News outEarn in and dilution and change of ownership...cheers
Sixty North Gold Negotiates Proposed Amendments to Earn-in Option Agreement to Acquire All of New Discovery Mines Ltd.'s Interest in the Mon Gold Property, NWT
Vancouver, British Columbia--(Newsfile Corp. - April 7, 2022) - Sixty North Gold Mining Ltd. (CSE: SXTY) (FSE: 2F4) (OTC Pink: SXNTF) (the "Company" or "Sixty North Gold"):
Sixty North Gold is pleased to announce that it has agreed to an accelerated earn-in of a 100% interest in the past producing Mon Gold Mine with all related equipment, supplies, licenses and permits, through a further amending agreement with New Discovery Mines Ltd. ("NDML"). Under the existing agreement the Company has a right to earn an 80% interest in the Mon Gold Property by incurring Expenditures of at least $6.0 million on the Mon Gold Property (of which $5.7 million have already been incurred), and NDML's remaining 20% carried interest can be acquired in exchange for common shares of the Company equal to 25% of the total issued and outstanding shares (post-dilution). Additional common shares of Sixty North Gold will be issued to maintain NDML's twenty-five percent (25%) interest in the total issued and outstanding shares of Sixty North Gold until the total expenditures specifically for the exploration and development of the A-Zone on the Mon Gold Property reached a total of $6.0 million.
The agreement has been revised to the issuance to NDML of a total of 49,511,367 common shares, representing 25.48% of the then issued and outstanding shares of the Company (the "Share Consideration"). The Company will own 100% interest in the Mon Gold Property (the "Acquisition"), subject only to an underlying 2.0% net smelter returns royalty, with minimum annual advance royalties (to be credited against future royalties payable).
The Share Consideration will be subject to escrow restrictions permitting the release of 10% to NDML upon closing of the Acquisition, and further releases from escrow in instalments of 15% of the original number of shares every quarter for a period of 18 months.
John Campbell, Chairman and CFO of the Company, states, "The acceleration of the earn-in and subsequent acquisition of a 100% interest of the property, including all mining equipment, infrastructure and supplies is transformative for Sixty North Gold. We appreciate New Discovery Mines' progress on the property, and look forward to a more direct involvement in gold production from the Mon A-Zone. It also clearly aligns New Discovery Mine's interests with the shareholders of Sixty North Gold".
The closing of the above Acquisition is subject to a number of conditions, including but not limited to the execution of definitive agreements, and any required regulatory approval due to the contemplated change of control of the Company to NDML. There can be no assurance that the Acquisition will be completed as proposed or at all.
The proposed Acquisition is considered to be a "related party transaction" under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), but it will be exempt from formal valuation requirements because the Company's shares are not listed on a "specified market" (as defined under section 5.5(b) of MI 61-101), and the fair value of the proposed Acquisition does not exceed $2.5 million so it is therefore exempt from the requirement of majority of the minority shareholders' approval under section 5.7(b) of MI 61-101.
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