Arcus Development Group Inc. (TSX-V:ADG) announces that it has entered into a property purchase agreement dated October 22, 2019 with Goldcorp Kaminak Ltd. a subsidiary of Newmont Goldcorp Corporation. Under the terms of the Agreement, Arcus has agreed to sell the Dan Man property to Goldcorp Kaminak. The Dan Man property is comprised of 413 quartz mining claims and is located in the White Gold District of Yukon Territory, immediately north and adjacent to the Goldcorp Kaminak Coffee gold project.
In consideration of the sale of its 100% interest in the Dan Man property, Arcus will receive the following from Goldcorp Kaminak: (i) the return of 14,400,000 Arcus shares originally sold to Newmont Goldcorp in October of 2016 as part of a structured financing; and (ii) a 1% net smelter return royalty interest in any future commercial production from the Dan Man property. Goldcorp Kaminak will have the right to purchase the royalty interest at any time after the closing of the Transaction for $1,000,000. The Agreement also contains customary representations, warranties and covenants for a transaction of this nature.
As a condition of the Transaction, Arcus and Newmont Goldcorp have agreed to terminate an investor rights agreement, dated October 24, 2016. The termination of the Rights Agreement relieves each of Arcus and Newmont Goldcorp of all future rights and obligations, including but not limited to, participation rights in future Arcus financings. The Rights Agreement originally formed part of the October 2016 structured financing.
The completion of the Transaction is subject to: (i) Arcus obtaining an exemption order from the British Columbia Securities Commission exempting Arcus from the issuer bid requirements contained in Part 2 of Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids and (ii) the acceptance of the Transaction by the TSX-Venture Exchange (the “Exchange”). If Arcus is unable to obtain the Exemption Order and Exchange acceptance by December 30, 2019, Goldcorp Kaminak may terminate the Agreement.
Following the closing of the Transaction, the Arcus Yukon property portfolio will consist of the Touleary and the Shamrock properties, both located in the White Gold District.
Arcus has been advised that following the Transaction, Newmont Goldcorp will own no securities of Arcus. Prior to completion of the Transaction, Newmont Goldcorp holds approximately 18.9% of the issued and outstanding common shares of Arcus. A copy of the Early Warning report filed by Newmont Goldcorp in connection with the Transaction will be available on the Arcus SEDAR profile. Newmont Goldcorp’s head office is located at 6363 South Fiddler’s Green Circle, Suite 800, Greenwood Village, Colorado, 80111.
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We acknowledge the [financial] support of the Government of Canada.