RE: New Board Members Challenger Development to acquire Gordon Creek property
2012-10-01 18:10 ET - News Release
Mr. Simon Tam reports
OPTION EPITHERMAL PRECIOUS METAL PROJECT IN BRITISH COLUMBIA AND $500,000 FINANCING
Challenger Development Corp. has entered into an option agreement with Qualitas Holdings Corp. to acquire a 100-per-cent interest in the Gordon Creek property. Gordon Creek is an epithermal precious metals project located 25 kilometres northeast of Merritt, B.C., and lies within the Lower Cretaceous Spences Bridge group, an andesitic-to-rhyolitic volcanic arc belt of rocks. Gordon Creek consists of four mineral claims with a total area of 2,066.08 hectares.
The Spences Bridge gold belt hosts several epithermal precious metal occurrences and deposits, the bulk of which were discovered by following up British Columbia Ministry of Energy and Mines regional geochemical survey stream sediment anomalies. The Gordon Creek property has a regional geochemical survey stream sediment gold anomaly of 18 parts per billion on the north, or Gordon Creek, side of an unnamed mountain. In addition, there is a second stream sediment gold anomaly of 21 parts per billion on the south, or Poison Creek, side of the same unnamed mountain, located by a previous operator. The location of these anomalies suggests a potential gold source on this mountain. A program of property-wide soil sampling and prospecting has been recommended for the Gordon Creek property at an estimated cost of $118,926.
Consideration for the acquisition is a cash payment of $80,000, incurring exploration expenditures of $300,000 on the property over a three-year period and issuing 200,000 common shares from treasury to the vendor. The vendor retains a 2-per-cent net smelter return, up to one per cent of which may be purchased by the company for $1-million.
Private placement financing
The company has entered into a non-brokered private placement for the sale of 10 million units at a price of five cents per unit for a total of $500,000. Each unit will consist of one common share and one-half of one non-transferable share purchase warrant. Each whole share purchase warrant will entitle the holder to purchase one further common share of the company for 15 cents on or before the lesser period of 24 months from the date of issuance of the share purchase warrant or the period ending on the 10th business day following 10 consecutive days that the market price of the shares as traded on the TSX Venture Exchange has closed equal to or greater than 50 cents per share. All of these units are subject to a four-month hold period from the date of closing. The foregoing accelerated exercise provision shall only apply to the share purchase warrants upon the expiry of four months from the date of issuance of the share purchase warrants. The proceeds from this private placement will be used for the company's acquisition of the Gordon Creek property, the exploration program and unallocated working capital.
These transactions are subject to regulatory approval. The maximum allowable finder's fee shall be paid in shares and cash with regard to the private placement financing as per the TSX Venture Exchange's policy guidelines.
R. Tim Henneberry, PGeo, a qualified person under NI 43-101 and a consultant to Challenger Development, has reviewed and approved the technical content of this news release.
We seek Safe Harbor.