VANCOUVER, BC--(Marketwired - March 20, 2017) - Sarama Resources Limited (TSX VENTURE: SWA) ("Sarama" or the "Company") announced today that it has completed its previously announced warrant exercise incentive program (the "Incentive Program"). The Incentive Program was implemented to encourage the early exercise of warrants originally issued between May 30 and July 4, 2014 (collectively, the "Original Warrants"), each exercisable at C$0.20.
Since the announcement of the Incentive Program on February 16, 2017, an aggregate of 7,263,333 Original Warrants have been exercised, resulting in gross proceeds to the Company of C$1,452,666.60. The proceeds from the early exercise of the Original Warrants will be used to advance the exploration of the Company's resource properties and to fund administrative expenses.
In connection with the Incentive Program, the Company issued an aggregate of 3,615,040 incentive warrants, exercisable until March 17, 2019 at a price of C$0.35 each to acquire an aggregate of 3,615,040 additional common shares of the Company ("Incentive Warrants").
Sun Valley Gold Master Fund, Ltd. ("Sun Valley") is a related party of the Company as a result of owning approximately 15% of the Company's outstanding Shares. Sun Valley exercised an aggregate of 2,500,000 Original Warrants and received an aggregate of 1,250,000 Incentive Warrants. Mr. Andrew Dinning, a director and President and Chief Executive Officer of the Company exercised 500,000 Original Warrants and received an aggregate of 250,000 Incentive Warrants. Mr. Sean Harvey, the Chairman of the Company exercised 400,000 Original Warrants and received an aggregate of 200,000 Incentive Warrants. Other directors and executive officers of the Company exercised a combined 231,833 Original Warrants and received an aggregate of 115,916 Incentive Warrants.
The participation in the Incentive Program by, and issuance of Incentive Warrants to Sun Valley and the Company's directors and executive officers constituted a "related party transaction" as defined in Canadian Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions, which has been adopted by the TSX Venture Exchange pursuant to its Policy 5.9 - Protection of Minority Security Holders in Special Transactions (the "61-101 Policy"). However, the Incentive Program is exempt from the formal valuation and minority shareholder approval requirements of such instrument and policy, as the Company's Shares are listed on the TSX Venture Exchange and, in respect of the minority shareholder approval requirement, neither the fair market value of the additional Incentive Warrants, nor the consideration to be received for the Incentive Warrants exceeds 25% of the Company's market capitalization.
ABOUT SARAMA RESOURCES LTD
Sarama Resources Ltd (TSX VENTURE: SWA) is a West African focused gold explorer with substantial landholdings in Burkina Faso. Sarama is focused on consolidating under-explored landholdings in Burkina Faso and other established mining jurisdictions.
Sarama's flagship properties are situated within the Company's South Houndé Project area in south-west Burkina Faso. Located within the prolific Houndé greenstone belt, Sarama's exploration programs have built on significant early success to deliver an inferred mineral resource estimate of 2.1 Moz gold1, 2 Acacia Mining plc is earning up to a 70% interest in the South Houndé Project by satisfying certain conditions, including funding earn-in expenditures of up to US$14 million, over a 4-year earn-in period and may acquire an additional 5% interest, for an aggregate 75% interest in the Project, upon declaration of a minimum mineral reserve of 1.6 million ounces of gold.
Sarama holds a 31% participating interest in the Karankasso Project Joint Venture ("JV")3 which is situated adjacent to the Company's South Houndé Project in Burkina Faso and is a JV between Sarama and Savary Gold Corp. ("Savary"). Savary is the operator of the JV and in October 2015, declared a maiden inferred mineral resource estimate of 671,000 ounces of contained gold4, 5 at the Karankasso Project JV.
Sarama has also agreed to acquire a 100% interest in the Bondi gold deposit from Orezone Gold Corporation (refer news release May 24, 2016). Bondi has a historical estimate of mineral resources of 0.3Moz Au (measured and indicated) and 0.1Moz Au (inferred)6, 7.
Together, the South Houndé Project, Bondi deposit and the Karankasso Project form a cluster of advanced gold deposits, within trucking distance of one another, which potentially offers a development option for a multi-source fed central processing facility in the southern Houndé Belt region of Burkina Faso.
Incorporated in 2010, the Company's Board and management team have a proven track record in Africa and a strong history in the discovery and development of large-scale gold deposits. Sarama is well positioned to build on its current success with a sound exploration strategy across its property portfolio.
1 43.0 Mt @ 1.5 g/t Au (reported above cut-off grades ranging 0.3-2.2 g/t Au, reflecting the mining methods and processing flowsheets assumed to assess the likelihood of the inferred mineral resources having reasonable prospects for eventual economic extraction)
2 The effective date of the Company's inferred mineral resource estimate is February 4, 2016. For further information regarding the mineral resource estimate please refer to the technical report titled "NI 43-101 Independent Technical Report South Houndé Project Update, Bougouriba and Ioba Provinces, Burkina Faso", dated March 31, 2016. The technical report is available under Sarama Resources Ltd.'s profile on SEDAR at www.sedar.com.
3 Sarama has 31% and Savary has 69% ownership interests.
4 9.2 Mt @ 2.3 g/t Au (at a 0.5 g/t Au cut-off)
5 The effective date of the Karankasso Project JV mineral resource estimate is October 7, 2015. For further information regarding the mineral resource estimate please refer to the technical report titled "Technical Report and Resource Estimate on the Karankasso Project, Burkina Faso", dated October 7, 2015. The technical report is available under Savary Gold Corp's profile on SEDAR at www.sedar.com.
6 4.1Mt @ 2.1g/t Au for 282,000 oz Au (measured and indicated) and 2.5Mt @ 1.8g/t Au for 149,700 oz Au (inferred), reported at a 0.5 g/t Au cut-off
7 The effective date of the historical estimate of the Bondi deposit mineral resource estimate is February 20, 2009. For further information regarding the mineral resource estimate please refer to the technical report titled "Technical Report on the Mineral Resource of the Bondigui Gold Project", dated February 20, 2009. The technical report is available under Orezone Gold Corporation's profile on SEDAR at www.sedar.com.
