Brigadier Gold Limited (TSX VENTURE:BRG) and Molycomex S.A. de C.V Ltd.
("Brigadier") has entered into a replacement letter of agreement with the
shareholders of Molycomex S.A. de C.V. ("Molycomex") which replaces the terms
and conditions with which Brigadier will acquire a 70-per-cent undivided right,
title and interest in 5 additional Cuatro Cienegas mineral properties in Mexico
(the "Assets") through Molycomex. (the "Acquisition").
The revisions remove the purchase of the holding company of Molycomex (Mexican
Copper Mines (Guernsey) Limited), which had no assets other than the shares of
Molycomex, so as to remove the disclosure and audit obligations on that company
and simplify the Transaction. It also redefines the provisions and amounts of
performance warrants issuable as part of the Transaction to bring them into
compliance with TSX-Venture Exchange policy. Under the new Letter, Brigadier
will issue 20,000,000 consolidated treasury shares (following a consolidation of
its outstanding shares on a 10 for one basis, to be presented to a special
shareholder meeting), subject to the approval of the TSX Venture Exchange. In
addition, Brigadier will issue warrants with the following terms:
(a) If Brigadier obtains, within three (3) years from completing the
Acquisition, a report prepared in conformity with the requirements of
National Instrument 43-101 ("NI 43-101") disclosing that the Assets
contain 200,000 tonnes of ore, with a grade of not less than 1% copper
equivalent, then the warrant holder may exercise the warrant and
acquire 10,000,000 Consolidated Shares;
(b) If Brigadier obtains, within four (4) years from completing the
Acquisition, a report prepared in conformity with the requirements of
NI 43-101 disclosing that the Assets contain 500,000 tonnes of ore,
with a grade of not less than 1% copper equivalent, then the warrant
holder may exercise the warrant and acquire 10,000,000 Consolidated
Shares;
In connection with the Acquisition, Molycomex has agreed to amend the terms of
the $2,041,014 debenture, such that the debenture shall bear interest at 12% and
become convertible as to interest and principal, at the option of Brigadier at
the price of $0.25 per share during the 4 years following completion of the
Transaction.
Subject to Exchange approval, Brigadier Gold will pay a finder's fee to an
unrelated third party in connection with this transaction by the issuance of 2
million post consolidated shares in the Company subject to TSX Venture Exchange
approval.
Concurrent with the completion of the Transaction, Brigadier will complete a
private placement of its Consolidated Shares to raise a minimum of US$2,000,000
and a maximum of US$3,000,000 at a price of $0.25 CAD per Consolidated Share,
subject to the consent of the TSX Venture Exchange.
About the Assets
The properties are situated in the State of Coahuila, Mexico, almost adjacent to
Brigadier's Granizo and Don Indio Properties, some 50 km southeast of the town
of Cuatro Cienegas. The Properties lie along the foot of the Sierra San Marcos y
Pinos range and are composed of 5 concessions, totalling 14,859 ha, namely: the
Apache 4, Apache 14, San Antonio, Jabali and Jabali 2 concessions. The Apache
14, San Antonio, Jabali and Jabali 2 concessions all fall within the Apache 4
concession. Molycomex has a 100% interest in the Apache 4 concession and a 70%
interest in the Apache 14, San Antonio, Jabali and Jabali 2 concessions. There
are 3 additional concessions, which lie within the Apache 4 concession that are
not owned by Molycomex, namely the Martha (210 ha) and the two El Ojito claims
(43 ha and 83 ha respectively).
On the Molycomex Properties, stratabound copper-silver mineralization occurs
within arenites and arkoses at the top of the Lower Cretaceous San Marcos
Formation, just below a zone of carbonaceous beds grading into limestones of the
Lower Cretaceous Cupido Formation. The stratabound Cu-Ag mineralization can be
traced in outcrop for some 40 km northwest to southeast and has an, as yet,
undefined down-dip extension to the northeast. The mineralization occurs in 1.7
m- to 5.69 m-thick, concordant layers referred to as "mantos". The mantos carry
Cu and Ag minerals, (predominantly supergene chrysocolla, malachite, azurite and
tenorite). Small amounts of primary copper sulphide minerals, such as chalcocite
and argentite, occur within the quartz cement of the arenites, Exploration
during 2012 revealed mantos carrying grades of 0.2 to 18.0 % copper and 2 to 592
g/t silver.
There are presently five main showings on the Molycomex Properties, namely: the
Buena Suerte, San Antonio, Ojitos, Emes and Las Juanitas showings. The Buena
Suerte and San Antonio showings are currently the primary exploration targets.
The San Antonio and Buena Suerte showings are part of one continuous manto,
which has a thickness of 1.4 to 4.25 m and has been traced continuously along
strike for 1.2 km. Calculated weighted sample averages from the San
Antonio-Buena Suerte manto indicate grades of between 0.02 to 4.91% Cu and 1 to
51 g/t Ag. Localized sample intervals show enrichment in Cu and Ag: a 0.48 m
zone of 4.26% Cu, a 0.75 m zone of 5.77% Cu, a 0.70 m zone of 14.9% Cu and 91
g/t Ag, a 0.79 m zone of 5.87% Cu, and a 0.85 m zone of 159 g/t Ag. The down-dip
extent of this manto remains open for the San Antonio and Buena Suerte showings.
The Ojitos showing, discovered in 2011, has a mineralized thickness of 0.5 to
5.69 m, with calculated weighted trench-sample averages ranging from 0.03 to
3.66% Cu and 1 to 583 g/t Ag. Locally, mineralized zones show enrichment in Cu
and Ag: a 0.80 m zone of 18.05% Cu, a 1.30 m zone of 9.79% Cu, a 2.49 m zone of
6.93% Cu, a 0.64 m zone of 16.75% Cu and 592 g/t Ag, a 0.66 m zone of 5.81% Cu
and 197 g/t Ag, and a 0.70 m zone of 583 g/t Ag.
Some 1.5 km northwest of Ojitos is the Emes showing, also discovered in 2011. A
grab sample from this manto carried 2.65% Cu and 48 g/t Ag.
The northernmost showing on the Molycomex Property is Las Juanitas. This showing
is situated stratigraphically deeper than the above-mentioned showings (within
the L. Cretaceous San Marcos Formation). The manto has a thickness of 0.4 to 2.0
m and grades 0.01 to 2.83 % Cu and 1 to 63 g/t Ag. Locally, mineralized zones
show enrichment in Cu and Ag, including a 0.5 m zone of 2.83% Cu and 63 g/t Ag.
The down-dip extension, as with the other showings, is yet to be defined by
drilling.
It is postulated that these Cu-Ag bearing mantos were generated when deep, hot,
oilfield basinal brines leached Cu and Ag (plus a spectrum of other elements
including Zn, Pb) from sedimentary and igneous rocks. During an orogenic phase,
these hot, metalliferous brines migrated towards the surface through the
Cretaceous strata. The fluids then encountered an oxidation/reduction boundary
in the Lower Cretaceous strata and thus Cu and Ag sulphides were precipitated.
Subsequent interaction with oxidizing ground waters partially broke down the
metal sulphides and deposited the secondary copper and silver minerals.
Sediment-hosted copper deposits are traditionally classified into two types: the
Kupferschiefer type and the redbed type. The Cu-Ag deposits of the Cuatro
Cienegas area belong to the latter redbed type. Elsewhere in North America
redbed copper deposits, similar to those around Cuatro Cienegas, occur at Las
Vigas (Chihuahua, Mexico), Spar Lake (Montana, USA), Rock Creek and Montanore
(Montana, USA), and Creta (Oklahoma, USA). Evidence from recent exploration
reveals characteristics of the Cu-Ag deposits on the Molycomex Properties which
bear many striking similarities to the deposits of the Copper Belt of Zambia and
the Democratic Republic of the Congo, which have to date produced in excess of 1
billion tonnes of copper metal from ores with an average grade of approximately
2.7% Cu, together with significant quantities of Ag.
These results were obtained by qualified personnel during the preparation of an
NI 43-101 report and can be considered accurate. This report on the Madero
property was written by Dahrouge Geological Consulting Ltd. and dated December
11, 2013. It was filed on www.sedar.com, on February 28th, 2014. William R.
Gilmour, BSc, PGeo, of Discovery Consultants of Vernon, BC, and a qualified
person as defined by NI 43-101, has supervised the preparation of the scientific
and technical information that forms the basis for this news release.
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 news release.
FORWARD-LOOKING STATEMENTS: This news release contains certain "forward-looking
statements." All statements, other than statements of historic fact, that
address activities, events or developments that Brigadier believes, expects or
anticipates will or may occur in the future are forward-looking statements.
Forward-looking statements are often, but not always, identified by the use of
words such as "seek," "anticipate," "believe," "plan," "estimate," "expect," and
"intend" and statements that an event or result "may," "will," "can," "should,"
"could," or "might" occur or be achieved and other similar expressions. These
forward-looking statements reflect the current expectations or beliefs of
Brigadier based on information currently available to Brigadier. Forward-looking
statements are subject to a number of risks and uncertainties that may cause the
actual results of Brigadier to differ materially from those discussed in the
forward-looking statements, and even if such actual results are realized or
substantially realized, there can be no assurance that they will have the
expected consequences to, or effects on Brigadier. Factors that could cause
actual results or events to differ materially from current expectations include,
among other things, failure to successfully complete financings, capital and
other costs varying significantly from estimates, production rates varying from
estimates, changes in world copper and/or gold or other mineral markets, changes
in equity markets, uncertainties relating to the availability and costs of
financing needed in the future, equipment failure, unexpected geological
conditions, imprecision in resource estimates, success of future development
initiatives, competition, operating performance of facilities, environmental and
safety risks, delays in obtaining or failure to obtain tenure to properties
and/or necessary permits and approvals, and other development and operating
risks. Any forward-looking statement speaks only as of the date on which it is
made and, except as may be required by applicable securities laws, Brigadier
disclaims any intent or obligation to update any forward-looking statement,
whether as a result of new information, future events or results or otherwise.
Although Brigadier 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 put on such
statements due to the inherent uncertainty therein.
FOR FURTHER INFORMATION PLEASE CONTACT:
Brigadier Gold Limited
Mr. Grant Hall
President & CEO
+1 (520) 668-4101
ghall@brigadiergold.com
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