VANCOUVER, BC, April 3,
2023 /CNW/ - Kainantu Resources Ltd. (TSXV: KRL)
(FSE: 6J0) ("KRL" or the "Company"), the Asia-Pacific focussed gold mining company, is
pleased to announce that it has agreed to terms for the acquisition
(the "Acquisition") of the remaining 90% interest in the May River
Project (the "Project") from the Hardrock Limited ("Hardrock")
vendors.
Further to the announcement of February
15, 2023, KRL has completed negotiations with Hardrock
on terms favourable to all parties under a Share Sale Agreement
(the "Agreement"), whereby KRL will issue shares in consideration
for acquiring 90% of the Project (the "Shares"). KRL already
holds the other 10% of the Project.
Key Terms of the
Agreement:
- KRL will acquire the remaining 90% interest in the Hardrock,
bringing KRL's total ownership to 100%, subject only to final
approval by the TSX-V;
- Holding 100% of the Project achieves a key milestone for KRL,
with the Company having full ownership and control of this highly
prospective copper-gold project;
- Under the Agreement, KRL will issue script consideration of 18
million common shares representing a value of C$1,440,000, based on the closing market price of
KRL shares on March 31, 2023;
- On a post completion basis this represents an approximate 17.7%
interest in the Company (or 4.4% for each Hardrock
shareholder);
- The Shares will be held in equal allotments by the four (4)
shareholders of Hardrock, each holding will be independent of each
other. No shareholders from Hardrock will become insiders as a
result of the transaction;
- The Shares are issued subject to a statutory hold period of
four (4) months and a day, in accordance with applicable securities
law;
- In addition, the Shares are subject to a voluntary escrow of
twelve (12) months for half the shares and twenty-four (24) months
for the remaining shares;
- The original Option Agreement between the Company and Hardrock
has been entirely replaced by the Agreement; and
- Closing and issue of the Shares is imminent, pending final
approval by the TSX-V.
Matthew Salthouse, CEO of KRL, commented:
"We are delighted to announce the full Project acquisition,
which will result in the 100% ownership of this highly prospective
copper-gold asset. Our work to date and historical results
from the Project have proven the value and confirm the Project's
potential. We would like to thank the Hardrock vendors for
their cooperation during our strategic partnership phase and
welcome them as shareholders of the Company."
Intrinsic Value of the Project
The Project is highly prospective for gold and copper, laying
adjacent to the Frieda River Project (being one of the world's
largest undeveloped copper mines). Since entering into an
agreement with Hardrock in 2021, KRL has acted as manager and
conducted further studies at the Mountain Gate and Skiraisa
Prospects. These studies have supported the Company's view on
the high potential of the overall Project. Further details of
the Project are contained in earlier announcements on June 15, 2021 and September 21, 2021 (in addition to the
announcement noted above).
In relation to the acquisition, the Company views the price of
C$1,440,000 as representing fair
value for the remaining 90% interest in Hardrock. This values
Hardrock at C$1,600,000 million with
the overall size of the tenement package of 890 km², this equates
to a price of C$1,798 per km².
By comparison, the acquisition of the Company's KRL North and
KRL South projects in 2020 (as part of the CPC listing onto the
TSX-V) implied a price of C$6,347 per
km². This was supported by a review of comparable
transactions at this time in PNG (Report Link). No further
comparable transactions have been identified since this
time.
Since the CPC listing, the price of copper has appreciated by
approximately 16.5%, with current prices of $4.09 per pound. Gold prices have also
increased by approximately 7.7%, with current prices of
$1,980 per ounce. Given the
price increases in both commodities, the Company believes the price
per km² is well supported and reasonable for the Acquisition.
May River Copper-Gold Project
Summary
Located less than 10km west of Frieda
River, the May River asset has several highly prospective
targets that KRL aims to explore in short term. Key Project
prospects (Skiraisa, Foya, Eserebe, Mountain Gate and Iku Hill) are situated along a 7km long N-NW
trending structural corridor, exhibiting many attributes similar to
the extended mineralised system identified at the Frieda River
Project (between 10 and 15km to the east);
Soil, rock chip and channel anomalies indicate the existence of
porphyry style Copper-Gold mineralisation in addition to near
surface structurally controlled and breccia-hosted epithermal gold
veins and breccias. Previous drilling at the Skiraisa
prospect has demonstrated significant gold potential: 54m at 1.83g/t Au; 109m at 1.53g/t Au and 96m at 0.89g/t Au. Copper-in-soil anomalies of
>2.5% (2,500ppm) have been reported from several areas at the
Mountain Gate prospect;
More information about May River project can be accessed
here.
About Kainantu
Resources (KRL)
Kainantu Resources ("KRL") is an Asia-Pacific focussed gold mining company with
three highly prospective gold and copper projects, KRL South, KRL
North and the May River Project. All projects are located in
premier mining regions in PNG. Both KRL North and KRL South show
potential to host high-grade epithermal and porphyry
mineralization, as seen elsewhere in the high-grade Kainantu Gold
District. The May River project is in close proximity to the
world-renowned Frieda River Copper-Gold Project, with historical
drilling indicating the potential for significant copper-gold
projects. 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. KRL recently executed an
agreement to acquire the Kili Teke project in the western highlands
of PNG.
Kainantu Resources
Matthew Salthouse, Chief
Executive Officer (Tel: + 65
8318 8125)
Callum Jones, Corporate
Development Co-ordinator (Tel: + 61 450 969
697)
Email: info@krl.com.sg
Investor Relations (Jemini Capital)
Kevin Shum
Tel: +1 212 219 4670 (702)
Email: kevin@jeminicapital.com
Disclaimer and Forward-Looking Information
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.
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: 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.
SOURCE Kainantu Resources Ltd.