Laurion Mineral Exploration Announces Letter of Intent in Regards to Potential Extraction of Gold and Silver Bearing Stockpile Project at Ishkoday
With Non-Brokered Private Placements, Including Immediate Interim Financing for Gross Proceeds of $500,000TORONTO, April 25, 2018 - Laurion Mineral Exploration Inc. (TSX-V:LME) (OTCPINK:LMEFF) (“Laurion” or the “Corporation”) today announced that it has entered into a non-binding letter of intent (the “LOI”) outlining the principal terms and conditions pursuant to which a private investment group (the “Investor”) will finance and otherwise support the development and potential extraction of gold and other metals (such as silver, copper and zinc) from historic surface stockpiles (the “Surface Stockpiles”) located on the Corporation’s wholly-owned Ishkoday property (the Ishkoday Project”) situated 220 kilometres northeast of Thunder Bay, Ontario, as well as the advancement of exploration at the Ishkoday Project.
The Investor will help fund the processing of the Surface Stockpiles pursuant to non-brokered private placements, including an immediate interim financing for gross proceeds of $500,000 to Laurion at a price of $0.07 per unit, each such unit being comprised of one common share and one warrant to acquire one additional common share at a price of $0.09 per share (the “Laurion Private Placement”).
Subject to the execution of binding definitive agreements, the Corporation and the Investor will focus on the processing of the Surface Stockpiles with the intent of potentially extracting the gold content under a subsidiary company (“Newco”). Newco will initially be a wholly-owned incorporated subsidiary of the Corporation, which will sell the Surface Stockpiles to Newco in exchange for additional shares in the capital of Newco.
Cynthia Le Sueur-Aquin, President and Chief Executive Officer of Laurion, commented: “This transaction represents some out-of-the-box thinking as Laurion will work with a Northern Ontario private equity group and mining industry contractor, with a view to potentially creating short-term revenue generation while concurrently defining the model of the near-surface gold and base metals rich target. We are excited to begin work on both the Surface Stockpiles and an exploration program under this arrangement, which are potentially ripe with exciting opportunities.”
Private Placements
Pursuant to the Laurion Private Placement, the Investor will subscribe for common shares in the capital of the Corporation (“Laurion Common Shares”) for an immediate private placement for gross proceeds of $500,000. The subscription price per share of the initial Laurion Private Placement will be $0.07 per unit and any additional private placements will be subject to Market Price and Exchange Policy and will be confirmed at a future date prior to closing. The net proceeds from the Laurion Private Placement, which is expected to close on or about May 20, 2018 or such other date(s) as may be determined by Laurion and the Investor (subject to receipt of all necessary regulatory approvals), are expected to be used for: (i) the completion of an Preliminary Economic Analysis (the “PEA”) in respect of processing and extracting gold and any other valuable materials from the Surface Stockpiles; and (ii) general exploration and development activities of Laurion.
The former Sturgeon River Mine, which produced 73,322 ounces of gold, and 15,929 ounces of silver (1936-1942) from the No. 3 Vein (24 g/t gold), generating a large gold and silver bearing stockpile of 144,070 tonnes in the indicated resource category. (NI 43 -101 – See Press Release April 23, 2013 and the Technical Report filed on SEDAR June 2013).
Subsequent to the completion of the PEA and the Laurion Private Placement, the Investor will subscribe (the “Newco Private Placement” and together with the Laurion Private Placement, the “Private Placements”) for shares in the capital of Newco (“Newco Shares”) for an aggregate subscription price of $4.5 million (the “Newco Private Placement”). The net proceeds from the Newco Private Placement are expected to be used by Newco for the permitting, development and commissioning of the processing facilities that will process the Surface Stockpiles. Following the completion of the Newco Private Placement, Laurion and the Investor will each own an equity interest in Newco of 51% and 49%, respectively.
The Corporation will not be paying any agent or broker commissions or finders’ fees in connection with either of the Private Placements.
The closing of each Private Placement is subject to the approval of the TSX Venture Exchange (the “TSX-V”). All securities issued pursuant to the Laurion Private Placement will be subject to, among other things, a hold period of four months and one day in accordance with applicable Canadian securities laws. The Surface Stockpile Transfer is also subject to the approval of the TSX-V and will be a related party transaction; however, it is expected to be exempt from the formal valuation and minority approval requirements of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions since the fair market value of the Surface Stockpile Transfer insofar as its involves interested parties will not exceed 25% of Laurion’s market capitalization.
Shareholder approval of this transaction is not anticipated. The transaction constitutes an arm's length Reviewable Transaction under TSX-V Corporate Finance Manual Policy 5.3 - Acquisitions and Dispositions of Non-Cash Assets and is subject to the approval of the TSX-V. Furthermore, the consummation of the Reviewable Transaction will not result in a Change of Control, as defined in TSX-V Corporate Finance Manual Policy 1.1. Completion of the Reviewable Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance.
The Ishkoday Project
The Ishkoday Project is a mid-stage exploration project. The Corporation’s emphasis is on the development of its gold-silver and gold-rich polymetallic mineralization with a significant upside potential. The Corporation’s main objective is to validate the existence of a large near surface significant gold-polymetallic target over a 3 km2 area.
The Corporation has designed a strategic three-phased exploration program over the next thirty-six months, which aims at defining a bulk precious and base metal mineralization, concentrating on rapidly defining and expanding near surface mineral resources in gold, silver, zinc and copper. The Laurion Private Placement will permit the execution of: (i) an initial validation exploration program consisting of airborne geophysics covering the 47 km2 Ishkoday Project with an airborne geophysical survey to better define the geological and structural elements of the entire project; (ii) compiling, synthesizing and interpreting all of the project’s technical data, producing a 3-D view of the geology and mineralization, and targeted upside potential; and (iii) followed by a continuous surface stripping, channel sampling and assaying of portions of the 3 km by 1 km main outcrop containing all of the known precious and metals mineralization known to date.
Mineralization on the Ishkoday Project exhibits repetitive stacked gold and zinc-rich sulphides in lenses and veins, visible in the mineralized outcrop exposure, which also contains a material amount of fine and coarse gold. The mineralization appears open at depth beyond the current core drilling limit of -200 m from surface, based on the historical mining to a -685 m depth, as evidenced in the Sturgeon River Mine.
To date, the Corporation has a property-wide database of 283 diamond drill holes totaling 40,729 m, detailed sampling, mapping, assays and geochemical analysis, and ground geophysics.
The Ishkoday Project hosts a series of multi-directional veins (and stockworks). The N-NE vein sets are gold-silver-quartz bearing; whereas the NE-E sets are gold-silver-zinc-copper bearing. The abundance and proximity of these vein sets within a 3 km by 1 km outcrop segment of Ishkoday highlights the probability for near surface bulk metal potential, at the same time offering a volcanogenic massive sulphide metallogenic environment, as well as individual higher gold grade veins that could be developed separately.
Previous work since the 1980’s indicates the presence of hundreds of shears, hence hundreds of veins/horizons, suggesting the potential for material vein stockworks as can be observed at other deposits in Archean Greenstone Belts, such as the Dome, Canadian-Malartic, Detour and Sigma-Lamaque Gold Deposits of the Abitibi Greenstone Belt. In the case of the Ishkoday Project, there appears to be two mineralized systems, one gold-silver-rich and the other gold-silver-zinc-copper.
Mr. Jean Lafleur, P. Geo., Laurion’s Technical Advisor to the Board of Directors, is a Qualified Person as defined by National Instrument 43-101 guidelines, and has reviewed and approved the content of this news release.
About Laurion
Laurion is an exploration discovery Corporation that is primarily focused on the development of its gold-rich polymetallic resource on its Ishkoday property.
The Corporation’s main project mandate is to complete the relevant economic studies, initially working towards the processing the surface rock stockpile; and, to explore and develop the large near surface polymetallic sulphide trends which extend over a 1 km x 3 km area (collective total strike length of 9,000 m), with the aim of demonstrating the existence of a significant volcanic massive sulphide (VMS) deposit, developing tonnage and demonstrating continuity through the execution of multiple phases of diamond drill programs.
FOR FURTHER INFORMATION, CONTACT:
Laurion Mineral Exploration Inc.
Cynthia Le Sueur-Aquin – President and CEO
Tel: 1-705-788-9186
Fax: 1-705-805-9256
Website: http://www.laurion.ca
Caution Regarding Forward-Looking Information
This press release contains forward-looking statements, which reflect the Corporation’s current expectations regarding future events, including with respect to Laurion's business, operations and condition, management's objectives, strategies, beliefs and intentions, the details, anticipated timing and completion of the transactions and other matters described in this press release, including without limitation, the creation of Newco, the Surface Stockpile Transfer, the processing of the Stockpiles and the Private Placements, and the use of the net proceeds from the Private Placements. The forward-looking statements involve risks and uncertainties. Actual events and future results, performance or achievements expressed or implied by such forward-looking statements could differ materially from those projected herein including as a result of a change in the trading price of the Laurion Common Shares, the failure of the relevant parties to enter into definitive agreements in connection with the transactions and other matters contemplated by the LOI, the TSX-V not providing its approvals for the Surface Stockpile Transfer or the Private Placements, the interpretation and actual results of current exploration activities, changes in project parameters as plans continue to be refined, future prices of gold and/or other metals, possible variations in grade or recovery rates, failure of equipment or processes to operate as anticipated, the failure of contracted parties to perform, labor disputes and other risks of the mining industry, delays in obtaining governmental approvals or financing or in the completion of exploration, as well as those factors disclosed in the Corporation’s publicly filed documents. Investors should consult the Corporation’s ongoing quarterly and annual filings, as well as any other additional documentation comprising the Corporation’s public disclosure record, for additional information on risks and uncertainties relating to these forward-looking statements. The reader is cautioned not to rely on these forward-looking statements. Subject to applicable law, the Corporation disclaims any obligation to update these forward-looking statements
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