Cava Resources to Acquire Company with Alluvial Gold & Platinum Mining Projects
TSX VENTURE: GDBO
Toronto, Ontario--(Newsfile Corp. - September 29, 2017) - Cava Resources Inc. (TSXV: CVA) ("Cava" or the "Company") is pleased to announce that it has entered into a letter of intent to purchase all of the issued and outstanding shares of Gold Rush Cariboo Inc. ("Gold Rush"), which is an arm's length transaction.
Gold Rush, which was incorporated in 2012 to evaluate and acquire properties in the Cariboo region of B.C., has entered into an agreement with Goldlands Inc. ("Goldlands") to purchase an alluvial gold and platinum mining project known as The Horseshoe Bend project consisting of one Placer Lease and six Placer Claims totaling 254.9 acres. In addition, Gold Rush has an option to acquire an additional 16 adjacent properties totaling approximately 8,000 acres which are held by Goldlands.
- Acquisition & Option on over 16 alluvial gold properties in southwest British Columbia comprising over 8,000 acres
The properties are all located in southwest British Columbia just north of Likely, BC, approximately 52 kilometres southeast of Quesnel, BC in the heart of the historic Likely- Barkerville Gold Camp. Historic placer gold production in the Cariboo has been estimated at 2.5 to 3 million ounces as of 19931. The placer gold was recovered from pre -glacial and inter glacial gravels in buried paleo channels of modern stream valleys. These placer deposits have been speculated to originate from underlying bedrock gold deposits and considerable exploration has been directed at exploring for the source of these placer deposits. Historic production and recent exploration success by neighbouring Barkerville Gold Mines Ltd. and by Spanish Mountain Gold Ltd. indicate the potential for additional multi-million ounce gold discoveries in this region.2
1. From Levson and Giles (1993). Geology of Tertiary and Quaternary Gold-Bearing Placers in the Cariboo Region, British Columbia (93A, B, G, H). British Columbia Ministry of Energy and Mines Bulletin 89.
2. The presence of bedrock mineralization on the Barkerville and Spanish Mountain properties is not necessarily indicative of placer mineralization on the Horseshoe Bend project.
The Horseshoe Bend project is located approximately 26 kilometres northwest of Likely, B.C, and is readily accessible by four-wheel drive.
Gold Rush's agreement with Goldlands provides for the following terms:
- convertible promissory note in the amount of $2,250,000, which would be convertible into common shares of Cava at a conversion price of $0.40 per share for a total of 5,625,000 common shares if fully converted;
- Goldlands retains a 2.5% net smelter royalty of which 1.0% is available for purchase by Gold Rush; and
- enter into an exclusive supply and purchase agreement with Goldlands for the supply and purchase of certain specialized gold processing equipment for the mining and processing of mineralization from the Horseshoe Bend Property, for a purchase price of $1,150,000. Goldlands has developed specialized gold processing equipment and has utilized it extensively in the Likely and Barkerville-Cariboo districts over the last 30 years.
With regards to the 16 optioned properties, Gold Rush has a period of up to two years in which it has the right to carry out geological testing and sampling and then it can elect to exercise an option to purchase any or all of the 16 properties. Goldlands retains the same payment terms plus an agreed net smelter royalty as described above
Pending execution of a definitive agreement, Cava has agreed to purchase all of the existing and outstanding shares of Gold Rush. Terms of the acquisition are the issuance to the Gold Rush shareholders of 12,600,000 common shares of Cava. A valuation of the assets to be acquired has not been completed by Cava. It is not expected that there will be any change to the board of directors of Cava in connection with the completion of the acquisition of Gold Rush.
Cava anticipates signing a definitive agreement on or before October 13, 2017. Completion of the acquisition of Gold Rush is subject to the approval of the TSX Venture Exchange.