Aurum Lake Mining Announces Agreement For Proposed Qualifying Transaction
TSX-V: ARL.P
TORONTO, Dec. 21, 2022 - Aurum Lake Mining Corp. ("Aurum Lake" or the "Company") announces that it has entered into an agreement dated December 19, 2022 (the "Option Agreement") with Transition Metals Corp. (the "Optionor"). Pursuant to the Option Agreement, the Optionor has granted the exclusive right and option (the "Option") to the Company to acquire a 100% interest of the Optionor's rights to certain mineral claims known as the Homathko Gold Project, located in the Province of British Columbia (the "Property").
Aurum Lake is a "capital pool company" under the policies of the TSX Venture Exchange (the "Exchange") and the Option Agreement with the Optionor will constitute its "Qualifying Transaction" (the "Transaction") in accordance with Exchange Policy 2.4 - Capital Pool Companies ("Policy 2.4"). Upon completion of the Transaction, Aurum Lake expects to be listed as a Tier 2 Mining Issuer on the Exchange.
Terms of the Transaction
Pursuant to the Option Agreement, the Optionor will retain a net smelter royalty of 2.0% on all mineral production on the Property and the Option is also subject to an underlying net smelter royalty of 1.0% on tenures 1010863, 761502 and 761522 to Nova Royalty Corp.
In consideration of the grant of the Option, the Company will pay a total of $470,000 to the Optionor in cash payments per the schedule listed below, incur work program expenditures on the Property totalling $500,000 over two years, and make a one-time $5,000,000 lump sum payment to the Optionor upon the commencement of commercial production, in addition to making such payments as necessary to keep the Property in good standing during the term of the Option.
The cash payments will be made as follows:
| (i) | $20,000 on signing; |
| (ii) | an additional $100,000 three days following the date the Option Agreement is accepted for filing by the Exchange (the "Effective Date"); |
| (iii) | an additional $150,000 on the first anniversary of the Effective Date; and |
| (iv) | an additional $200,000 on the second anniversary of the Effective Date. |
The work program expenditures will be made in accordance with the following schedule:
| (i) | $100,000 by the first anniversary of the Effective Date; and |
| (ii) | a cumulative total of $500,000 by the second anniversary of the Effective Date. |
The Option Agreement and the Transaction are subject to a number of conditions including, but not limited to, receipt of all required regulatory approvals, including Exchange approval. The Transaction will be an arm's length transaction, and accordingly, will not require approval of the shareholders of Aurum Lake.
The Property
The Property is located in the Cariboo Region of British Columbia, approximately 57 kilometres south of the community of Tatla Lake, which lies 222 kilometres west of Williams Lake. The Property comprises of 35 contiguous mineral claims, encompassing a total of 30,971 hectares. Over its history, multiple mineralized veins were discovered in this area with high-grade gold values.
Concurrent Financing
In connection with the Transaction, the Company is anticipating that it would complete a concurrent private placement (the "Concurrent Financing"), the terms of which will be determined at a later date. The Company intends to use the net proceeds of the Concurrent Financing to fund the acquisition costs of the Transaction, to fund the work program expenditures as detailed in the NI 43-101 (as defined below) technical report and to fund the general working capital expenses of the resulting issuer. Aurum Lake will issue a subsequent news release once the Company has finalized the terms of the Concurrent Financing in accordance with Policy 2.4.
Directors and Management
The current directors of the Company will all remain as directors of the Company following the completion of the Transaction.
Sponsorship
Aurum Lake intends to make an application to the Exchange to have the requirement for sponsorship of the Transaction waived. There can be no assurance that the waiver will be granted. In any event, an agreement to sponsor should not be construed as any assurance with respect to the merits of the Transaction or the likelihood of its completion.
Trading Halt
In accordance with Exchange policies, Aurum Lake's common shares are currently halted for trading and will remain so until completion of the Transaction. Aurum Lake expects to provide an update with respect to the Property and the proposed Qualifying Transaction in a subsequent press release in accordance with Policy 2.4.
Qualified Person
George Wesley Roberts is a "qualified person" in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") and has reviewed and approved the technical information contained in this news release.
Forward-Looking Statements
This press release may contain certain "forward-looking statements." Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These forward-looking statements or information may relate to the Transaction and various approvals required in connection with the Transaction, the reliability of third-party information and other factors or information Any forward-looking statement speaks only as of the date of this news release and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise.
Completion of the Transaction is subject to a number of conditions, including, but not limited to, Exchange acceptance and, if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
Neither TSX Venture Exchange nor its Regulations 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.
SOURCE Aurum Lake Mining Corp.
Contact
Patrick Sapphire, Chief Executive Officer, Phone: 647-530-1117