Vancouver, British Columbia--(Newsfile Corp. - June 7, 2017) - American CuMo Mining Corporation (TSXV: MLY) (OTC Pink:
MLYCF) ("CuMoCo" or the "Company") is pleased to provide an update on the Memorandum of Understanding (the "MOU")
between the Company, its subsidiaries, Poly Resources LLC ("Poly") and Idaho CuMo Mining Corporation ("Idaho CuMo"), and Millennia
Minerals Pte Ltd. (Singapore) ("Millennia") dated February 27, 2017 (see News Release dated February 27, 2017).
The MOU outlined the broad terms of a US$200 million private placement from Millennia to fund early-stage exploration through to
pre-feasibility on the Calida Gold project owned by Poly Resources LLC for US$100 million and to provide funding to continue the
development of the Company's CuMo Project through to feasibility for US$100 million. The MOU was subject to Millennia's completion
of legal, technical, and financial due diligence.
During the process of completing its due diligence, Millennia determined that additional financial structuring was required in
connection with its investment. This led to the parties engaging in further negotiations that changed the timing and structure of
the investment.
As a result of these negotiations, the parties have agreed in principal that:
-
Millennia would have the right to acquire up to a 70% equity interest in Poly Resources for US$100 million, which amount
would be invested in accordance with the following schedule: (i) US$5 million for a 25% membership interest in Poly Resources
on or about June 20, 2017, of which US$1million has already been paid by Millennia, as announced by CuMoCo on March 15, 2017,
(ii) US$5 million for an additional 25% membership interest in Poly Resources on or about the later of June 30, 2017 or the
date Poly Resources receives all of the required permits for its planned 2017 exploration drilling program, (iii) US$40 million
for an additional 10% membership interest in Poly Resources not later than 30 days following receipt of a National Instrument
43-101 compliant resource report on the Calida Project (the "Third Contribution"), and (iv) US$50 million for an additional 10%
membership interest in Poly Resources not later than the first anniversary of the Third Contribution;
-
Millennia would have the right to acquire up to a 20% equity interest in Idaho CuMo for US$100 million, which amount would
be invested in accordance with the following schedule: (i) US$10 million for a 2% equity interest in Idaho CuMo not later than
June 30, 2017, (ii) US$15 million for an additional 3% equity interest in Idaho CuMo not later than December 31, 2017, (iii)
US$25 million for an additional 5% equity interest in Idaho CuMo not later than June 30, 2018, (iv) US$25 million for an
additional 5% equity interest in Idaho CuMo not later than December 31, 2018 and (v) US$25 million for an additional 5% equity
interest in Idaho CuMo not later than June 30, 2019;
-
Millennia is to subscribe for eleven million common shares of the Company for an aggregate subscription price of US$3
million, which subscription is to occur concurrently with its US$10 million instalment to be paid to Idaho CuMo Mining
Corporation. This subscription for CuMoCo common shares increases Millennia's aggregate investment to a total of US$203 million
in staged funding into CuMoCo and CuMoCo's two projects;
-
Concurrent with each investment by Millennia in Poly Resources or Idaho CuMo, Millennia would receive the right to receive
warrants, issuable upon the consummation of a take-over transaction of CuMoCo by an independent third-party, to purchase such
number of common shares of CuMoCo as equals the amount of such investment divided by the share price of CuMoCo common shares at
the time of such investment (and with an exercise price equal to such share price);
-
Upon execution of definitive agreements in respect of the transactions contemplated, Millennia would receive the right to
receive warrants, issuable upon a determination that the Calida Project was non-viable, to purchase either (i) common shares of
CuMoCo, the value of which would be equivalent to the amount of the initial contribution to Poly Resources of US$5 million
actually expended at the time of exercise of such warrants, or (ii) Idaho CuMo secured silver stream notes, the value of which
would be equivalent to the amount of the initial contribution to Poly Resources of US$5 million actually expended at the time
of exercise of such warrants, or alternatively, Millennia would have the right to earn an additional 20% interest in Idaho CuMo
by investing another US$100 million;
-
Millennia would receive the right to receive warrants, issuable upon Millennia's investment of US$10 million in each of Poly
Resources and Idaho CuMo, to purchase one percent (1%) of CuMoCo's common shares at an exercise price equal to the trading
price of CuMoCo common shares as of the close of trading on the day after CuMoCo's announcement of Millennia's US$10 million
investment in each of Poly Resources and Idaho CuMo; and
-
Millennia would have the right to terminate the definitive agreement governing the foregoing transactions at any time and,
not later than the first anniversary of such termination, CuMoCo would be required to purchase within that 365 day period all
of the equity interests in Poly Resources and Idaho CuMo for a purchase price equal to the cost thereof plus, if at the time of
such termination Millennia had made total investments of at least US$5 million, 20% of the amount of such investments that had
been expended by Poly Resources or Idaho CuMo.
Millennia has advised CuMoCo they are satisfied that the risk and control measures included in the legal agreements for the
Calida Gold project development are suitable for an early stage exploration project. Millennia has also informed CuMoCo they are
still undertaking technical and financial due diligence on the CuMo Project and that they expect to complete the initial investment
funding on time as described above, subject to completion of final legal due diligence and regulatory approval.
This financing transaction is subject to receipt of TSX Venture Exchange approval.
About CuMoCo
CuMoCo focuses on advancing its CuMo Project towards feasibility. CuMoCo also intends to advance its newly-acquired Calida Gold
project. Management is continuing to build an even stronger foundation from which to move the Company and its projects
forward. For more information, please visit www.cumoco.com, www.idahocumo.com and www.cumoproject.com.
For further information, please contact:
American CuMo Mining Corporation
Shaun Dykes, President and Chief Executive Officer
Tel: (604) 689-7902
Email: info@cumoco.com
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies
of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this new release.
Forward-looking information
This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation
including, but not limited to, statements that address activities, events or developments that the Company expects or anticipates
will or may occur in the future, such as Millennia satisfactorily completing due diligence and Company, Idaho CuMo, Poly and
Millennia subsequently entering into a definitive agreement; Millennia completing the aforementioned private placements; the
Company's ability to move its CuMo Project to feasibility and production, and to become one of the largest and lowest-cost
molybdenum producers in the world as well as a significant producer of copper and silver. Forward-looking information is based on a
number of material factors and assumptions, including the result of exploration activities, the completion of Millennia's due
diligence and its ability to complete the aforementioned financings, the ability of the Company to raise the financing for a
feasibility study and to put the CuMo project into production, that no labour shortages or delays are experienced, that plant and
equipment function as specified that the Court will not intervene with the Company's proposed exploration activities at the CuMo
Project, and the ability of the Company to obtain all requisite permits and licenses to advance the CuMo Project and eventually
bring it into production. Forward-looking information involves known and unknown risks, future events, conditions, uncertainties
and other factors which may cause the actual results, performance or achievements to be materially different from any future
prediction, projection or forecast expressed or implied by the forward-looking information. Such factors include, among others, the
interpretation and actual results of current exploration activities; changes in project parameters as plans continue to be refined;
future prices of molybdenum, silver and copper; possible variations in grade or recovery rates; labour disputes and other risks of
the mining industry; delays in obtaining governmental approvals or financing, as well as those factors disclosed in the Company's
publicly filed documents, including the Company's Management's Discussion and Analysis for the period ended March 31, 2017. There
may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no
assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially
from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information.
Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise
forward-looking information.
