TORONTO, Dec. 20, 2018 (GLOBE NEWSWIRE) -- Mammoth Resources Corp. (TSX-V: MTH), (the
“Company”, or “Mammoth”) is pleased to announce the signing of an option agreement with Centerra Gold
Inc. (“Centerra”) to option Mammoth’s Tenoriba precious metal property located in the prolific Sierra Madre precious metal belt in
southwestern Chihuahua State, Mexico. Centerra has the option to earn up to a 70% interest in Tenoriba upon total project
expenditures of US$9.0 million over a seven-year period, expenditure amounts which can be accelerated depending on exploration
success.
Thomas Atkins, President and CEO of Mammoth commented on the signing of this agreement,
stating: “We’re exceptionally pleased to be partnering with Centerra in the exploration-development of Tenoriba. The
depth of Centerra’s technical experience in these types of mineral systems, their experience in project exploration and mine
development, combined with their financial strength and the economies in costs and services a company of Centerra’s strength and
size can achieve have the potential to assist in advancing Tenoriba beyond what Mammoth could achieve on its own. The option
agreement ensures robust exploration expenditures over a reasonable time frame, amounts which can be accelerated depending on the
level of success, and which enables Mammoth shareholders to retain a 30 percent interest in the project upon Centerra having
fulfilled its total US$9.0 million expenditure obligation.
“We’re excited for the new year and the advancement of exploration activities with Centerra, following up
on the successes of the 2018 and 2007 drill programs at Tenoriba which together totalled 28 drill holes in various locations
along an approximate 4 kilometre strike length which remains open to the east and west. Drilling intersected potentially economical
grades in the majority of these holes with many intersections occurring over tens of metres.”
Details on the terms of the option agreement include a committed minimum US$500,000 in project exploration
Expenditures (all exploration costs, property taxes, surface rights and administrative fees) over the first twelve-month period
from the Effective Date of signing this option agreement and which over the four-year term of the first option include total
Expenditures of US$5,000,000 upon which having completed such Expenditures, Centerra will earn a 51% interest in the property. The
schedule of Expenditures are as follows:
- On or before the first anniversary of the Effective Date, Expenditures in the aggregate are no less than
$500,000;
- On or before the second anniversary of the Effective Date, Expenditures when aggregated are no less than
$1,500,000;
- On or before the third anniversary of the Effective Date, Expenditures when aggregated are no less than
$3,000,000; and
- On or before the fourth anniversary of the Effective Date, Expenditures when aggregated are no less than
5,000,000;
Centerra having earned this initial 51% interest has a second option entitlement to earn an additional 19% of
the ownership interests in the Tenoriba property by performing the following within the three-year period following initiation of
this second option:
- Incurring additional Expenditures on Tenoriba in the aggregate amount of US$4,000,000 and completing a preliminary
economic assessment level study on Tenoriba which identifies a mineral resource which is compliant with National Instrument
43-101; and
- Upon having completed the additional Expenditures under the second option, make cash payments of US$550,000 to
Mammoth, or at Centerra’s option issue to Mammoth Centerra common shares totalling US$550,000 (in the event that common shares
are issued, the five-day volume weight trading price of a Centerra common share on the Toronto Stock Exchange immediately prior
the date of issuance will be used to determine the number of shares to be issued, any Centerra common shares issued subject to a
hold period during which shares cannot be sold, as required by the Ontario Securities Act).
In the event either party selects not to fund its respective interest going forward such non-participating party
may be diluted to a 10 percent interest whereupon such interest would revert to a two percent NSR, of which one percent can be
purchased for US$1.0 million and the non-diluted party has a right of first refusal on the sale of the remaining one percent NSR
interest.
During the term of this option agreement, and until Centerra’s interest drops below a 50 percent interest
(following its having earned the initial 51 percent interest), Centerra will be the project operator. As project operator Centerra
will submit program activities and budgets to Mammoth for review and input prior to approval. Centerra will be eligible to receive
a management fee equal to 5% of invoiced drilling and certain other high cost Expenditure activities (any single activity that
exceeds $50,000) or otherwise receive a 10% management fee on all other Expenditures.
Mammoth would like to take this opportunity to correct a statement made in a press release dated December 6,
2018. In this press release it was stated that Mammoth requested approval to issue 2,414,000 common shares of Mammoth at a deemed
issuance price of $0.05/share to settle amounts owed two third party creditors. The Company would like to correct this statement to
read that it has requested approval to issue 1,535,600 shares of the Company at a deemed issuance price of $0.05/share to these
creditors. The issuance of these shares remain subject to TSX Venture Exchange approval.
To find out more about Mammoth Resources and to sign up to receive future press releases, please visit the
company's website at: www.mammothresources.ca., or contact Thomas Atkins, President and CEO at: 416
509-4326.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Information: This news release may contain or refer to forward-looking
information. Although the Company believes that the assumptions inherent in the forward-looking statements are reasonable,
forward-looking statements are not guarantees of future performance and, accordingly, undue reliance should not be placed on these
forward-looking statements due to the inherent uncertainty therein. Please refer to the Company’s website at the following
link: http://www.mammothresources.ca/s/FAQ.asp to review the Company’s complete forward looking
statement.
