KORE Mining Ltd. (TSX-V: KORE) (OTCQX: KOREF) is pleased to announce plans to transfer all of its British Columbia gold exploration assets into a newly incorporated company: Karus Gold Corp.
Highlights of Karus Gold:
Click here to for a CEO audio clip on the proposed Spin-out.
Following the Spin-out, one hundred percent of Karus Gold common shares will be distributed to KORE shareholders on a pro rata basis to their KORE holdings. Karus Gold will not initially be listed on a public stock exchange but will operate as a reporting issuer in British Columbia and Alberta. In early 2021, Karus Gold intends to conduct a rights offering to all Karus shareholders to initially capitalize the company, followed by a planned public stock exchange listing in the first half of 2021. Karus Gold would have the advantage of the ongoing drilling at Gold Creek and results from the completed FG Gold drill program expected to be released through Q1 2021.
The Spin-out would enable KORE’s shareholders to realize the expected growth and returns from exploration investment through direct ownership in Karus Gold. Upon completion of the Spin-out, KORE will continue as a leading gold company with a focus on growing and developing the Imperial and Long Valley gold projects. The transaction is supported by Mr. Eric Sprott, KORE’s largest shareholder.
KORE’s CEO Scott Trebilcock stated: “The creation of Karus Gold unlocks value for KORE shareholders, by providing direct exposure to high return exploration in the rapidly emerging Cariboo Gold District. KORE continues to focus on exploration and development of its pipeline of gold assets in California. KORE shareholders will be offered equal access to the initial capitalization of Karus Gold through a planned rights offering in early 2021. KORE shareholders helped the Company achieve strong returns in 2020 and we plan on delivering again in 2021.”
Eric Sprott, KORE’s largest shareholder commented, “I support management teams that actively work to generate shareholder value. I am pleased to support this transaction to daylight value of KORE’s strategic position in the Cariboo Gold District.”
Additional information about Karus Gold is available at www.koremining.com/Karus.
Terms of the Arrangement
KORE has executed an arrangement agreement whereby the business of KORE will be reorganized into two companies by way of a plan of arrangement under the Business Corporations Act (British Columbia). KORE will apply for an interim order from the Supreme Court of British Columbia on or about December 18, 2020, authorizing the Company to call a shareholder meeting to approve the Arrangement.
KORE shareholders will vote on the Arrangement at a special meeting of shareholders which is expected to be held on or about January 20, 2021 at 10:00 am Pacific Time. In light of the ongoing COVID-19 pandemic, the Meeting will be held by way of virtual only format whereby shareholders may participate in the Meeting remotely. To be effective, the Arrangement must be approved by a special resolution passed by at least 66⅔% of the votes cast by KORE shareholders present or represented by proxy at the Meeting and 50% of the disinterested shareholder votes cast by KORE shareholders present or represented by proxy at the Meeting. Each shareholder is entitled to one vote for each KORE common share held.
For purposes of voting on the Arrangement, 2176423 Ontario Ltd. (a corporation beneficially controlled by Mr. Eric Sprott), which holds 25.75% of the Company’s currently issued and outstanding common shares is an insider and control person, will be excluded from the disinterested vote as the sole warrant holder of KORE. Pursuant to the Arrangement, 2176423 Ontario Ltd. will be issued 1,750,000 Karus warrants at an exercise price of $0.75 per Karus Share, exercisable for the same period of time as the KORE warrants.
The Arrangement involves, among other things, the distribution of Karus Shares to KORE shareholders such that each KORE shareholder will hold one Karus Share for every two common shares of KORE held on the effective date of the Arrangement and collectively, KORE shareholders, other than dissenting shareholders, will own 100% of Karus Gold. There will be no change in the number of shareholdings of individual KORE shareholders as a result of the Spin-Out.
After careful consideration, the Board of Directors has unanimously determined that the Arrangement is in the best interests of the Company. A description of the various factors considered by the Board of Directors in arriving at this determination will be provided in the management information circular.
The Arrangement is anticipated to be completed in late January 2021 subject to receipt of required shareholder, court and other approvals and satisfaction of other closing conditions. Further details will be contained in the Circular to be issued in connection with the Meeting, which will be mailed to shareholders in advance of the Meeting following receipt of the interim order. Shareholders of the Company are cautioned that there can be no assurance that the Arrangement will be completed on the terms described herein or at all.
After closing of the Arrangement, new KORE shares will continue trading on the TSX Venture Exchange in Canada under the symbol KORE and on the OTCQX in the United States. Karus Gold Shares will not be listed on a stock exchange after closing of the Arrangement but Karus will be a reporting issuer in British Columbia and Alberta and will comply with its continuous disclosure obligations including press releases and financial reporting. Karus Gold intends to conduct a rights offering to initially capitalize itself, followed by a public stock exchange listing. The Karus Board will consider other opportunities to enhance value including mergers and acquisitions in addition to a potential stock exchange listing.
Karus Gold’s day-to-day activities will be managed by James Hynes as interim CEO, Jessica Van Den Akker as CFO and Corporate Secretary and Michael Tucker as VP Exploration. Mr. Hynes and Mrs. Van Den Akker, will also continue with their KORE responsibilities. Immediately upon the closing of the Arrangement, the Board of Karus Gold will consist of Scott Trebilcock, James Hynes, Marc Leduc and Jessica Van Den Akker. In support of a public stock exchange listing, it is expected that Karus will engage a permanent CEO and appoint new independent Directors.
About KORE’s South Cariboo Exploration Assets
KORE controls a dominant 1,000 square kilometers of claims in its South Cariboo Gold District of British Columbia. The claims host 110 km of structural trend that is highly prospective for gold deposits. The north part of the Cariboo Gold District is controlled by Osisko Development Corp (TSXV: ODV), which is financing a major exploration and development program that will bring attention to the Cariboo Gold District. KORE has multiple projects in the Cariboo Gold District, including the FG Gold and Gold Creek gold projects. Much of the area is under-explored and wide open for additional discoveries. The Cariboo region is a prolific gold region. The Cariboo Gold District was host to the Cariboo gold rush in the late 1800’s, followed by a long history of modern gold mining. The Cariboo region is accessible with local power, a well-developed road network and skilled local labour.
The FG Gold project hosts an orogenic gold deposit on a 20 km trend defined by gold in soils and geophysics. Drilling performed by KORE in 2020 transformed the project, opening up the potential for both open pit and underground type mineralization. The project also hosts copper-gold porphyry mineralization at the Nova Zone, discovered by KORE in 2018. Details of FG Gold Lower Zone discovery including intercepts reported above are detailed in November 11, 2020 Company news release.
The Gold Creek project is an orogenic gold discovery centered on the “Camp Zone” which show similarities to the high-grade zone of the nearby Spanish Mountain Gold Deposit (TSXV:SPA). The Camp Zone’s near surface mineralization currently extends over 400 metres along strike and is open along both strike and at depth. KORE is currently drilling a 2,000-meter program to expand Gold Creek.
In connection with the transaction, the Company and Karus will file an updated National Instrument 43-101 compliant Technical Report titled “Technical Report on the South Cariboo Property, British Columbia, Canada” effective November 15, 2020, prepared by independent qualified persons Ron Voordouw, P.Geo., Henry Awmack, P. Eng., and Equity Exploration Consultants Ltd (the “Updated Report“). The Updated Report replaces the previously filed technical report issued to Eureka Resources Inc. in 2015 and amends prior disclosure regarding mineral resources on the FG Gold and Gold Creek gold projects. The Updated Report will be available on the Company’s website at www.koremining.com/Karus and under KORE’s profile on SEDAR at www.sedar.com.
About KORE Mining
KORE is 100% owner of a portfolio of advanced gold exploration and development assets in California and British Columbia. KORE is supported by strategic investor Eric Sprott who recently invested $7.0 million, bringing his total ownership to 26%. KORE management and Board are aligned with shareholders, owning an additional 38% of the basic shares outstanding. KORE is actively developing its Imperial Gold project and is aggressively exploring across its portfolio of assets.
Goliath Resources Limited (TSX-V: GOT) (OTCQB: GOTRF) (Frankfurt:... READ MORE
Vendetta Mining Corp. (TSX-V: VTT) is pleased to announce the dri... READ MORE
Results Deepen Previous Hi-Grade Drill Intercepts Guanajua... READ MORE
North Arrow Minerals Inc. (TSX-V-NAR) is pleased to announce it h... READ MORE
Cuyes West Drilling Highlights: CU23-25 – 203.0 metres grading ... READ MORE