dyhr, Steve Konopelky, and Morgan Hay.

Name Past Experience
Giulio T. Bonifacio
Vancouver, BC
Mr. Giulio Bonifacio is a Chartered Professional Accountant with over 35 years of experience in senior executive roles in the mining industry. Mr. Bonifacio is the Founder and former Director, President & CEO of Nevada Copper Corp. since its inception in 2005 until his retirement in 2018. Among his many accomplishments Mr. Bonifacio has raised over $700 million through equity and project debt financings as well as being involved in corporate transactions aggregating in excess of a billion dollars. Mr. Bonifacio has led and directed efforts at every stage of development including exploration, engineering, permitting, and construction.
Brandon Bonifacio
Vancouver, BC 
Mr. Brandon Bonifacio is a mining executive with over 10 years of experience in project development, mergers and acquisitions, and project evaluations. Mr. Bonifacio was most recently the Finance Director of the Norte Abierto Joint Venture (Cerro Casale/Caspiche) in the Maricunga Region, Chile and a member of the Corporate Development team at Goldcorp Inc. (now Newmont Corporation). Mr. Bonifacio holds a MASc – Mining Engineering and MBA from the University of Nevada, Reno and a Bachelor of Commerce – Finance from the University of British Columbia.
Victor Bradley
Monte Carlo, Monaco

Mr. Bradley is a Chartered Professional Accountant with more than 50 years of experience in the mining industry. Over the past 30 years he has founded, financed, and operated several mining and advanced stage exploration and development companies including the original Yamana Gold Inc., Aura Minerals Inc., and Nevoro Inc. (sold to Starfield Resources). Mr. Bradley founded the original Yamana in 1994 and served as President and CEO, and subsequently Chairman of the Board and Lead Director until 2008. He served as Chairman of Osisko Mining Corp. from 2006 until its sale for $4.1 billion to Agnico Eagle and Yamana in 2014. He served as a director of Osisko Gold Royalties Ltd. from 2014 to 2018 and as Chairman of Nevada Copper Corp. from 2012 to 2017. He now serves as Chairman of Osisko Bermuda Ltd., Chairman of BTU Metals Corp., and Director of PJX Resources Inc.
Greg French
Reno, NV
Mr. French is a geologist with over 35 years of exploration experience in Western USA and Canada. His current role is VP, Head of Exploration, at Nevada Copper Corp. where he has been responsible for every stage of development from exploration to production since 2006. His prior roles include various capacities for Homestake Mining Inc., Atlas Precious Metals, and Cornerstone Industrial Minerals. Mr. French has a Nevada gold discovery to his credit and extensive project development experience including two projects taken through feasibility and into production.
Tim Dyhr
Tucson, AZ
Mr. Dyhr has over 35 years of experience in mining with expertise in environmental, permitting, and government relations in the United States. His current role is VP, External and Government Relations, at Nevada Copper Corp. where his most recent achievement was directing the successful permitting of Nevada Copper’s Pumpkin Hollow Project in Yerington, Nevada which is now in production. His prior roles include managing the initial permitting of Magma Copper’s Robinson Mine near Ely, Nevada, Chairman of the Nevada Mining Association from 2017-2018, and other various senior capacities with multinational mining companies including Magma Copper and BHP Copper.
Steve Konopelky
Calgary, AB
Mr. Konopelky has spent the last 25 years developing a broad range of experience in building start-up companies, effectively streamlining financials, raising capital, and leading operational initiatives across various industries. He is currently the President & CEO of ELM Inc. a leading environment liability management company which supports the mining industry. He is also the founder, and current Director, President & CEO of Silver Mountain Mines Inc.
Morgan Hay
Vancouver, BC
Mr. Hay is a partner of Maxis Law Corporation, a Vancouver-based securities and corporate finance law firm. Since 2007 he has been advising companies listed on Canadian stock exchanges, principally in the natural resources sector, and has expertise in corporate finance, mergers and acquisitions, and corporate governance.

Exact management and board roles of the Resulting Issuer will be further disclosed as the Proposed Transaction progresses to closing.

Shareholder Approvals
The Company and Nevgold intend to seek shareholder approval for the Proposed Transaction and related matters as, and to the extent, required in accordance with the policies of the TSXV and applicable corporate and securities laws.

Sponsorship
The Company also intends to apply for a waiver from the requirement to obtain a Sponsor (as defined in the policies of the TSXV) for the Proposed Transaction, however, there can be no assurance that a waiver will be obtained. If a waiver from the sponsorship requirement is not obtained, a Sponsor will be identified at a later date. An agreement to act as Sponsor in respect of the Proposed Transaction should not be construed as any assurance with respect to the merits of the Proposed Transaction or the likelihood of its completion.

About Silver Mountain Mines Inc. Silver Mountain Mines Inc. is a Canadian based exploration and development company with 100% ownership of a 9,300 hectare property centered on the historical silver rich Ptarmigan Mine in south eastern, British Columbia. The property hosts two styles of mineralization: silver rich, high-grade polymetallic epithermal veins and manto style massive / semi-massive sulphide mineralization.

For further information on Silver Mountain Mines Inc. please visit the Company’s website http://www.silvermountainmines.com and SEDAR (www.sedar.com) or contact Mr. Steve Konopelky, Director of the Company.

Bill Fleshman FAus IMM(CP) 107342, Consulting Geologist, a qualified person as defined by National Instrument 43-101 has reviewed and approved the scientific and technical disclosure in this press release.

 

ON BEHALF OF THE BOARD
“Signed”
Vince Goegan
Chairman

Contact Information:

“Signed”
Vince Goegan
Chairman








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