Advance Gold Reaches Agreement in Principle with Acacia Mining - Barrick Wants to Renegotiate Terms Since Agreeing To Takeover Of Acacia
TSX VENTURE: AAX
Kamloops, British Columbia--(Newsfile Corp. - August 1, 2019) - Advance Gold Corp. (TSXV: AAX) ("Advance Gold" or "the Company") wishes to report that having reached a signed agreement in principle with Acacia Mining plc ("Acacia") concerning the existing joint venture between Acacia and Advance Gold respecting the Gold Rim property in Kenya, during the period of the proposed takeover of Acacia by Barrick Gold Corp. ("Barrick), Advance Gold has been notified that Barrick would like to renegotiate the terms of the agreement in principle.
Two of the three claims that make up the joint venture are to the east and west of Acacia's 100% owned property. The joint venture covers approximately ⅔ of the Liranda Corridor, with Acacia's 100% property making up the remaining ⅓ of the corridor. Acacia has spent approximately $70 million on exploration and development on the Liranda Corridor, with $5 million spent on the joint venture ground and the remainder on Acacia's 100% owned property.
The Liranda Corridor is in an Archean craton setting, with a large deep-seated structure, and high-grade gold zones. One of the highest-grade intersections on the Liranda Corridor came from the joint venture ground, returning 6 metres of 30.9 g/t gold, see April 18/2016 news release. The remaining key exploration question for the joint venture ground is concerning the continuity of the high-grade gold zones which will require further exploration drilling.
Allan Barry Laboucan, President and CEO of Advance Gold Corp., commented: "After months of negotiations to come to terms on an agreement in principle concerning Advance Gold's purchase of the Acacia interest in the joint venture, it is disappointing that Barrick now want to renegotiate the terms. The agreement in principle included no cash payments up front, or stock at any time, a one-time $3 million payment upon commercial production and a sliding scale royalty. The terms of the agreement would allow us to focus funds on exploration and was something we could move on. The joint venture ground is highly prospective having the key criteria on a target like this, including the right age of the rocks, a large deep-seated structure that runs throughout 2 of the 3 claims in the joint venture. Most importantly, it has high-grade gold mineralization drill confirmed in several areas as set out in the news release of April 18/2016 and is open for exploration to advance the known zones along strike and at depth, as well as exploring for potentially more zones. We will assess our various options that are described below. We are keenly eager to advance the Kenya projects, but it must be on the right terms with funds focused on exploration not on "upfront" cash payments, for us the funds need to be focused on exploration drilling to move the Kenya projects forward."
The joint venture is owned 85.37% by Acacia and 14.63% by Advance Gold. If during the joint venture either party decides to sell their interest, the other party has a first right of refusal on any offering price. If Advance Gold is diluted down to a 10% interest (approximately $1.7 million in exploration to dilute to an NSR), then its interest converts to a 3% uncapped net smelter royalty (NSR). In the event that Advance Gold is diluted to an NSR, Acacia Mining has no first rights of refusal and the NSR can be sold directly to any interested party. Both parties have the right to dilute the other down if the other party decides to not contribute exploration funds.
Julio Pinto Linares is a QP, Doctor in Geological Sciences with specialty in Economic Geology and Qualified Professional No. 01365 by MMSA., for Advance Gold and is the qualified person as defined by National Instrument 43-101 and he has read and approved the accuracy of technical information contained in this news release.
About Advance Gold Corp. (TSXV: AAX)
Advance Gold is a TSX-V listed junior exploration company focused on acquiring and exploring mineral properties containing precious metals. The Company acquired a 100% interest in the Tabasquena Silver Mine in Zacatecas, Mexico in 2017, and the Venaditas project, also in Zacatecas state, in April, 2018.
The Tabasquena project is located near the Milagros silver mine near the city of Ojocaliente, Mexico. Benefits at Tabasquena include road access to the claims, power to the claims, a 100-metre underground shaft and underground workings, plus it is a fully permitted mine.
Venaditas is well located adjacent to Teck's San Nicolas mine, a VMS deposit, and it is approximately 11km to the east of the Tabasquena project, along a paved road.
In addition, Advance Gold holds a 14.63% interest on strategic claims in the Liranda Corridor in Kenya, East Africa. The remaining 85.37% of the Kakamega project is held by Acacia Mining (63% owned by Barrick Gold Corporation).
For further information, please contact:
Allan Barry Laboucan,
President and CEO
Phone: (604) 505-4753
Corporate website: www.advancegold.ca
This news release contains certain statements that may be deemed "forward-looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. The Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors should change, except as required by law.