TORONTO, March 29, 2016 /CNW/ - Lago Dourado Minerals Ltd.
(TSXV:LDM) ("Lago") and GPM Metals Inc. (TSXV:GPM)
("GPM") are pleased to announce that they have agreed upon
terms of the proposed acquisition (the "Acquisition") by
Lago from GPM of GPM's interests in the Sandy Lake district, Northwestern Ontario. These interests include
a 100% interest in 1400 contiguous claim units known as the "East
Block" as well as GPM's right to earn up to a 70% interest in the
Weebigee Project, also known as the "Northwest" claim block
(collectively, the "Project").
The Weebigee Project is a joint venture between GPM and Goldeye
Explorations Ltd (TSXV:GGY) ("Goldeye"), the terms of which
are outlined in a press release of GPM dated April 15, 2015 available on SEDAR at
www.sedar.com.
GPM has agreed to sell its interests in consideration of the
issuance of 40,000,000 common shares of Lago (the "Consideration
Shares"). It is a condition to the completion of the
Acquisition that GPM shall effect a distribution of the
Consideration Shares to its shareholders immediately following the
closing of the Acquisition (the "Share Distribution").
Following the closing of the Acquisition, the board of directors of
Lago shall be increased to consist of five (5) directors, three (3)
of which shall be nominees of Lago and two (2) of which shall be
nominees of GPM. In addition, it is proposed that Lago change its
name to Sandy Lake Gold Inc.
The Project consists of approximately 28,000 hectares of
contiguous exploration rights and covers more than 50 km of strike
length of the Sandy Lake
greenstone belt. The Sandy Lake
greenstone belt is located on the same geological terrain as
Goldcorp Inc.'s world class Musselwhite Mine, however the
Sandy Lake greenstone belt remains
significantly under explored. An aggregate of approximately
3,000 meters of historical exploration drilling had been conducted
between 1932 and 1988. Goldeye completed an exploration
agreement with Sandy Lake First
Nation ("SLFN") in 2013 and conducted a further 2,200
meter shallow drill program reporting significant Au results (see
Goldeye's press release dated April 9,
2014, available on SEDAR at www.sedar.com). Utilizing both
the economic and geological models of the Musselwhite Mine, the
primary exploration target is a 50 km segment of a regional scale
banded iron formation (BIF). Patrick Sheridan, Chief Executive
Officer of GPM, states "This transaction creates a new entity with
a 100% focus on this exciting exploration project. I am sure that
Lago will continue to build upon the existing relations with the
SLFN community and other members of the 1910 Ontario Treaty No.5.
This coveted relationship founded on the basis of respect, dialogue
and cooperation is a vital asset to the success of this
project."
Forbes Gemmell, Chief Executive
Officer of Lago states "This purchase allows existing shareholders
of Lago to participate in the exploration of this exciting gold
district. We look forward to working with Goldeye and other
stakeholders to build upon the strong community relationships."
Further Particulars of the Acquisition
Concurrently with the Acquisition, Lago will complete a private
placement to raise minimum gross proceeds of Cdn$1,000,000, of which a minimum of Cdn$750,000 will be raised pursuant to the sale
of "flow-through" securities and a minimum of Cdn$250,000 will be raised pursuant to the sale
of non-"flow-through" securities (the "Financing"), upon
terms yet to be determined.
The Acquisition will be a "non-arm's length" transaction between
the parties within the meaning of the TSX Venture Exchange
("TSXV") policies and may be subject to a vote of
disinterested shareholders due to the fact that (i) Mr.
Daniel Noone serves as a director of
both Lago and GPM (Mr. Noone owns 102,300 common shares of Lago
representing 1.09% of common shares outstanding and owns 1,642,000
common shares of GPM representing 2.67% of common shares
outstanding); and (ii) Rosseau Asset Management Ltd.
("Rosseau") is a
significant shareholder of both companies (Rosseau owns 2,374,674 common shares of Lago
representing 25.19% of common shares outstanding and owns 9,500,000
common shares of GPM representing 15.44% of common shares
outstanding). Accordingly, Lago will be required to obtain
shareholder approval of the Acquisition in accordance with the
regulations of the TSXV. In addition, GPM will be required to
obtain shareholder approval of the Share Distribution, and may also
be required to obtain shareholder approval of the Acquisition if
required by the TSXV. The boards of directors of each of Lago and
GPM formed special committees comprised entirely of independent
directors in order to consider and make recommendations with
respect to the proposed Acquisition.
The Acquisition remains subject to various conditions including
the execution of a definitive agreement, receipt of all requisite
shareholder, third party and regulatory approvals (including,
without limitation, the approval of the TSXV), and the receipt of
an independent technical report in respect of the Project in a form
acceptable to the TSXV.
Forward Looking Statements
This news release contains certain forward-looking information
and statements within the meaning of applicable securities laws.
The use of any of the words "expect", "anticipate", "continue",
"estimate", "may", "might", "will", "project", "should", "believe",
"plans", "intends" and similar expressions are intended to identify
forward-looking information and/or statements. Forward-looking
statements and/or information are based on a number of material
factors, expectations and/or assumptions of Lago and GPM which have
been used to develop such statements and/or information but which
may prove to be incorrect. Although Lago and GPM believe that the
expectations reflected in such forward-looking statements and/or
information are reasonable, undue reliance should not be placed on
forward-looking statements as neither Lago nor GPM can give any
assurance that such expectations will prove to be correct. In
addition to other factors and assumptions which may be identified
herein, assumptions have been made regarding, among other things:
the completion of the Acquisition and/or Financing either as
currently proposed or at all, the timely receipt of all applicable
shareholder, regulatory and third party approvals, planned
exploration and drilling activities, and any plans of Lago to
exercise the option to acquire an interest in the Weebigee Project;
availability of financing to fund current and future plans and
expenditures; the impact of increasing competition; the general
stability of the economic and political environment; the general
continuance of current industry conditions; future commodity
prices; currency, exchange and/or interest rates; taxes and/or
environmental matters. The forward-looking information and
statements included in this news release are not guarantees of
future performance and should not be unduly relied upon. Such
information and/or statements, including the assumptions made in
respect thereof, involve known and unknown risks, uncertainties and
other factors that may cause actual results and/or events to differ
materially from those anticipated in such forward-looking
information and/or statements including, without limitation: risks
that the Acquisition and/or Financing may not be completed as
currently proposed or at all, risks associated with the uncertainty
of exploration results and estimates, currency fluctuations,
exploration risk, the uncertainty of obtaining all applicable
regulatory approvals, the availability of labour and/or equipment,
the fluctuating prices of commodities, the availability of
financing and dependence on management personnel, other
participants in the property areas and/or certain other risks
detailed from time-to-time in Lago's and/or GPM's public disclosure
documents. Furthermore, the forward-looking statements contained in
this news release are made as at the date of this news release and
neither Lago nor GPM undertakes any obligations to publicly update
and/or revise any of the included forward-looking statements,
whether as a result of additional information, future events and/or
otherwise, except as may be required by applicable securities
laws.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy and / or
accuracy of this release.
SOURCE GPM Metals Inc.