Subject: FINANCING AGREEMENTS
Revival Gold Announces Agreement on Former Beartrack Mine and $10 Million Brokered and Non-Brokered Private Placement
TORONTO, ONTARIO--(Marketwired - Sept. 7, 2017) -
NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
Revival Gold Inc. (TSX VENTURE:RVG) ("Revival" or the "Company") is pleased to announce the execution of an earn-in and related stock purchase agreement (the "Agreement") with Meridian Gold Company ("Meridian"), a subsidiary of Yamana Gold Inc., by which Revival may acquire a 100% interest in Meridian Beartrack Co. ("Meridian Beartrack"), owner of the Beartrack Gold Project ("Beartrack" or, the "Project") located in Lemhi County, Idaho. The Agreement is subject to regulatory approval.
Beartrack is a former producing gold mine that was the subject of renewed exploration activity by Meridian in 2012 and 2013. The Project encompasses 3,496 acres (1,415 hectares) and hosts five known mineralized areas within a five-kilometer strike length along the Panther Creek Fault. Mineralization is open to the south-west and at depth.
The Project is situated approximately four miles east of Revival's Arnett Creek Gold Project and will serve as the Company's base for exploration drill hole core logging and storage for both Beartrack and Arnett Creek.
Revival may acquire Meridian Beartrack by making a cash payment of US$250,000, delivering four million shares of Revival, spending US$10 million on exploration and funding certain remediation costs during a four-year earn-in period. Upon completion of the acquisition Revival will assume future site remediation and closure obligations. Revival will also be required to provide a 1% NSR royalty and pay the greater of US$6 per ounce of gold in mineral resource or US$15 per ounce of gold in mineral reserve on all ounces outlined over the next seven years.
Revival and Meridian Beartrack have applied to re-commence exploration at Beartrack and expect to receive approval from the U.S. Forest Service to start drilling shortly.
"This transaction is a major step forward in the growth of Revival's brownfields exploration and development portfolio and builds on the Company's existing property position in Lemhi County, Idaho," said Hugh Agro, President and CEO. "Key members of our team have a long history and deep familiarity with Beartrack and Revival is therefore well positioned to immediately capitalize on the opportunity."
Beartrack
The Beartrack open pit heap leach mine was operated by Meridian Beartrack from 1994 until 2000 and produced approximately 600,000 ounces of gold. The mine achieved a life-of-mine recovery of 87% based on the cyanide-soluble grade from oxide material during heap leaching operations. Beartrack was closed at a time when the gold price was below US$300 per ounce.
In 2011 Meridian Beartrack completed an internal review and estimated a remaining resource of 26.6 million tonnes at an average grade of 1.51 g/t gold containing approximately 1,299,000 ounces of gold (the "Historical Resource Estimate"). The Historical Resource Estimate was unclassified and did not use the categories ("inferred", "indicated" or "measured" mineral resource, or "probable" or "proven" mineral reserve) set out in Sections 1.2 and 1.3 of NI 43-101 as defined by the Canadian Institute of Mining, Metallurgy an Petroleum ("CIM"). Although the Historic Resource Estimate is unclassified, based on the rigorous nature of the methodology employed in making the estimate, the resource estimate could be categorized as an historic inferred mineral resource.
The Historic Mineral Resource was estimated in a block model using exploration drill hole gold assay data and production blast hole drilling gold assay data to define gold grade shells. Polygons representing lithologies were generated using geologic contacts defined by exploration drilling and refined by pit geologic mapping. Fixed down-hole gold assay composites of 25 feet (7.6 meters) were created for the estimation of gold grade into model blocks measuring 25 feet (7.6 meters) by 25 feet by 25 feet. Composite variography was completed to define anisotropy parameters for block grade estimation within the lithologic polygons using ordinary kriging. The block model was constructed based on geological and operational experience gained mining oxide mineralization at Beartrack. A cut-off grade of 0.03 ounces per ton (1.03 grams gold per tonne) was used for the Historic Resource Estimate.
A Qualified Person has not completed sufficient work to verify the Historic Resource Estimate. A Qualified Person has not done sufficient work to classify the Historic Resource Estimate as current mineral resources and Revival Gold is not treating the Historic Resource Estimate as current mineral resources. The Historic Resource Estimate is global in nature and has not been classified in the CIM categories, as required by NI 43-101. Revival Gold has not undertaken any data verification of the historical data upon which the Historic Resource is based. The Historic Resource Estimate is the most recent resource estimate currently available regarding Beartrack. The Historic Resource Estimate is only relevant to obtain a reference to gold mineralization potential at Beartrack. The Project will require further evaluation (including confirmation drilling and metallurgical test work) to upgrade any material in the Historic Resource Estimate to NI 43-101 Mineral Resources or Mineral Reserves.
Earn-In Agreement
Under the terms of the Agreement, Revival may acquire a 100% interest in Meridian Beartrack, owner of the Beartrack Gold Project, over a four-year earn-in period by undertaking the following:
- Making a cash payment of US$250,000 and delivering 1 million shares of Revival on the Agreement becoming effective;
- Delivering a further 1 million shares of Revival at the end of each of the first, second and third year of the Agreement (total of an additional 3 million shares);
- Expending US$10 million in exploration over four years, US$2 million per year in each of the first and second year and US$3 million per year in each of the third and fourth year;
- Funding out-of-pocket costs associated with remediation of past operating activities in years three and four of the Agreement (estimated to be approximately US$850,000 each year);
- Completing a mineral resource estimate prepared in accordance with NI 43-101 and making a cash payment equal to the greater of US$6 per ounce of gold in mineral resource or US$15 per ounce of gold in mineral reserve based on the mineral reserve and mineral resource estimate at the end of year seven which includes all mineral resources or mineral reserves discovered and determined during the four-year earn in period and a three-year period post earn-in; and,
- Upon completion of the acquisition of Meridian Beartrack, Revival will also provide a 1% NSR and assume all future site remediation and closure obligations relating to the Project.
During the term of the Agreement, Meridian Beartrack, shall continue to be responsible for providing financial surety for bonding requirements in respect of past operating activities with Revival funding the applicable out-of-pocket costs of such surety in years three and four as indicated above.
During the term of the Agreement, Revival shall be permitted to use Beartrack site infrastructure including roads, power, drilling water and the exploration warehouse facility.
Financing
In connection with the Agreement, Revival has entered into a marketed financing agreement with PI Financial Corp. and Medalist Capital Ltd. to complete a brokered private placement of up to 12,000,000 units (each a "Unit") at a price of C$0.60 per Unit for gross proceeds of C$7,200,000 (the "Brokered Financing"). Each Unit will consist of one common share ("Common Share") and one-half of one share purchase warrant (a "Warrant"). Each whole warrant will entitle the holder to acquire one Common Share for C$0.90 for a period of two years. The lead agents will have an over-allotment option to increase the offering size by 1,800,000 Units.
In addition, Revival intends to complete a non-brokered private placement on the same terms as the Brokered Financing consisting of up to 4,000,000 Units at a price of C$0.60 per Unit for gross proceeds of C$2,400,000 (the "Non-Brokered Financing"). The Non-Brokered Financing is subject to an over-allotment option, allowing Revival to issue additional 600,000 Units.
The Brokered Financing and the Non-Brokered Financing are subject to regulatory approval.
Estimated net proceeds from the Brokered and Non-Brokered Financing of C$9 million will be used to fund approximately 11,000 meters of core drilling, geological analysis, metallurgical testing and project management over the next two field seasons at Beartrack.
Next Steps
Exploration permitting preparations are underway. Subject to regulatory approval, Revival expects the Agreement to become effective and the Private Placement to close by September 26th, 2017. Exploration at Beartrack will commence shortly thereafter.
Steven T. Priesmeyer, B.Sc., M.Sc., C.P.G., Vice-President Exploration, Revival Gold Inc., is the Company's designated Qualified Person for this news release within the meaning of National Instrument 43-101 Standards of Disclosure for Mineral Projects and has reviewed and approved its scientific and technical content.
About Revival Gold Inc.
Revival Gold Inc. (formerly Strata Minerals Inc.) is a growth focused gold exploration and development company. The Company has executed an agreement whereby it may acquire a 100% interest in Meridian Beartrack Co., owner of the Beartrack Gold Project located in Lemhi County, Idaho. Revival also owns a 100% interest in the neighbouring Arnett Creek Gold Project.
In addition to its interests in Beartrack and Arnett Creek, the Company is pursuing other gold exploration and development opportunities and holds a 51% interest in the Diamond Mountain Phosphate Project located in Uintah County, Utah.
Additional disclosure of the Company's financial statements, technical reports, material change reports, news releases and other information can be obtained at www.revival-gold.com or on SEDAR at www.sedar.com.
Cautionary Statement
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 or accuracy of this news release.
This News Release includes certain "forward-looking statements". These statements are based on information currently available to the Company and the Company provides no assurance that actual results will meet management's expectations. Forward- looking statements include estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as "believes", "anticipates", "expects", "estimates", "may", "could", "would", "will", or "plan". Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results relating to, among other things, the ability to complete the acquisition of the Beartrack Project and the related financings, the relevance and reliability of the historical Beartrack Project resource estimate, results of exploration, project development, reclamation and capital costs of the Company's mineral properties, and the Company's financial condition and prospects, could differ materially from those currently anticipated in such statements for many reasons such as: the inability to complete the acquisition of the Beartrack Project and related financings on the terms as announced or at all; the historical Beartrack Project resource estimate may not be relevant or reliable; changes in general economic conditions and conditions in the financial markets; changes in demand and prices for minerals; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological and operational difficulties encountered in connection with the activities of the Company; and other matters discussed in this news release. This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. The Company does not undertake to update any forward-looking statement that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities laws.
This news release does not constitute an offer to sell or a solicitation of an offer to sell any of securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
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