GOLD79 ISSUES SHARES FOR JEFFERSON CANYON ANNIVERSARY PAYMENT
May 28, 2021 – Gold79 Mines Ltd. (TSX-V:AUU) (“Gold79” or the “Company”) announces that it intends to issue 351,337 common shares of the Company at a deemed value of CDN$0.086 per common share in connection with the US$25,000 second anniversary payment due under the terms of the Jefferson Canyon, Nevada property option agreement (the “Agreement”). The deemed value is determined by the 20-day volume-weighted average price preceding this announcement. The common shares issued will have a statutory hold period of four months and one day from the date of issuance. This shares for debt transaction remains subject to TSX Venture Exchange approval.
Details of Jefferson Canyon Option Agreement
Under the terms of the Agreement, Gold79 can earn a 100% interest in the Jefferson Canyon Project from Thorsen-Fordyce Merchant Capital Inc. (“Thorsen”) and TF Minerals (USA) Inc. (together the “TF Parties”) by making the six remaining annual payments valued at US$25,000 on May 31, 2021 through 2026 which may be paid in common shares and/or cash at the option of the Company; and, a cash payment by May 31, 2027 of US$200,000. The Company has completed the US$100,000 work commitment required under the agreement.
Additionally, 29 claims forming part of the Jefferson Canyon Project are subject to an underlying option agreement, initiated in September 2015, between Thorsen and an individual claim holder (the “Underlying Agreement”) whereby Thorsen has the right to earn a 100% interest in these claims. As part of the Agreement, the Company assumed all obligations under the Underlying Agreement. The Underlying Agreement requires annual advance royalty payments by September 14 during 2017 through 2029 with payments totalling US$425,000 of which US$395,000 is remaining. In 2021, the payment is US$20,000 and increases by $5,000 per year until 2026, and is followed by followed by four annual payments of US$50,000 for 2026 to 2030. The option to acquire a 100% interest in the 29 claims (“Underlying Claims”) is exercisable at any time during its term, up until March 14, 2032 by paying a purchase price of US$500,000. Any advance royalty payments paid and the purchase price are creditable against future net smelter return royalties payable.
Additionally, the 28 claims staked by the TF Parties are subject to a 3% net smelter return (“NSR”) and the 29 Underlying Claims are also subject to a 3% NSR. Each of these NSR obligations are subject to separate buyback provisions whereby up to 2% of each NSR can be purchased by the Company for US$1,000,000 for each 1%.