RCG Completes Acquisition of Dufferin Gold Mine
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 17, 2016) -
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
Further to its news release of September 9, 2016, Resource Capital Gold Corp., (TSX VENTURE:RCG) ("RCG" or the "Company"), is pleased to announce completion of the acquisition of the Dufferin Gold Mine ("Dufferin") located in Nova Scotia, Canada.
Dufferin was acquired from an arm's length third party for total cash consideration of US$9.5 million plus a net smelter royalty ("NSR") of 1.0%. US$1.1 million of the cash consideration was paid at closing (with US$400,000 already paid in the form of a purchase deposit). The remaining US$8.0 million of the cash consideration will be paid by way of a secured promissory note, payable in equal installments over the five years following closing. The NSR will be payable from the fifth year following closing. The obligations under the promissory note are secured against all of the assets comprising the Dufferin project as well as the shares of Maritime Dufferin Gold Corp. ("MDGC"), the holding company which owns the Dufferin project.
MDGC acquired the right to purchase Dufferin through being assigned an exclusive term sheet from Highlands Geosciences LLC. As consideration for the assignment of the exclusive term sheet to MDGC, RCG paid Highlands US$30,000 and issued Highlands 1,300,000 common shares.
The Dufferin gold mine is a fully permitted operational underground gold mine. The project comprises 874 hectares in 54 mineral claims that are all in good standing. The property contains +17 known east-west trending "saddle reef" quartz vein structures, situated in a vertical assemblage, each hosting free milling gold. These saddle reef structures are open at depth and along strike for over 1.4 kilometers.
The mine is currently on care and maintenance with production last occurring in 2014. RCG has a project turnaround plan and team in place so that production can recommence in approximately 120 days. The mine has a 300 t/day gravity and floatation mill and, with certain upgrades and refurbishment, all necessary infrastructure is in place to conduct full-scale gold mining operations.
The Company has engaged MineTech International Ltd. of Halifax, Nova Scotia, and Global Mineral Resource Services of Vancouver, British Columbia, to prepare a Preliminary Economic Assessment (PEA) of the Dufferin project. Within these areas, drill intercepts have a weighted average grade of 6.1 grams per tonne gold. Grade-control samples taken during previous mining on these same vein structures indicate a weighted average grade of 34.3 grams per tonne gold, compared to the widely spaced drill hole samples of 6.1 grams per tonne. The Company undertook a program of re-assaying underground grade-control samples, which cut across the mineralized quartz vein structures in vertical channel samples taken at three-meter intervals along strike. Coarse rejects from these previous grade-control samples were sent to an independent laboratory (ALS Minerals) for analysis. All results have been received, with the new results validating the previous grade-control samples, in some cases returning higher values. With the grade-control validation testing now complete, the grade-control assay data are now being incorporated into the PEA and a new resource estimate is being prepared.
CORPORATE UPDATE
Debt Settlements
Further to the Company's announcement on August 19, 2016, the Company has now closed the shares for debt transactions whereby the Company issued 6,755,192 shares to ACT2 Pty Ltd ("ACT2), to settle CAD$810,623 of debt; 1 million shares to Cove Street Pty Ltd ("Cove") to settle CAD$120,000 of debt; 1 million shares to Mr. George Young to settle CAD$120,000 of debt; and 100,000 shares to Flintridge Holdings Limited to settle $12,000 of debt. Additional corporate debt was settled by the Company by the transfer to ACT2 of a 10% equity interest in Maritime Gold Corp., the Company's direct subsidiary which owns MDGC, in settlement of C$1,187,500 of debt owing from the Company to ACT2 (with the Company retaining a 90% interest in Maritime Gold Corp. post-transfer). ACT2 is currently the Company's largest shareholder and an insider of the Company, controlled by Gary Lewis, the Company's former Chief Executive Officer. Certain of the debt settlements, including those with ACT2, were considered related party transactions subject to TSX-V Policy 5.9 and Multilateral Instrument 61-101. The Company is exempt from the need to obtain minority shareholder approval and a formal valuation as required by MI 61-101 as the Company is listed on the TSXV and the fair market value of those transactions do not exceed 25% of the Company's market capitalization.
Qualified Person
The scientific and technical data contained in this news release was reviewed and prepared under the supervision of David S. Smith, MS, MBA, CPG, who is a Qualified Person under National Instrument 43-101 Standards of Disclosure for Mineral Projects.
On behalf of the Board of Directors of Resource Capital Gold Corp.
George S. Young, Chairman and CEO
About Resource Capital Gold
Resource Capital Gold Corp. (TSX VENTURE:RCG) is an emerging precious metals developer and producer. The Company's focus is on gold and silver and it has a pipeline of late-stage exploration, development and previously producing assets in Nova Scotia and Nevada.
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 contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking information") within the meaning of applicable securities laws. Forward-looking information is generally identifiable by use of the words "believes," "may," "plans," "will," "anticipates," "intends," "could", "estimates", "expects", "forecasts", "projects" and similar expressions, and the negative of such expressions. Forward-looking information in this news release include statements about the Company's plans for Dufferin.
All forward-looking information herein is qualified in its entirety by this cautionary statement, and the Company disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law.
