RE:RE:RE:Halted, BTU CEO Paul Wood commented; "We are very pleased to enter into this series of transactions with Kinross, which will: provide CAD$2.8 million in cash to the Company by way of a private placement and property sale, accelerate the exploration of BTU's properties through an earn-in agreement of up to CAD$4.7 million, and, in all cases, leave substantial upside for BTU shareholders through a royalty package and its at least 30% interests in the Optioned Properties of the Dixie Halo Project. BTU will fully support Kinross as they commence their exploration work on the Optioned Properties and we are very pleased to have Kinross as a partner. The Company is also in the process of sourcing, accepting and assessing new and complementary minerals exploration projects to add to and diversify our property portfolio."
Kinross commented; "We are pleased to be working with the BTU Metals team to advance the Dixie Halo property, which is adjacent to Kinross' 100% owned Great Bear project."
Subscription
The Company has entered into a subscription agreement with Kinross for gross proceeds of approximately CAD$1,250,000 million in an arms-length private placement (the "Private Placement") of its common shares (the "Common Shares"), comprised of 25,000,000 Common Shares at a purchase price of CAD$0.05 per Common Share. The net proceeds of the private placement will be used by the Company for investments, general and working capital purposes.
The Private Placement closed on February 22nd, 2023, subject to the satisfaction of customary closing conditions, including the final approval of the TSX Venture Exchange (the "TSX-V"). Kinross became an insider of the Company upon the closing of the Private Placement, and holds 25,000,000 Common Shares, representing 17.5% of the issued and outstanding Common Shares.
The Common Shares will have a hold period of four months and one day from the closing date of the Private Placement.
Asset Acquisition
The Company has also entered into a purchase agreement with GBR, a wholly-owned subsidiary of Kinross, for the purchase (the "Acquisition") of certain unpatented mining claims located in the Kenora District of Ontario (the "Acquisition Properties"). The Acquisition Properties have a total area of 2,637 hectares, and consist of 39 Boundary Cell Mining Claims and 76 Single Cell Mining Claims located to the south of the Great Bear Project, as well as 2 Multi-cell Mining Claims located to the north of the Great Bear Project (see Figure 1). BTU will hold Net Smelter Royalties from 1.5% to 2.5% on these properties as well as underlying royalty buy back rights.
The consideration payable by GBR pursuant to the Acquisition is: (i) CAD$1,550,000 in cash, with CAD$1,250,000 due immediately on closing and an additional CAD$300,000 due on the one-year anniversary of the closing date, and (ii) GBR issued to the Company a variable 1.5% - 2.5% NSR royalty on the Acquisition Properties (the "Royalty"), such that each Acquisition Property will have a cumulative total 4% NSR royalty attached to it upon the grant of the Royalty, once combined with the existing royalties payable over and in respect of the Acquisition Property. BTU will maintain any existing third-party royalty buy-back rights in respect of the Acquisition Properties.