Brigadier options Killala Lake, arranges placement 2020-05-11 18:52 ET - News Release
Mr. Ranjeet Sundher reports
BRIGADIER ENTERS INTO OPTION AGREEMENT FOR PURCHASE OF KILLALA LAKE DIAMOND PROPERTY AND ANNOUNCES PRIVATE PLACEMENT
Brigadier Gold Ltd. has entered into an option agreement with Rudolf Wahl and Mike Dorval, together doing business as the Wahl Group, to acquire a 100-per-cent interest in the Killala Lake South diamond property, consisting of 46 cell claim units located in Killala Lake, Foxtrap Lake area townships, Thunder Bay mining district, Ont., subject to reservation of royalties in favour of the Wahl Group.
Under the agreement, the corporation may earn 100 per cent of the interest in the property by making certain cash payments and payments of common shares in the capital of the corporation, over a period as follows: (i) $15,000 in cash upon execution of the agreement, (ii) 500,000 common shares upon approval of the TSX Venture Exchange of the agreement and transaction; (ii) $15,000 and 200,000 common shares payable on or before each of the first, second and third anniversaries of the date of the agreement; and $50,000 and 500,000 common shares payable on or before the fourth anniversary of the date of the agreement, for total proceeds of $110,000 and 1.6 million common shares issued at a deemed price of five cents per common share or an aggregate deemed value of $80,000. The corporation may, in its sole discretion, accelerate payment of cash and common shares in advance of the anniversary dates.
The Wahl Group shall retain a 3-per-cent gross overriding royalty (GOR) with respect to diamonds extracted from the property and a 2-per-cent net smelter royalty (NSR) on any non-diamond minerals or metals discovered on the property. The corporation shall have the right, at any time, to purchase one-half of each of the GOR and NSR for $2-million and $1-million, respectively. In the event the corporation files a technical report prepared in accordance with National Instrument 43-101 -- Standards of Disclosure for Mineral Projects (NI 43-101), which identifies a resource exceeding three million carats, the corporation will issue an additional one million common shares to the Wahl Group, with another one million shares being issued upon completion of a positive bankable feasibility study. In addition, for each kimberlite or lamproite pipe drilled within the area of interest (as defined in the agreement) and which produces more than 10 commercial-sized diamonds, the corporation will issue an additional 500,000 common shares to the Wahl Group. All common share issuances under the agreement will be issued at a deemed price of five cents per common share, being the market price of the common shares of the corporation as of the date of the agreement, as such term is defined by the policies of the TSX Venture Exchange.
Private placement
In connection with the transaction, the corporation intends to complete a non-brokered private placement of seven million units of the corporation at a price of five cents per unit for minimum gross proceeds of $350,000. Each unit will consist of one common share and one common share purchase warrant, with each whole warrant exercisable at a price of 10 cents per warrant for a period of one year from the date of closing of the offering.
The transaction and offering are subject to, among other things, the completion of a technical report on the property in accordance with National Instrument 43-101 and obtaining all necessary regulatory approvals, including that of the TSX-V. The corporation will apply to the TSX-V to be listed as a Tier 2 mining issuer concurrent with the completion of the transaction and the offering.
The common shares of the corporation will remain halted until the TSX-V has reviewed and approved the transaction.