DIEPPE, NB, Oct. 30, 2018 /CNW/ - (CBI: TSX-V) Colibri
Resource Corporation ("Colibri") is pleased to announce that it has
entered into a share purchase agreement dated October 27, 2018 with OnTop Capital Limited
("OnTop") to purchase 100% of the issued and outstanding shares of
Yaque Minerales S.A. de C.V ("Yaque"), a wholly owned subsidiary of
OnTop (the "Transaction"). Closing of the Transaction is subject to
regulatory and shareholder approval.
As consideration for the Transaction, Colibri has agreed to
issue a convertible debenture in the amount of $1 million CDN bearing an annual interest rate of
2.5% which is convertible at any time, in whole or in part, over
the next 5 years into common shares of Colibri at $0.20 per share for a total of up to 5 million
shares. There will be no finders' fees payable.
Under Multilateral Instrument 61-101 Protection of Minority
Shareholders in Special Transactions ("MI 61-101"), the
Transaction is a "related party transaction" as OnTop is a "related
party" to Colibri by virtue of certain common share ownership and
management personnel. Specifically: (a) John Schiavi, a control person of OnTop, is also
a control person of Colibri as he owns or controls, directly and
indirectly, greater than 20% of the issued and outstanding common
shares of Colibri; and (b) Ron
Goguen, a director, officer and 10% shareholder of OnTop, is
also a director, officer and shareholder of Colibri. Normally,
under MI 61-101, an issuer is required to obtain a formal valuation
and seek minority shareholder approval for a related party
transaction. Colibri will be seeking minority shareholder approval
but will not be obtaining a formal valuation as Colibri's
securities are listed on the TSXV which is not a specified market
and, as such, Colibri is exempt from this requirement.
The independent members of the Board of Directors for Colibri,
Paul Bartos, Roger Doucet, Ed
Stringer, Jacques Monette,
and William MacDonald, consider the
acquisition cost of these properties to be fair and reasonable. The
independent members reviewed all known information generated to
date (financial records & geological/exploration data). In
addition, they received a satisfactory report from a qualified
independent director of Colibri who spent time on site in
Mexico. Data generated to date
also includes an independent NI-43 101 compliant report on
El Mezquite which was prepared in
2016. It is felt that these properties line up with Colibri's
stated objectives which are to acquire and explore highly
prospective gold projects in Mexico which have indications of historical
exploration and mining activity.
Colibri Chief Operating Officer Ian
McGavney said "There is limited downside risk for the
shareholders in this proposed transaction. The deal structure
allows Colibri to secure these properties for the next 5 years
using little cash resources which allows monies to be used for
exploration activities. We see the conversion price of the
convertible debenture as very positive considering the current
share price level."
Further details of the Transaction will be provided in a
management information circular to be issued in connection with a
special shareholder's meeting to be called to approve the
Transaction. A further news release will be issued when a meeting
date has been set.
About Yaque Minerales S.A. de C.V
The assets of Yaque consists of two mineral exploration
properties located within the major "Sonora Gold Belt" of northern
Mexico. The projects are located
between the La Colorada Gold, La India, and Mulatos Gold Mines.
The first mineral exploration property named the El Mezquite
Gold Project is considered to be highly prospective and is 180
hectares in size. It is being acquired for its potential to be a
low grade / large tonnage gold project. The second property is the
1130 hectare "Jackie" project which is approximately 2 km south of
the El Mezquite. Both projects are
un-drilled but have showings of old workings. Yaque owns 65%
of the Mezquite property with an option to acquire the remaining
35% for US$265,000 with payment
commencing in 2020 and payable in equal instalments over 5 years.
If Yaque does not exercise this option, its interest will remain at
65%. The Mezquite property is subject to a 1% Net Smelter
Royalty from production in favour of the original vendors which can
be purchased at any time for $500,000
USD.
The second property is the 1130 hectare "Jackie" project which
is approximately 2 km south of the El
Mezquite. The project borders to the east of Minera Alamos' (TSX Venture – MAI) "open-pit
heap-leach development project" called "Santana". (TSXV-MAI:
News release: Oct.25, 2018). Yaque owns the Jackie project
100%, with no underlying royalties.
El Mezquite Gold Project
The El Mezquite Project is located within the west-central
portion of the Sierra Madre Volcanic Complex in eastern
Sonora. The entrance of the
concession is easily accessible from the paved Mexican Highway #16
and contains 1 km southerly trending dirt road which runs through
the middle of the known gold mineralization. Exploration work on
the property to date has consisted of chip sampling and a Magnetic
/ 3D IP survey on the eastern portion of the property. There is no
evidence of historic drilling on the project.
Assay results from 321 rock chip samples taken from the property
indicate that 42 of the samples report values of gold >0.1 ppm,
averaging 0.74 ppm of Au and 25.7 ppm Ag. These 42 samples are
distributed along an area that extends for 600 m in north-south direction by 300 m east-west. The highest values reported are
3.41 ppm Au and 198 ppm Ag.
El Mezquite contains a broad
alteration zone that extends for about 2 km in north/south
direction, by 1 km east/west width. Within the broad alteration
zone are at least four colourful (after oxidizied sulfides)
hydrothermally altered contact zones about a silicified feldspar
porphyry. The distinct gold and silver values and geophysical
anomalies reported in the El
Mezquite area are mostly associated with these zones of
sulphide alteration.
There is evidence of previous mine workings on the property.
There are 4 shallow workings on the WNW side of the El Mezquite
Concession which require follow up exploration work and there is
also a 2 meter X 2.1 meter adit drifting 35 meters westerly from
the main dry river. The adit first drifts 29 meters to the west at
270ᵒ and then bends to 240ᵒ heading for another 6 meters. It is
open and in fair shape.
"Jackie" Gold Project
The project is 1130 Ha in size and is located approximately 2 km
south of the El Mezquite. Very
little work has been done in the way of exploration on this
property at this point. However, several old workings have been
noted on the property. This project is 100% owned by Yaque and is
not subject to any royalties.
The project borders the "Santana" project actively being
explored by Minera Alamos (TSXV-MAI)
to the east. Minera Alamos has
announced that it has successfully completed a pre-commercial bulk
sample/heap leach test on this project and in October 2018 has announced additional exploration
drilling results of: 95.7m @ 1.57 g/t
AuEq, 80.4m @1.05 g/t Au, and
95.5m @0.65 g/t Au respectively from
its Phase 1 program.
Additional information on both projects will be made available
at: www.colibriresource.com
Jackie E. Stephens, P. Geo for
Colibri is a Qualified Person as defined in NI 43-101 and has
reviewed and approved the technical information in this press
release.
About Colibri Resource Corporation:
Colibri is a Canadian mineral exploration company listed on the
TSX-V (CBI) focused on acquiring and exploring properties in
Mexico.
The TSX Venture Exchange has neither approved nor disapproved
the contents of this news release. Neither 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 release. The
statements made in this news release may contain forward-looking
statements that may involve a number of risks and
uncertainties. Actual events or results could differ
materially from the Company's expectations and projections.
SOURCE Colibri Resource Corporation
