TORONTO, ONTARIO--(Marketwired - May 23, 2017) - Galane Gold Ltd. ("Galane" or the "Company") (TSX VENTURE:GG) is pleased to announce that it has entered into a letter of intent (the "LOI") for the acquisition of all of the outstanding shares of Vantage Goldfields Limited ("Vantage"), a gold mining company with operations in the Mpumalanga Province of South Africa (the "Acquisition").
The LOI establishes the terms of the acquisition as between the parties and is expected to be followed by the execution of a binding acquisition agreement (the "Acquisition Agreement") setting forth the detailed terms of the Acquisition and containing conditions customary in transactions of this nature including completion of satisfactory legal and technical due diligence, delivery by Vantage of a 43-101 technical report and receipt of all other necessary regulatory or third party approvals including the approval of the TSX Venture Exchange and approval of the Business Rescue Practitioner according to applicable legislation in South Africa. The final structure of the Acquisition will be determined by Galane and Vantage to accommodate various legal, tax and accounting considerations. The LOI is not binding (other than certain provisions including exclusivity obligations) and may be terminated by, among other things, mutual consent or if the Acquisition Agreement and related transaction documents have not been entered into by June 16, 2017. Further details regarding the Acquisition including the consideration to be paid for the outstanding Vantage shares shall be provided in connection with the announcement of the signing of the Acquisition Agreement.
CEO Nick Brodie stated, "This represents another significant step towards Galane's stated goal to reshape the Company into a long-life and low-cost operation that can produce positive returns for investors across commodity cycles. The Vantage mines are located within 30 kilometres of our existing operations at Galaxy Gold and obvious synergies exist between the two operations. We hope to leverage these synergies to create an operating asset in the Barberton area which, together with the Company's Galaxy property, is expected to result in a combined resource exceeding 5,800,000 ounces, production of over 160,000 ounces per annum and an all in sustaining cost of less than US$900 per ounce." (1)(2)(3)
Vantage Description
Vantage is an Australian company with mining assets located on the Barberton Greenstone Belt ("BGB"), proximate to the town of Barberton in the Mpumalanga Province of South Africa and includes several historical mining operations on the BGB as well as prospecting rights covering an area of approximately 160 km2.
Vantage's Barbrook Mine and Lily Mine suspended operations in 2016 due to financial difficulties and were placed in Business Rescue, a form of creditor protection pursuant to the laws of South Africa. A plan has been agreed with Vantage management and the Business Rescue Practitioner that would see operations recommence within 90 days of the completion of the Acquisition.
The historical estimate set out in the table below (the "Historical Estimate") was disclosed in a report provided by Vantage to the Company with an effective date of January 1, 2015 entitled "An Independent Competent Persons' Report on Vantage Goldfields Limited, Mpumalanga Province, South Africa".
| Mineral Resource Category | Tonnes | Grade | Content |
| (t) | (g/t) | (oz) | |
| Measured | 10,541,000 | 2.54 | 861,600 |
| Indicated | 11,039,000 | 3.14 | 1,100,200 |
| Inferred | 23,510,000 | 3.15 | 2,381,300 |
| Note: |
| 1. All figures are quoted at 100% and not attributable with respect to ownership. |
| Mineral Reserve Category | Tonnes | Grade | Content |
| (t) | (g/t) | (oz) | |
| Proved | 685,000 | 2.89 | 64,000 |
| Probable | 6,408,000 | 2.68 | 552,900 |
| TOTAL | 7,093,000 | 2.71 | 616,900 |
| Notes: |
| 1. Mineral reserves are included in mineral resources. |
| 2. Grade and tonnes reported to plant - head grade. |
| 3. Rounding may cause some apparent discrepancies in totals. |
| 4. All figures are quoted at 100% and not attributable with respect to ownership. |
The Historical Estimate was prepared in accordance with the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (July 2009 Amended Edition) and does not comply with the CIM Definition Standards on Mineral Resources and Mineral Reserves as required by National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"). The Qualified Person reviewing this release believes that there is no material difference in the definitions. The report was prepared by a well-known South African advisory company that offers a wide range of exploration, mining, management, valuation, financing and advisory services. A qualified person has not done sufficient work to classify the Historical Estimate as current mineral resources or mineral reserves in accordance with NI 43-101. The issuer is not treating the Historical Estimate as current mineral resources or mineral reserves and the Historical Estimate should not be relied on.
The business of mining and mineral exploration, development and production by their nature contain significant operational risks. The business depends upon, amongst other things, successful prospecting programmes and competent management. Profitability and asset values can be affected by unforeseen changes in operating circumstances and technical issues. Factors such as political and industrial disruption, currency fluctuation and interest rates could have an impact on future operations, and potential revenue streams can also be affected by these factors. The majority of these factors are, and will be, beyond the control of any operating entity.
More recent estimates or data is not available. The Company intends to verify the Historical Estimate based on a NI 43-101 technical report to be delivered prior to the closing of the Acquisition. Work required to upgrade or verify the Historical Estimate as current mineral resources or mineral reserves will be based on recommendations in the NI 43-101 report. The Company will also prepare a mine plan based on recommendations in the NI 43-101 report.
1 Information regarding the quantity of gold produced historically is based on available public sources, has not been independently verified by the Company and should not be relied upon as a predictor of future results.
2 This is a forward looking statement and is based on a number of assumptions and risks, including the Company's ability to successfully complete and integrate the acquired assets; gold price volatility; risks associated with proposed activities in South Africa; regulatory, consent or permitting delays; risks and unknowns inherent in all mining projects, including the inaccuracy of metallurgical recoveries and capital and operating costs of such projects; and operating or technical difficulties in connection with mining or development activities.
3 The technical disclosure regarding the Galaxy Gold mine is reported in the technical report entitled "A Technical Report on the Galaxy Gold Mine, Mpumalanga Province, South Africa" which was issued January 4, 2016 with an effective date of September 1, 2015 (the "Galaxy Technical Report"), and was prepared by Minxcon (Pty) Ltd and approved by Daniel van Heerden, B Eng (Min.), MCom (Bus. Admin.), Pr. Eng., FSAIMM, AMMSA, a Qualified Person as defined by National Instrument 43-101 ("NI 43-101"). The Galaxy Technical Report satisfies the requirements to be a pre-feasibility study and was reviewed by the Directors of Minxcon (Pty) Ltd, specifically, Daniel van Heerden; Uwe Engelmann, BSc (Zoo. & Bot.), BSc Hons (Geol.), Pr.Sci.Nat., MGSSA; Dario Clemente, NHD (Ext. Met.), GCC, BLDP (WBS), MMMA, FSAIMM; and Johan Odendaal, BSc (Geol.), BSc (Min. Econ.), MSc (Min. Eng.), Pr.Sci.Nat., FSAIMM, MGSSA, all of whom are Qualified Persons as defined by NI 43-101 and independent of Galane Gold for the purposes of NI 43-101. The Galaxy Technical Report can be found under the Company's profile on SEDAR (www.sedar.com) and on the Company's website (www.galanegold.com).
About Galane
Galane is an un-hedged gold producer and explorer with mining operations and exploration tenements in Botswana and South Africa. Galane is a public company and its shares are quoted on the TSX Venture Exchange and the Botswana Stock Exchange under the symbol "GG". Galane's management team is comprised of senior mining professionals with extensive experience in managing mining and processing operations and large-scale exploration programmes. Galane is committed to operating at world-class standards and is focused on the safety of its employees, respecting the environment, and contributing to the communities in which it operates.
