District Metals Corp. (TSX-V: DMX; "District" or the
“Company”) is pleased to announce the Company has executed
a definitive purchase agreement dated February 27, 2020 (the
"
Purchase Agreement") with a wholly-owned
subsidiary of EMX Royalty Corp. (TSX-V:EMX)
("
EMX") to acquire 100% ownership of the Tomtebo
and Trollberget properties (together, the
"
Properties") (Figure 1) in the prolific
Bergslagen District of Sweden, which hosts Lundin’s Zinkgruvan Mine
and Boliden’s Garpenberg Mine. Upon completion of the
proposed transaction, the Company's primary focus will be on the
advanced exploration stage Tomtebo Property.
The proposed transaction constitutes a
"Fundamental Acquisition" as such term is defined in Policy 5.3 of
the TSX Venture Exchange (the "Exchange" or the
"TSXV"). As a result, completion of the
proposed transaction is subject to, among other things, the
completion of an updated technical report prepared in accordance
with National Instrument 43-101 – Standards of Disclosure for
Mineral Projects ("NI 43-101") on the Tomtebo
Property, and obtaining all necessary regulatory approvals,
including Exchange acceptance. The common shares of the Company
will remain halted until the Exchange has reviewed the proposed
transaction in accordance with Exchange Policy 5.3.
Garrett Ainsworth, President & CEO of
District, commented: “These Swedish properties provide District
with significant opportunities in the prolific Bergslagen District,
which is known for its large tonnage and high grade Volcanogenic
Massive Sulphide (VMS) and Sedimentary Exhalative (SedEx) deposit
types. Tomtebo, in particular, underwent a rigorous due diligence
process, which revealed immense potential. The
Bergslagen District has substantial polymetallic production and
endowment that is evidenced by the numerous historical and active
mines, which has seen little modern systematic exploration compared
to peer districts. Access and infrastructure on the
properties and in the region are highly accommodative. Sweden
is a stable and supportive jurisdiction for mining that is ranked
highly by the Fraser Institute. We are also excited to
partner with EMX Royalty Corp. to advance these
properties.”
Tomtebo Property Highlights
- Tomtebo covers an area of 5,144 ha, and is located 175 km
northwest from the capital city of Stockholm in Sweden (Figure
1).
- Boliden’s Garpenberg Mine is located 25 km to the southeast,
and the historic Falun Mine is located 25 km to the northwest.
Lundin’s Zinkgruvan Mine is located 175 km to the
southwest.
- Tomtebo contains similar host rocks, structure, alteration, and
mineralization styles as the Garpenberg, Falun, and Zinkgruvan
Mines.
- Two historic mines, and numerous mineralized prospects are
situated along a 17 km trend on the property. Mineralization
at the historic Tomtebo and Lovas Mines appears to be open in all
directions.
- Historic production at the Tomtebo Mine comprised 120,000
tonnes at 4.4% Cu1. Historic production at the Lovas Mine
comprised 330,000 tonnes at 3.5% Zn, 2.5% Pb, and 30g/t Ag2.
- Drilling from the 1960’s and 1970’s resulted in a historic
mineral resource on the Tomtebo Mine from surface to 200 m depth
that comprises 385,000 tonnes grading 0.67% Cu, 1.84% Pb, 3.72% Zn,
0.66 g/t gold, and 55 g/t Ag3. This is a historic
resource for the purposes of NI 43-101, and a Qualified Person has
not done sufficient work to classify the historic resource above as
current mineral resources or mineral reserves, and District is not
treating the historical estimate as current mineral resources or
mineral reserves. District considers these results as
indications of the presence of mineralization on the property, and
will use the information to guide future exploration.
- Development work and mining at the historical Tomtebo and Lovas
Mines reached depths of 200 m and 190 m, respectively. Mining
operations at Boliden’s Garpenberg Mine and Lundin Mining’s
Zinkgruvan Mine are currently at depths of 1400 m and 1200 m,
respectively.
- Modern systematic exploration has never been carried out on the
Tomtebo Property.
Trollberget Property
Highlights
- The Trollberget property covers an area of 333 ha, and is
located 15 km northeast from Tomtebo and 17 km east of the historic
Falun Mine (Figure 1).
- Trollberget is an early stage property that strategically
covers the same host rocks, structure, alteration, and
mineralization as the Garpenberg, Falun and Zinkgruvan
Mines.
- Several polymetallic mineralized prospects on the property
warrant detailed follow up.
- Two historic channel samples4 located approximately 25 m apart
returned:
- 1.5 m at 21.4% Zn, 1.8% Pb, 1.3% Cu, 131 g/t Ag and 2.3 g/ t
Au.
- 2.0 m at 9.9% Zn, 1.2% Pb, 0.7% Cu, 85 g/t Ag and 0.2 g/ t
Au.
The Purchase Agreement
Pursuant to the Purchase Agreement, District
will acquire a 100% interest in the Properties upon the following
principal terms:
- At closing of the proposed transaction DMX will:(i) make a cash
payment of $35,000 to EMX; and (ii) issue EMX approximately
3,688,965 common shares of DMX, representing a 9.9% equity
ownership in DMX (on a non-diluted basis).
- To retain the Properties, DMX must:
(i) incur $1,000,000 of eligible expenditures on the Properties
within two years of the closing of the proposed transaction; and
(ii) complete a minimum of 2,000 m of drilling within three years
of completion of the proposed transaction and an aggregate of 5,000
m within five years of completion of the proposed transaction.
- Upon announcement of each of a
mineral resource estimate and preliminary economic assessment, DMX
will pay to EMX a fee of $275,000 and, in the absence of either or
both a mineral resource estimate and/or preliminary economic
assessment, an aggregate of $550,000 upon a development decision,
in each case, in either cash or common shares of DMX (based on the
20 day volume weighted average trading price of DMX's common
shares).
- Until the first to occur of the
five-year anniversary of the closing of the transaction and DMX
completing a financing raising gross proceeds of at least $3
million, EMX is entitled to maintain its shareholding in DMX for no
additional consideration.
- DMX will grant EMX a 2.5% NSR
royalty on each of the Properties subject to an option to
repurchase up to 0.5% of the royalty for $2,000,000 at any time
within six years of the closing of the proposed transaction and in
respect of which DMX will make annual advance royalty payments of
$25,000 commencing on the third anniversary of the closing of the
proposed transaction, with each payment increasing by $10,000 per
year subject to maximum of $75,000 per year.
In addition, upon closing of the proposed
transaction EMX and DMX will enter into a shareholder rights
agreement pursuant to which:
(i) |
for so long as it holds at least 9.9% of the issued and outstanding
shares of the Company (on a non-diluted basis), EMX will be
entitled to nominate one director to the Company's board of
directors; |
|
|
(ii) |
for so long as it holds at least 5.0% of the issued and outstanding
shares of the Company (on a non-diluted basis), EMX will have a
pre-emptive right in respect of future financings by the
Company; |
|
|
(iii) |
for so long as it holds at least 9.9% of the issued and outstanding
shares of the Company (on a non-diluted basis), EMX will be subject
to a standstill provision; and |
|
|
(iv) |
for so long as it holds at least 9.9% of the issued and outstanding
shares of the Company (on a non-diluted basis), EMX may not sell or
transfer common shares of the Company representing 1% or more of
the outstanding common shares of the Company in any 30 day period
without advance notice to the Company and if the Company fails to
identify a purchaser for such shares, only sell such shares by way
of a broad distribution, through the facilities of an exchange or
trading system. |
As consideration for identifying the Tomtebo and
Trollberget properties and facilitating completion of the proposed
transaction, Vector Geological Solutions, a "non-arm's length
party" to the Company will be issued 500,000 common shares in the
capital of the Company as a finder’s fee (the "Finder's Fee
Shares"). The issue of the Finder's Fee Shares is
subject to Exchange acceptance and, if so accepted, will be subject
to a hold period of four months and one day.
District Metals Corp. is pleased to announce
that our corporate website has been updated at
www.districtmetals.com where our new corporate presentation is now
available.
A figure accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/38fa95d1-437e-4e51-9554-c2b15253d57e
Note: The nearby mines provide
geologic context for Tomtebo and Trollberget, but this is not
necessarily indicative that the Properties host similar grades or
tonnages of mineralization.
References
1 Ed. Eilu, Pasi, 2012, Geological Survey of
Finland, Special Paper 53, Metallogenic areas in Sweden, p.
154.
2 Geological Survey of Sweden report grb_097,
1997.
3 Technical Report on Tomtebo Mine, Birger
Hellegren, 1983.
4 Tumi Resources Ltd. News Release, September 4,
2007. True widths of the channel samples are unknown.
5 Allen, R.L., Lundström, I., Ripa, M., and
Christofferson, H., 1996, Facies analysis of a 1.9 Ga, continental
margin, back-arc, felsic caldera province with diverse
Zn-Pb-Ag-(Cu-Au) sulfide and Fe oxide deposits, Bergslagen region,
Sweden: Economic Geology, v. 91, p. 979–1008.
6
https://www.boliden.com/globalassets/operations/exploration/mineral-resources-and-mineral-reserves-pdf/2019/resources_and_reserves_garpenberg_2019-12-31.pdf
Technical Information
All scientific and technical information in this
news release has been prepared by, or approved by Garrett
Ainsworth, PGeo, President and CEO of the Company. Mr.
Ainsworth is a qualified person for the purposes of National
Instrument 43-101 - Standards of Disclosure for Mineral
Projects.
Mr. Ainsworth has not verified any of the
information regarding any of the properties or projects referred to
herein other than the Tomtebo and Trollberget Properties.
Mineralization on any other properties referred to herein is not
necessarily indicative of mineralization on the Tomtebo and
Trollberget Properties.
On Behalf of the Board of Directors
“Garrett Ainsworth”
President and Chief Executive Officer
604-628-2669
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
Cautionary Statement Regarding “Forward-Looking”
Information.
This news release contains certain statements
that may be considered “forward-looking statements” with respect to
District Metals Corp. (“District Metals” or the “Company”) within
the meaning of applicable securities laws. In some cases, but not
necessarily in all cases, forward-looking information can be
identified by the use of forward-looking terminology such as
“plans”, “targets”, “expects” or “does not expect”, “is expected”,
“an opportunity exists”, “is positioned”, “estimates”, “intends”,
“assumes”, “anticipates” or “does not anticipate” or “believes”, or
variations of such words and phrases or state that certain actions,
events or results “may”, “could”, “would”, “might”, “will” or “will
be taken”, “occur” or “be achieved”. In addition, any statements
that refer to expectations, predictions, indications, projections
or other characterizations of future events or circumstances
contain forward-looking information. Statements containing
forward-looking information are not historical facts but instead
represent management’s expectations, estimates and projections
regarding future events.
Forward-looking statements relating to District
Metals include, among other things, statements relating to:
timing of the closing of the proposed acquisition of the Tomtebo
Project including receipt of all regulatory approvals and
satisfaction of all other conditions precedent; completion of the
expenditure requirements thereunder, future commodity prices;
District Metals’ planned exploration activities including costs,
timing and results thereof; the adequacy of the Company’s financial
resources and ability to raise additional funds as and when
required and on reasonable terms; and timing, receipt and
maintenance of all required approvals, consents and permits under
applicable legislation.
These statements and other forward-looking
information are based on opinions, assumptions and estimates made
by District Metals in light of its experience and perception of
historical trends, current conditions and expected future
developments, as well as other factors that the Company believes
are appropriate and reasonable in the circumstances, as of the date
of this news release, including, without limitation, assumptions
about the receipt of all regulatory approvals to the completion of
the proposed transaction; satisfaction of all conditions precedent
to completion of the acquisition of the Properties; the Company’s
ability to raise sufficient capital to fund planned exploration
activities, maintain corporate capacity and satisfy the
exploration expenditure requirements required by the Purchase
Agreement by the times specified therein (failing which the
Properties will be forfeited without any repayment to the Company);
and stability in financial and capital markets.
Forward-looking information is necessarily based
on a number of opinions, assumptions and estimates that,
while considered reasonable by District Metals as of the date such
statements are made, are subject to known and unknown risks,
uncertainties, assumptions and other factors that may cause the
actual results, level of activity, performance or achievements to
be materially different from those expressed or implied by such
forward-looking information, including but not limited to the
following factors: a number of conditions precedent must be
satisfied for the acquisition of the Properties to be completed
(including regulatory approval); the risk that the Company will be
unable to raise sufficient capital to maintain its mineral tenures
and concessions in good standing, finance planned exploration
(including incurring prescribed exploration expenditures required
by the Purchase Agreement) and for general corporate purposes, the
risk that the Company will not be able to explore and develop the
Properties; the risk that if the required exploration expenditures
are not incurred by the time specified therefor the Properties will
be forfeited without any repayment of the purchase price;
management and conflicts of interest; fluctuations in demand for,
and prices of gold, silver and copper; inherent risks of
exploration for mineral deposits, including that commercial
quantities or grades of minerals may not be discovered; risks
associated with the uncertainty of estimates of mineral resources
governmental regulations, particularly those applicable to the
mineral exploration and development industry; environmental laws
and regulations and associated risks, including climate change
legislation; land reclamation requirements; the ability to obtain
and maintain necessary rights, concessions and permits; risks of
operating in a foreign jurisdiction and through foreign
subsidiaries; a dependence on ability to attract and retain
qualified management; limitations of insurance and uninsured risks;
public social activism against companies undertaking natural
resource development; risks associated with First Nations
relations; competition; legal proceedings and the enforceability of
judgments; anti-corruption and bribery regulations;; market events
and general economic conditions globally; currency exchange rate
risks; These factors and assumptions are not intended to represent
a complete list of the factors and assumptions that could affect
District Metals. These factors and assumptions, however, should be
considered carefully.
Although the Company has attempted to identify
factors that would cause actual actions, events or results to
differ materially from those disclosed in the forward-looking
statements or information, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended. Also, many of such factors are beyond the control of the
Company. Accordingly, readers should not place undue reliance on
forward-looking statements or information. The forward-looking
information is made as of the date of this news release, and the
Company assumes no obligation to publicly update or revise such
forward-looking information
District Metals (TSXV:DMX)
Historical Stock Chart
Von Nov 2024 bis Dez 2024
District Metals (TSXV:DMX)
Historical Stock Chart
Von Dez 2023 bis Dez 2024