VANCOUVER, BC, July 16, 2020 /CNW/ - NxGold Ltd.
("NxGold" or the "Company"), (TSXV: NXN) is pleased
to announce that it has entered into an option agreement with
IsoEnergy Ltd. ("IsoEnergy") (TSXV: ISO) to acquire a 100% interest
in the Mountain Lake uranium project in Nunavut, Canada, subject to relevant
regulatory approvals (the "Option Agreement").
NxGold President and CEO, Philip
Williams commented; "With this acquisition NxGold has taken
another solid step into the uranium sector by adding a high-grade
uranium project in Canada, with
strong upside potential. The team at IsoEnergy completed an
extensive review of the data from previous operators and has left
us with a turnkey exploration plan including geophysics, resampling
core and ultimately drilling."
Terms of the Option Agreement
Under the terms of the Option Agreement, NxGold has the option
to acquire a 100% interest in the Mountain Lake uranium project in
consideration for the issuance of 900,000 common shares at the
5-day volume weighted average price of the common shares (the
"Market Price") following the business day that the TSXV
provides conditional approval of the Option Agreement and payment
of $20,000 cash to IsoEnergy. The
option is exercisable at NxGold's election on or before the second
anniversary of closing, for additional consideration of
$1,000,000 payable in cash or shares
at the Market Price prior to the exercise date and reimbursement of
certain expenditures. If NxGold elects to acquire the Mountain Lake
property, IsoEnergy will be entitled to receive the following
contingency payments, payable in cash or shares:
- If the uranium spot price reaches USD$50, IsoEnergy will receive $410,000
- If the uranium spot price reaches USD$75, IsoEnergy will receive $615,000
- If the uranium spot price reaches USD$100, IsoEnergy will receive $820,000
The spot price contingent payments will expire 10 years
following the date the option is exercised.
In the event the contingency payment has been paid by NXG
following the uranium spot price reaching USD$50, IsoEnergy will have the one-time option
to elect to receive $205,000 in lieu
of, and not in addition to, each of the USD$75 and USD$100
contingent payments for a total aggregate amount of $410,000. Payable at NxGold's option in cash or
shares at the Market Price prior to the date NxGold receives notice
of the election by IsoEnergy.
Further IsoEnergy has the one-time right, exercisable on either
the date that is six (6) months or twelve (12) months following the
date of the Option Agreement, to force NxGold to exercise the
option and satisfy the remaining portion of the purchase price by
issuing such number of NxGold shares to IsoEnergy that results in
IsoEnergy, together with the NxGold shares already owned by
IsoEnergy, owning an aggregate number of NxGold shares equal to
9.9% of the total number of issued and outstanding NxGold Shares
after giving effect to such issuance.
All securities issued in connection with the Option Agreement
are subject to a restricted period of four months and one day from
the date of issuance. Under TSX Venture Exchange policies,
IsoEnergy and NxGold are considered non arms-length parties as the
companies have certain common directors. As a consequence,
common directors Messrs. Leigh Curyer and Trevor Thiele abstained from voting.
The Mountain Lake Uranium Project
The Mountain Lake uranium project consists of 5,625 hectares.
Uranium mineralization is hosted within sandstone and dips
shallowly from the top of the bedrock down to approximately 180
metres below surface.
Discovered in 1976, the property area was the subject of intense
exploration during the 1970s and 1980's, when Acquitaine Company of
Canada and Esso Resources Canada
completed 190 drill holes totalling approximately 22,000 m on the project area. Pitchstone
Exploration Ltd. (Pitchstone) and Triex Minerals Corp. (Triex)
carried out additional exploration during the period 2005-2008,
including the completion of 30 drill holes in the area, 15 of which
were located within or immediately adjacent to the Mountain Lake
deposit itself.
Uranium mineralization at Mountain Lake is hosted within
sandstone of the mid-Proterozoic Dismal Lakes Group within the
Hornby Bay Basin. The deposit is a shallow-dipping (5-10
degrees) tabular zone of strata-bound mineralization that extends
from the top of the bedrock (10-30 metres below surface) down to
approximately 180 metres below surface at its deepest point.
Overall, the mineralization covers an area measuring 1,300 metres
long and up to 320 metres wide. The thickness ranges from 1.0
to 6.5 metres. High grade mineralization is locally present,
with drill intersections returning up to 5.19% U3O8 over 0.9
metres.
Historical Mineral Resource
The Mountain Lake property contains a historical inferred
mineral resource estimate of 8.2 million pounds
U3O8 with an average grade of 0.23%
U3O8 contained in 1.6 million tonnes of
mineralization. The estimate was reported in the technical
report entitled "Mountain Lake Property, Nunavut" prepared for Triex Minerals Corp. and
Pitchstone Exploration Ltd. and dated February 15, 2005. This resource is a
historical estimate and a qualified person has not done sufficient
work to classify the historical estimate as current mineral
resources. As a result, the historical estimate is not being
treated as a current mineral resource. However, the Company
believes that the historical estimate is relevant and reliable, as
it was prepared by a Qualified Person (as defined in National
Instrument 43-101 – Standards of Disclosure for Mineral
Projects) with significant experience on the project, using methods
that were standard in the industry. In order to upgrade or
verify the historical estimate as current mineral resources, the
Company anticipates that it will need to incorporate the drilling
data collected by Triex and Pitchstone in 2006-2008. The
historical resource uses the "inferred mineral resource" category
set out in section 1.2 of National Instrument 43-101. There
are no more recent estimates available to the Company.
The historical estimate was prepared with the polygonal method
using only intervals greater than 0.1% U3O8
with a vertical thickness of at least 1.0 metre. Polygon
sides were determined by drawing lines perpendicular to, and one
half the distance to each adjacent drill hole. Estimated
uranium was then obtained by multiplying the polygon areas by their
thickness, a specific gravity of 2.5, and the grade of the drill
hole interval. The mineral resource was classified as
inferred.
Qualified Person Statement
The scientific and technical information contained in this news
release was prepared by Peter
Mullens (FAusIMM), NxGold's VP Business Development, who is
a "Qualified Person" (as defined in NI 43-101 – Standards of
Disclosure for Mineral Projects). Mr. Mullens has
verified the data disclosed.
About NxGold
NxGold is a Vancouver-based
exploration company. The Company recently entered into options
agreements with Mega Uranium Ltd. (TSX: MGA) to acquire a 100%
interest in the Ben Lomond and Georgetown uranium projects in Australia, and IsoEnergy Ltd. (TSXV: ISO) to
acquire a 100% interest in the Mountain Lake uranium project in
Nunavut, Canada. In addition, the
Company owns 80% of the Mt. Roe gold project located in the Pilbara
region of Western Australia and
has entered into an earn-in agreement with Meliadine Gold Ltd. to
earn up to a 70% interest in the Kuulu Project (formerly known as
the Peter Lake Gold Project) in Nunavut.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
Cautionary Statement Regarding "Forward-Looking"
Information
This news release contains "forward-looking information" within
the meaning of applicable Canadian securities legislation.
"Forward-looking information" includes, but is not limited to,
statements with
respect to activities, events or developments that the Company expects or anticipates will or may occur in
the future including whether the proposed acquisition will be
completed. Generally, but not always, forward-looking information
and statements can be identified by the use of words such as
"plans", "expects", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates", or
"believes" or the negative connotation thereof or variations of such words and phrases or state that certain
actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or
the negative connotation thereof.
Such forward-looking information and statements are based on
numerous assumptions, including among others, that general business
and economic conditions will not change in a material adverse
manner, that financing will be available if and when needed and on
reasonable terms, and that third party contractors, equipment and
supplies and governmental and other approvals required to conduct
the Company's planned exploration activities will be available on
reasonable terms and in a timely manner. Although the assumptions
made by the Company in providing forward-looking information or
making forward-looking statements are considered reasonable by
management at the time, there can be no assurance that such
assumptions will prove to be accurate.
Forward-looking information and statements also involve known
and unknown risks and uncertainties and other factors, which may
cause actual events or results in future periods to differ
materially from any projections of future events or results
expressed or implied by such forward-looking information or
statements, including, among others: negative operating cash flow
and dependence on third party financing, uncertainty of additional
financing, no known mineral reserves or resources, reliance on key
management and other personnel, potential downturns in economic
conditions, actual results of exploration activities being
different than anticipated, changes in exploration programs based
upon results, and risks generally associated with the mineral
exploration industry, environmental risks, changes in laws and
regulations, community relations and delays in obtaining
governmental or other approvals.
Although the Company has attempted to identify important factors that could cause actual results to differ
materially from those contained in the forward-looking information
or implied by forward-looking
information, there may be other factors that cause results not to be as anticipated, estimated or intended.
There can be no assurance that forward-looking information and statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated, estimated or intended. Accordingly, readers should not
place undue reliance on forward-looking statements or information.
The Company undertakes no obligation to update or reissue
forward-looking information as a result of new information or
events except as required by applicable securities laws.
SOURCE NxGold Ltd.
