Scorpio Gold Corporation (PK) News - SRCRF

SCORPIO GOLD ANNOUNCES OPTION AGREEMENT WITH TITAN MINING TO EARN 80% INTEREST IN THE MINERAL RIDGE PROPERTY FOR US$35M OF EXPENDITURES OR 100% FOR US$35M PAYMENT, AND RELATED C$5M EQUITY FINANCING

Vancouver, August 31, 2020 – Scorpio Gold Corporation (“Scorpio Gold” or the “Company”) (TSX-V: SGN) is pleased to announce, subject to TSX Venture Exchange approval, a part and parcel transaction whereby Scorpio Gold will raise C$5 million in equity and has granted an option to Titan Mining Corporation (“Titan”) to earn an 80% interest in the Mineral Ridge Property, located in Nevada, by spending US$35 million on exploration over five years. If Titan spends US$7 million of exploration expenditures on Mineral Ridge, it will also receive the right to acquire a 100% interest in Mineral Ridge by making a cash payment to Scorpio Gold of US$35 million on or before December 31, 2022.

Brian Lock, CEO, comments “The Titan agreement provides a direct opportunity to build on the substantial value of the Mineral Ridge Property that was outlined in the 2018 updated feasibility study. Titan has stated their intention to immediately commence a comprehensive drilling campaign that will focus on the down-dip and strike extensions of the existing deposits and systematically test seven other high-priority exploration targets. This will be the first wide-ranging exploration drill program conducted on the nearly 14,000 acre Mineral Ridge Property in the history of Scorpio Gold’s tenure. With Titan advancing Mineral Ridge, Scorpio Gold will have the opportunity to focus on its Goldwedge Property, including advancing its toll milling operations and furthering its exploration programs on the Goldwedge and Keystone-Jumbo deposit areas. The coming months look to be very active and promising for Scorpio Gold.”

Titan Option Agreement (the “Agreement”)

Terms of the Agreement require Titan to spend US$35 million in staged expenditures over a period of five years (the “Option Term”) to earn an 80% ownership interest (the “Earn-in Option”) in Mineral Ridge Gold LLC (“MRG”), an indirect subsidiary of Scorpio Gold which holds all of the mineral rights and water rights comprising the Mineral Ridge Property. In order to maintain the Earn-In Option in good standing, Titan must incur expenditures of US$7 million on or before January 1, 2022, then a further US$7 million on each of the third, fourth and fifth anniversaries of the commencement of the effectiveness of the Earn-In Option. In addition, if Titan spends the initial US$7 million of expenditures by January 1, 2022, it will also have the right to acquire a 100% interest in MRG by making a cash payment to Scorpio Gold of US$35 million on or before December 31, 2022 (the “Purchase Option”) .

Until the earlier of the December 31, 2021 and the date that Scorpio Gold extracts a further 3200 ounces of gold from the Mineral Ridge Property, Scorpio Gold may continue its gold recoveries from the heap leach operations on the Mineral Ridge Property for its own account with 25% of the proceeds of such operation, net of operating costs, to be held in a segregated trust account which will remain an asset of MRG if Titan exercises the Earn-in Option or Purchase Option.

The effectiveness of the Agreement remains subject to receipt of the approval of the shareholders of Scorpio Gold pursuant to a special resolution to be put forward at the upcoming annual general and special meeting of shareholders of Scorpio Gold on October 2, 2020.

Private Placement and Board Appointment Right

In connection with the Agreement, Scorpio Gold will raise C$5 million by the sale of 31,250,000 units (“Units”) at C$0.16 per Unit (the “Offering”) with Augusta Investments Inc. (“Augusta”) a company beneficially held by Richard W. Warke, purchasing C$4.6 million of the Offering.

Each Unit will consist of one common share of the Company (each, a “Share”) and one Share purchase warrant (each a “Warrant”). Each Warrant will entitle the holder thereof to purchase one Share for a period of three years from issuance at an exercise price equal to the lesser of $0.30 and the closing price of the Shares following the announcement of the Agreement and the Offering, subject to a minimum exercise price of $0.24. .

Augusta will subscribe for 29,031,250 Units for proceeds of $4,645,000, of which such number of Units will be issued in an initial tranche (the “Initial Tranche”), as a result of which, Augusta will hold 19.99% of the outstanding Shares on an undiluted basis. The Company will seek shareholder approval at its upcoming annual general and special meeting of shareholders to approve Augusta as a control person of the Company, following which, subject to receipt of such shareholder approval, the remaining Units will be issued to Augusta. The Warrants to be issued to Augusta in the Initial Tranche will not be exercisable to the extent they would cause Augusta to hold 20% or more of the outstanding common shares of Scorpio Gold until such shareholder approval is obtained. Upon the closing of the second tranche issuance to Augusta, it is anticipated that Augusta will own or control 29,031,250 Shares, representing 28.8% of the outstanding Shares of the Company, on an undiluted basis.

The proceeds of the private placement will be used primarily for advancing the planned toll-milling operations and exploration on the Company’s Goldwedge mineral property and for general corporate purposes.

Upon closing the Initial Tranche, as long as Augusta continues to hold at least 10% of the outstanding Shares, Augusta will be entitled to appoint one nominee to the Board of Directors of the Company.

About the Augusta Group

The Augusta Group is a mining sector-focused management group based in Canada and the United States. Augusta has an unrivaled track record of value creation totaling over C$4.5 billion in exit transactions since 2011 and has strategic partnerships with the leading entrepreneurs in the mining sector. Augusta is led by its founder and Chairman, Richard Warke.

About Titan Mining Corporation

Titan Mining Corporation (TSX:TI) is a mining company which produces zinc concentrate at its 100%-owned Empire State Mining in New York State. Titan is part of the Augusta Group.

About Scorpio Gold

Scorpio Gold holds a 100% interest in the Mineral Ridge gold mining operation located in Esmeralda County, Nevada. A NI 43-101 technical report on the updated feasibility study for the Mineral Ridge Project was filed on SEDAR on January 9, 2018. Mineral Ridge has a fully permitted mine and mill operation that is currently on care and maintenance. Mining at Mineral Ridge was suspended in November 2017; however, the Company continues to generate limited revenues from residual but diminishing recoveries from the leach pads. Approximately 1 million ounces of gold have been produced from underground and open pit mining operations at Mineral Ridge over the property’s +150 year history.

Scorpio Gold also holds a 100% interest in the advanced exploration-stage Goldwedge property in Manhattan, Nevada with a fully permitted underground mine and 400 ton per day mill facility. On July 20, 2020 the Company announced the terms of a purchase option to acquire a 100% interest from a subsidiary of Kinross Gold of the Manhattan Property situated adjacent and proximal to the Goldwedge property.

Scorpio Gold’s Chairman, Peter J. Hawley, P.Geo., is a Qualified Person as defined in National Instrument 43-101 and has reviewed and approved the content of this release.

This news release is intended for distribution in Canada only and is not intended for distribution to United States newswire services or dissemination in the United States. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the Shares or Warrants (the “Securities”) in the United States or to, or for the account or benefit of, any U.S. person. The Securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any securities laws of any state of the United States and may not be offered or sold within the United States or to, or for the account or benefit of, any U.S. person unless an exemption from such registration requirements is available. “United States” and “U.S. person” are as defined in Regulation S under the U.S. Securities Act.

ON BEHALF OF THE BOARD
SCORPIO GOLD CORPORATION
Brian Lock,
Chief Executive Officer

For further information contact:

Brian Lock, CEO
Tel: (604) 889-2543
Email: block@scorpiogold.com

Website: www.scorpiogold.com

As regards debt and gold's resurgence in time.

Andrew Ross is an NYU professor and activist with Strike Debt. He is the author of "Creditocracy and the Case for Debt Refusal."

In the 1970s and 1980s, developing countries got caught in a “debt trap” laid by Northern banks and creditors. Rather than enjoying credit that might aid their development, they were condemned to an eternity of debt service payments. Despite international efforts to promote debt forgiveness, most of them are still trapped, and have as a result become either failed or dysfunctional democracies because they are forced to prioritize debt repayments to foreign borrowers over the needs of their own people.

In the past decade or so, the debt trap has migrated to the North. Sovereign nations in the eurozone, revenue-strapped municipalities, public transit authorities and struggling households are all forced to borrow simply to meet their obligations to creditors. The formula used to trap personal debtors today is much the same as the International Monetary Fund’s formerly controversial lending arrangements to poor countries — loan installments are made so that borrowers can service existing debts, while the principal is rolled over. With average incomes stagnant or falling, households have no alternative but to follow the same path. The likely consequence is that they end up performing a lifetime of debt service to the banks.

As I argue in my book “Creditocracy and the Case for Debt Refusal,” this is how our financialized society works: The goal is to keep debtors on the hook for as long as possible, wrapping debt around every possible asset and income stream to generate profit. After all, if we pay down our debts entirely, we are no longer reliable sources of revenue for the banks.
The size of some of these [financial] institutions becomes so large that it does become difficult for us to prosecute them.

U.S. Attorney General Eric Holder

We are now well into the sixth year since the financial crash, yet every week still brings fresh headlines about malfeasance, fraud and extortion on the part of the finance industry. The cumulative record of scams is long and grisly: the collusion of bankers in LIBOR rate fixing, their pseudo-forgiveness of phantom debt, their rigging of municipal bond markets, their pursuit of illegal foreclosures, their payment protection insurance ripoff and the mendacity of their collection agents. As crooked as these practices are, it is clear that our elected officials are simply not able to bring the perpetrators to justice. Indeed, Attorney General Eric Holder publicly acknowledged the “too big to jail” doctrine in Senate testimony last year, when he observed that “the size of some of these institutions becomes so large that it does become difficult for us to prosecute them.”

Over the same period, we have seen a brisk increase in the number of debtors being sent to jail for traffic fines and other minor infractions. It appears that “debtors’ prisons,” first abolished in some U.S. states in the 1820s but not declared unconstitutional until the 1970s, have been staging a return all across the country. We are fast becoming a society in which the largest institutional swindlers are protected from prosecution while those struggling to pay their bills are criminalized and put behind bars.
‘Odious’ debt

In the absence of penal punishment, those who cannot pay are faced with harsh moral censure. Creditors rely on this payback morality to enforce their claims, and it is a deeply ingrained mentality. Civilization will crumble, we are led to believe, if people break their obligations to make creditors whole. But clearly, some debts are illegitimate, or predatory in nature, and probably should not be honored. For the last 15 years, advocates in the Jubilee South movement have campaigned, with some success, for cancellation of the external debts of developing countries. They have developed moral and legal arguments to distinguish between loans that were clearly advantageous to these societies, and loans that benefited only the creditors or inflicted social and environmental damage on families, communities and national sovereignty. The internationally recognized legal category of “odious” debt pertains to loans taken on by dictators and whose costs should not be passed on to the citizenry. But there are also other criteria, relating, for example, to the double-dealing of kleptocratic officials, that have been used to determine whether the loans were really needed, or whether their terms were negotiated with an eye on private profit rather than public welfare.

It’s easy to understand why taxpayers would balk at footing the bill when the sour outcomes of private speculation get repackaged as public debt, as happened after the bank bailouts, or when dodgy loan products are sold to credulous officials by hedge fund managers. These are questionable obligations to pass on to the electorate, and they probably should be reviewed through a citizens’ debt audit to see which ones stand up and which do not. But should personal loans be subject to the same line of moral inquiry? Are these debts not taken on voluntarily and in full knowledge of the consequences? The answers are not as simple as they seem, especially if they are guided by moral scrutiny of the creditors’ conduct.
Permanent indebtedness

The subprime scandal revealed the predatory basis of lending to those who could not make ends meet. The same kind of attitude dominates the landscape of fringe finance, where payday lenders, check cashers and other poverty banks all thrive on usurious interest rates. Making loans that clearly can never be repaid may be a more delinquent act than being unable to pay. Nor is this a situation that applies only to shaking down the working poor. In the past two decades, the condition of permanent indebtedness has penetrated deeply into the middle class, where creditors are knowingly creating debt traps in hopes of turning us all into “revolvers”: the kind of debtors who cannot ever clear the monthly balance but who pay the minimum, along with late fees and penalties, ensuring a steady flow of revenue.

Most problematic of all are the debts incurred to finance our access to vital social goods — education, health care, shelter and public infrastructure. For most people, these are existential and unavoidable, and are not the result of discretionary choices. Moreover, they could be classed as antisocial debts, because they eat away at the foundations of society. More than 60 percent of U.S. bankruptcies arise from medical debt, and these numbers have not fallen off in Massachusetts since the prototype of Obamacare was installed in that state.
Debts are, quite literally, the wages of the future.

Student debt, liberally offered to young adults who are not old enough to drink, is touted as the obligatory price to pay for access to a decent, but ever more elusive, job in the knowledge economy. Requiring young people to forfeit an increasingly larger chunk of their future income simply to prepare themselves for employment has been compared to indenture, though it may be more accurate to describe it as a kind of wage theft that lenders, both public and private, wittingly engage in. Debts are, quite literally, the wages of the future.

Our national economic managers are vexed by the prospect of generations of overindebted graduates who will not be able to buy a house, raise children or purchase big-ticket consumer items. But the larger threat is to the workings of an operational democracy. A crushing debt burden stifles our capacity to think freely, act conscientiously and fulfill our democratic responsibilities. Too many young people now feel their future has been foreclosed before they have entered full adulthood. And, given the creditors’ goal of prolonging debt service to the grave, the burden of repayment is shifting disproportionately toward the elderly (many of whom now are routinely asked to cosign student loans). Democracies don’t survive well without a functional middle class or a citizenry endowed with an optional political imagination, and the test of a humane one is how it treats seniors when they outlast their capacity to earn a living wage.

High levels of indebtedness are typically seen as a drag on the economy, but the costs to democracy are much greater. What share of responsibility lies with Wall Street, or with a government that is so beholden to bankers that it cannot protect, or provide relief to, its citizenry? Figuring out which debts we can legitimately refuse may turn out to be the only way of salvaging popular democracy. The titans of the finance industry will pronounce any talk of economic disobedience to be thoroughly unethical, but perhaps they are the last people to be preaching about morality.

Andrew Ross is an NYU professor and activist with Strike Debt. He is the author of "Creditocracy and the Case for Debt Refusal."

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