- ESV Resources to change name to Denarius
Silver Corp. as it turns attention to becoming a silver focused
company, looking to offer shareholders exposure and leverage to the
precious metal
- Guia Antigua Project, a past silver producer
adjacent to Gran Colombia Gold's flagship Segovia mine (TSX:GCM),
has previously produced over 78,000 oz of silver at an average
grade of 404 g/t silver
- Zancudo Project, a past gold-silver mine,
previously produced over 1.5 million oz of gold at an average grade
of 14.6 g/t gold and 108 g/t silver, to be acquired from Gran
Colombia Gold which is currently under option to IAMGOLD
(TSX:IMG)
Concurrent $7,000,000 equity financing at $0.45 with a lead order from Gran Colombia Gold
of - $3,000,000
- Gran Colombia Gold to provide in-country
operational expertise to advance projects forward
VANCOUVER, Sept. 24, 2020 /CNW/ - ESV Resources
Ltd. (the "Company") (TSXV: ESV.H) announces that it
will engage in the exploration, development and mining of
silver-gold projects and it has entered into letters of intent
(collectively, the "LOIs"), each dated effective
September 23, 2020, with Gran
Colombia Gold Corp. (TSX:GCM) ("Gran Colombia") and 1255269 B.C. Ltd. (the "Guia Antigua
Vendor") to acquire its first two projects, both located in
historic mining districts in Colombia. The LOIs outline the
general terms and conditions by which the Company will concurrently
acquire (collectively, the "Transaction") the Zancudo
Project from Gran Colombia, as well as all of the outstanding share
capital of the Guia Antigua Vendor which controls the Guia Antigua
Project.
Each of the Company, Gran Colombia, the Guia Antigua Vendor and
all the shareholders of the Guia Antigua Vendor are at arms-length,
and the Transaction will constitute a change of business and a
reverse-takeover for the Company in accordance with the policies of
the TSX Venture Exchange (the "Exchange"). Assuming
completion of the Transaction, it is anticipated that the
Company will be listed on the Exchange as a Tier 2 Mining
Issuer. In connection with completion of the Transaction, it
is anticipated that the Company will change its name to "Denarius
Silver Corp.".
Guia Antigua Project
The Guia Antigua Project encompasses the exploration,
development and mining rights to a 386-hectare area located in the
eastern part of Gran Colombia's Segovia mining title focused on the
Guía Antigua vein which falls
outside the areas associated with Gran Colombia's mining operations
and exploration activities. The Guia Antigua Project is located 130
kilometers northeast of Medellin
(227 kilometers by road) in the Segovia-Remedios mining district,
Department of Antioquia, north-western Colombia and is about five kilometers east of
the town and mining centre of Segovia.
The Guia Antigua Project includes the historic silver-gold
producing Guia Antigua Mine. Artisanal miner development work on
two levels over a 150 meter strike length define the historical
Guia Antigua Mine. There has been no mechanized mining of the Guia
Antigua vein. The Guia Antigua Mine was operated by an unknown
company prior to 2014 and by Sociedad Guias Gold, a private
company, under contract with Gran Colombia from October 2014 through October 2016. Recorded production was 6,034
metric tons of ore with an average head grade of 404.90 g/t silver
and 6.05 g/t gold containing 78,558 ounces of silver and 1,173
ounces of gold, with a silver-gold ratio of 67. The prior
production is not known and there has been no additional production
since 2016.
The Guía Antigua vein is a
high-grade silver-gold vein which is oriented
sub-parallel to an aphanitic dyke
hanging wall and highly weathered
foliated metamorphic footwall within the Upper Jurassic
Segovia Batholith. There is a systematic increase in the silver
grade and the silver-gold ratio from west to east in the Segovia
mining title. From 2014 to 2016, Sociedad Guias Gold carried out
systematic channel sampling of the Guia Antigua Mine. A short drill
program of 1,753.9 m was carried out
in 2018-19.
The Guia Antigua Vendor is a privately-held British Columbia corporation, established for
the purposes of holding an interest in the Guia Antigua
Project. Aside from its interest in the Guia Antigua Project,
the Guia Antigua Vendor has no assets or material financial
liabilities or obligations.
Zancudo Project
The Zancudo Project consists of a 1,052-hectare mining
concession area located in the Titiribi mining district in
Antioquia, Colombia, about 27
kilometers southwest of Medellin.
Zancudo comprises a historical gold mine (the Independencia Mine)
located in the Middle Cauca Gold Belt. The estimated total
historical production dating back to 1793 is 1.5 to 2.0 Mozs of
gold equivalent with recovered grades of 14.6 g/t Au and 108 g/t
Ag. The Independencia Mine exploited an epithermal intermediate
sulphidation type vein system over 3.5 kilometers strike length and
to a depth of approximately 300 meters.
Gran Colombia acquired Zancudo
in 2010 and completed a 14,000 meter drilling program in 2011 and
2012. In March 2017, Gran Colombia
signed an option agreement with IAMGOLD Corp. ("IAMGOLD")
for the exploration and potential purchase of an interest by
IAMGOLD in Zancudo. Under the agreement, IAMGOLD has been granted
an option to acquire an initial undivided 65% interest (the
"First Option") in Zancudo by incurring an aggregate of
US$10 million of mineral exploration
expenditures over a six-year period, subject to meeting specified
annual work commitments during this period. From 2017 through
2019, IAMGOLD has completed a total of approximately 16,224 meters
of drilling at Zancudo and has incurred over US$4 million of its exploration commitment.
However, due to COVID-19, IAMGOLD has suspended its drilling
program thus far in 2020. IAMGOLD has also been granted an
additional option (the "Second Option") to acquire a further
5% undivided interest, for an aggregate 70% undivided interest in
Zancudo, by completing a feasibility study within three years after
exercising the First Option. Upon exercise of the First Option or
the Second Option, as the case may be, the parties will form a
joint venture to hold Zancudo, to advance the exploration and, if
feasible, to advance the development and mining of any commercially
exploitable ore body.
In conjunction with its exploration campaign, IAMGOLD has
implemented a number of ESG initiatives in the local community at
Zancudo, including a beekeeping project focused on providing
training to local beekeepers, improving efficiency in honey
production and marketing support.
Terms of the Transaction
Under the terms of the Transaction, shareholders of the Guia
Antigua Vendor will be issued 15,000,000 common shares of the
Company in exchange for all of the outstanding share capital of the
Guia Antigua Vendor, and concurrently Gran Colombia will be issued
27,000,000 common shares of the Company in consideration for the
assignment of its interest in the Zancudo Project. In
addition to any escrow restrictions imposed by the policies of the
Exchange, all common shares issued to the shareholders of the Guia
Antigua Vendor and to Gran Colombia will be subject to a voluntary
pooling arrangement from which one-quarter of the shares will be
released on each of December 28,
2020, March 27, 2021,
June 27, 2021 and September 27, 2021.
Concurrent Financing
As a condition to completing the Transaction, the parties intend
to complete a non-brokered private placement financing (the
"Concurrent Financing") to raise up to $7,000,000 through the issuance of up to
15,555,000 subscription receipts of the Guia Antigua Vendor at a
price of $0.45 per subscription
receipt. It is anticipated that Gran Colombia will subscribe
for $3,000,000 of the Concurrent
Financing.
The proceeds of the Concurrent Financing will be held in escrow,
pending the Company receiving all applicable regulatory approvals
and completing the Guia Antigua Transaction. Upon
satisfaction of the escrow conditions, immediately prior to
completion of the Transaction, each subscription receipt will
automatically convert into one common share of the Guia Antigua
Vendor for no additional consideration and will be exchanged for
common shares of the Company on a one-for-one basis. If the
Transaction is not completed on or before December 31, 2020, the proceeds of the Concurrent
Financing will be returned to the subscribers. Finder's fees
may be payable to arm's length parties who introduce subscribers to
the Concurrent Financing, in accordance with the policies of the
Exchange. It is anticipated that the proceeds from the
Concurrent Financing will be utilized to undertake an exploration
program at the Guia Antigua project, and for the general and
administrative expenses of the Company.
Following the closing of the Transaction and the Concurrent
Financing, the Company expects to have approximately 88,199,912
common shares issued and outstanding.
Board of Directors and Management Changes
On completion of the Transaction, the Company's board of
directors and management team will be reconstituted to consist of
the following individuals:
Jeff Couch, Director
Mr. Couch is a financial services executive with extensive
experience in the natural resources sector having advised and
raised capital for clients globally, with a particular focus in
emerging markets. Currently Mr. Couch is working with Orion
Resource Partners, a mining focused private equity firm. Orion has
over $6 billion under management, and
specializes in institutional metals and mining investment
strategies in the base and precious metals space. Mr. Couch has
worked with several financial services firms in Europe, including being Head of Investment
Banking Europe for BMO Capital Markets (Bank of Montreal). Mr. Couch has also had senior
investment banking roles with Credit Suisse Europe and Citigroup
(Solomon Brothers). He has public
board experience in both the London Stock Exchange and Toronto
Exchange, and has advised several governments on their natural
resources capital requirements.. He holds both an undergraduate
business degree and a law degree.
Frederic Leigh,
Director
Mr. Leigh is the principal of a private British Columbia company providing
fundraising, investor relations and advisory services. He has over
10 years of experience with companies in the mining and technology
sectors worldwide, acting in an investor relations and advisory
role for a number of publicly listed companies.
Paul Sparkes, Director
Mr. Sparkes is an accomplished business leader and entrepreneur
with over twenty five years of experience in media, finance,
capital markets and Canada's
political arena. He spent a decade as a leader in the
broadcast and media industry as CTVglobemedia's Executive Vice
President, Corporate Affairs. He also held senior positions in
public service, including with the Government of Canada as Director of Operations to Prime
Minister, Jean Chretien, and as a
senior aide to two Premiers of Newfoundland and Labrador. Mr. Sparkes was a co-founder
and executive vice chairman at Difference Capital Financial and
serves on a number of private and public boards. He is currently
President of Otterbury Holdings Inc., and is an advisor and deal
maker for growth companies in the private and public markets.
Serafino Iacono,
Director
Mr. Iacono is an entrepreneur and business person who has either
founded or been the head of several different
companies operating in the mining and natural resources
sector. He is currently the Executive Chairman of Gran Colombia
Gold Corp., Executive Chairman and Chief Executive Officer of
Caldas Gold Corp. (a subsidiary of Gran Colombia Gold Corp.), Chief
Executive Officer and Executive Director at CruzSur Energy Corp.
and Chairman of Western Atlas Resources, Inc. Mr. Iacono is also on
the board of Pacific Infrastructure Ventures, Inc. and Sociedad
Portuaria Puerto Bahia SA and Member of Blue Pacific Investments
Group Ltd.
Lombardo Paredes-Arenas,
Director
Mr. Paredes-Arenas currently serves as Chief Executive Officer
of Gran Colombia Gold Corp. and brings over 20 years of corporate
leadership and operations management experience in the resource
sector in Latin America. Before becoming an independent
consultant on energy and environmental project development, Mr.
Paredes held several roles with within Petroleos de Venezuela (PDVSA). He was responsible
for regional planning of investments and social development for
Eastern Venezuela, and was
Managing Director and a Board Member of Maraven S.A. (an affiliate
of PDVSA), with responsibility for the construction and
commissioning of the Cardon Refinery Conversion Project in
Venezuela, a US$2.6 billion project. He was also General
Manager of its Production Operations Division, with 5,000 employees
and oil production of 800,000 barrels per day. Mr. Paredes
holds Bachelor of Science in Mechanical Engineering and Master of
Economic Analysis and Financial Economics degrees.
In addition to the above appointees to the board and management,
Mr. Augusto Garcia will be appointed
President of the Company's Colombian subsidiary. Mr. Garcia is a
Colombian lawyer with more than 40 years experience in both the
private and public sector. He has had multiple managerial
positions, including Deputy Minister of Mines of Colombia, Deputy of Cormagdalena, Deputy
Ambassador for Colombia in
Spain, Vice President of
Corporacion Financiera del Norte, and President of Carbones
Colombianos del Cerrejón.
The Company is currently evaluating candidates for the roles of
Chief Executive Officer and Chief Financial Officer.
Shareholder Approval
Approval of the shareholders of the Company will not be required
in connection with the Transaction, in accordance with Exchange
Policy 5.2, as the Transaction does not involve related parties and
no other circumstances exist which may comprise the independence of
the Company or other interested parties. The Company is
without active operations, is not subject to a cease trade order or
trading suspension, and shareholder approval is not required for
the Transaction under applicable corporate or securities laws.
Upon completion of the Transaction, Gran Colombia will become a
new "control person" of the Company. If required by the
policies of the Exchange, the Company will obtain shareholder
approval for the creation of a new control person by way of written
consent of the majority of the outstanding common shares of the
Company prior to completion of the Transaction.
Sponsorship
Sponsorship of the Transaction is required by Exchange Policy
2.2, unless an exemption from the sponsorship requirement is
available. The Company will be seeking a waiver of any
requirement for a sponsor in connection with the Transaction.
Further Information
Closing of the Transaction is subject to a number of conditions
including the satisfactory completion of due diligence, the
negotiation and entering into of definitive agreements, the
completion of the Concurrent Financing, receipt of all required
shareholder, regulatory and third-party consents, including
Exchange approval, and satisfaction of other customary closing
conditions. The Transaction and Concurrent Financing cannot
close until the required approvals are obtained. There can be
no assurance that the Transaction and Concurrent Financing will be
completed as proposed or at all. Except in connection with
the Concurrent Financing, no finders' fees or commissions are
payable in connection with completion of the Transaction, and no
advances or loans to the Guia Antigua Vendor or Gran Colombia are
contemplated prior to completion of the Transaction. An
administrative fee of 840,000 common shares is owing to Fiore
Management & Advisory Corp., an arms-length consultant, in
consideration for the provision of certain financial and advisory
services necessary to complete the Transaction.
In connection with the Transaction, the Guia Antigua Vendor and
Gran Colombia have commissioned updated geological reports on the
Guia Antigua and Zancudo Projects (collectively, the
"Geological Reports"). Prior to completion of the
Transaction, copies of the Geological Reports will be filed and
posted on SEDAR. Further information on the Transaction will
be available and posted on SEDAR upon completion of a filing
statement that will be prepared by the Company.
Trading in the common shares of the Company will remain halted
pending further filings with the Exchange.
Qualified Person
The scientific and technical data contained in this press
release was reviewed and prepared under the supervision of Dr.
Stewart D. Redwood, BSc(Hons), PhD, FIMMM, FGS, Consulting
Geologist, is a Qualified Person under National Instrument 43-101
Standards of Disclosure for Mineral Projects. Dr. Redwood
has reviewed and approved the data related to the exploration
information disclosed in this news release.
On Behalf of the Board of Directors,
ESV RESOURCES LTD.
The TSX Venture Exchange has in no way passed upon the merits
of the proposed Transaction and has neither approved nor
disapproved the contents of this press 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 release.
Completion of the Transaction is subject to a number of
conditions, including but not limited to Exchange acceptance and
shareholder approval, if applicable. The Transaction and Concurrent
Financing cannot be completed until such approvals are obtained.
There can be no assurance that the Transaction will be completed as
proposed or at all.
Investors are cautioned that, except as disclosed in the
filing statement to be prepared in connection with the Transaction,
any information released or received with respect to the
Transaction may not be accurate or complete and should not be
relied upon. Trading in the securities of the Company should
be considered highly speculative.
Statements included in this announcement, including
statements concerning our plans, intentions and expectations, which
are not historical in nature are intended to be, and are hereby
identified as, "forward–looking statements".
Forward–looking statements may be identified by words
including "anticipates", "believes", "intends", "estimates",
"expects" and similar expressions. The Company cautions readers
that forward–looking statements, including without
limitation those relating to the Company's future operations and
business prospects, are subject to certain risks and uncertainties
that could cause actual results to differ materially from those
indicated in the forward–looking statements.
SOURCE ESV Resources Ltd.
