FULLER CAPITAL CORP. ("Fuller" or the "Corporation") (TSX VENTURE:
FUL.P) is pleased to announce that further to its previous press
release of March 3, 2011 regarding the entering into of the letter
of intent dated February 28, 2011 (the "LOI"), Fuller, 7854811
Canada Inc., a wholly-owned subsidiary of Fuller ("Subco"), AXMIN
Inc. ("AXMIN") and Nimini Gold Holdings Corp. ("Nimini"), a
wholly-owned subsidiary of AXMIN, have entered into an amalgamation
agreement dated June 9, 2011 (the "Definitive Agreement"). Pursuant
to the Definitive Agreement, Subco will amalgamate with Nimini to
form an amalgamated company ("Amalco") which will become a
wholly-owned subsidiary of Fuller (the "Resulting Issuer") upon the
completion of the transaction (the "Amalgamation"). In connection
with the Amalgamation, Fuller, a corporation currently existing
under the laws of the Province of British Columbia will change its
name to Nimini Gold Corp. or such other name as the board of
directors may approve and will also continue under the laws of
Canada. Fuller is a capital pool company listed on the TSX Venture
Exchange. The Amalgamation will complete the previously announced
qualifying transaction of Fuller (the "Qualifying Transaction").
Nimini is a holding company that will immediately prior to the
date of the Amalgamation own directly or indirectly AXMIN (SL) Ltd.
and Nimini (SL) Ltd. both currently indirect wholly-owned
subsidiaries of AXMIN which hold a 100% interest in AXMIN's mineral
projects in Sierra Leone, including the Komahun deposit, situated
within the Nimini West Exploration Licence, the Nimini East Licence
and the Matotoka Exploration Licence (collectively, the "Project").
The Project is situated in the central-west Kono region of Sierra
Leone, approximately 330 km east of the capital Freetown.
The principal asset is the Komahun Gold Project ("Komahun")
which is located within the wholly-owned Nimini Hills West Licence.
The remaining licences in Sierra Leone, being Nimini Hills East and
Matotoka each are at an early stage of exploration. Komahun has an
Indicated Mineral Resource of 370,000 tonnes grading 9.1 g/t Au
(110,000 ounces) and an Inferred Mineral Resource of 3.1 million
tonnes grading 4.3 g/t Au (435,000 ounces).
In December 2010, the exploration license for the Matotoka area
was renewed for a period of two years. The Matotoka Exploration
License is held under EXPL 03/08 and is 80.6 sq km. The license is
situated in the Tane Chiefdom, Tonkolili District, Northern
Province. The license is valid for 2 years until December 2012 and
this permit gives AXMIN SL the right to explore for gold, diamonds,
associated minerals and base metals.
In April 2011, the exploration licences for the Nimini Hills
East and Nimini Hills West were granted for a period of two years
to Nimini Mining Limited, a 100% subsidiary of AXMIN Ltd. The
Nimini Hills property is held under two exploration licences,
Nimini East Exploration Licence (Number EXPL 33/2011 44 km2), which
is valid until March 2013, and Nimini West Exploration Licence
(Number EXPL 34/2011, 56 km2), which is valid until March 2013, and
these permits give AXMIN SL the right to explore for gold,
diamonds, associated minerals and base metals. Both licenses are
situated in the Kono District.
Komahun Mineral Resource Statement
The table below details the in situ Mineral Resource estimated
at Nimini Hills by SRK Consulting Engineers and Scientists ("SRK")
based on a cut off of 1.8 g/t Au. This cut off grade results from
basic estimates of technical and economic parameters that may be
required for underground mining. A 2m minimum width has been
applied to the model in order to include a certain amount of low
grade where the mineralised structure becomes thin; this reflects a
minimum planned dilution from stopping in these thin areas.
Komahun Mineral Resource Statement, September 2009, restated
February 2011(1)
----------------------------------------------------------------------------
Indicated Mineral Resource
----------------------------------------------------------------------------
Contained
Mt g/t Kg ozs
----------------------------------------------------------------------------
greater than 1.8 g/t Main Zone 0.37 9.1 3,350 110,000
----------------------------------------------------------------------------
greater than 1.8 g/t Southwest Zone - - - -
----------------------------------------------------------------------------
greater than 1.8 g/t Total 0.37 9.1 3,350 110,000
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Inferred Mineral Resource
----------------------------------------------------------------------------
Contained
Mt g/t Kg ozs
----------------------------------------------------------------------------
greater than 1.8 g/t Main Zone 2.8 4.5 12,800 415,000
----------------------------------------------------------------------------
greater than 1.8 g/t Southwest Zone 0.3 2.5 750 24,000
----------------------------------------------------------------------------
greater than 1.8 g/t Total 3.1 4.3 13,550 435,000
----------------------------------------------------------------------------
(1) Figures may be subject to rounding differences.
Scoping Study
A scoping study was undertaken by AXMIN over the period October
to December 2008. The scoping study was provided to AXMIN by SRK,
and the engineering input was provided by SENET. Full details of
the scoping study can be found in the SENET report entitled Komahun
Gold Project, Sierra Leone - Scoping Study dated March 2009 and
available on SEDAR website www.sedar.com under AXMIN's profile.
The results of the preliminary Scoping Study were announced by
AXMIN in March 2009 and are available under AXMIN's profile at
www.SEDAR.com. The Scoping Study used a base case of a 6 year,
350,000 tonne per annum ("tpa") throughput (50,000 ounce per annum
production profile), with a gold price of US$750/oz, and utilising
the existing indicated and inferred mineral resources. The Scoping
Study indicates that at a gold price of US$750/oz, the project has
a net present value ("NPV") at a 5% discount rate of US$11 million
and at a gold price of US$900/oz the NPV figure increases
substantially to US$48 million. The Scoping Study's main objective
was to facilitate exploration planning, whilst project
sensitivities were completed to provide guidance on the upside
potential in the event of resource expansion from exploration below
the current resource level. Highlights of the study are presented
in the table below.
-------------------------------------------------------------
Base case US$750/oz Au
-------------------------------------------------------------
Mine Throughput 350,000 tpa
Mine Life 6 years
Capital Cost US$69 million
Cash Operating Cost (including royalties) US$459/oz Au
Average Annual Gold Production (Life of Mine) 50,000 ozs
---------------------------------------------------------------------------
NPV IRR
(after tax, 5% (after tax &
discount rate) royalties)
---------------------------------------------------------------------------
US$750/oz Au US$11 million 10%
US$900/oz Au US$48 million 25%
---------------------------------------------------------------------------
The Scoping Study considered an industry standard process plant
encompassing gravity and leach-CIP (carbon-in-pulp) circuits and
generates on average 49,700 ounces per annum at a cash operating
cost of US$459/oz. The base case capital cost has been estimated at
US$69 million, which includes US$14 million for underground mining
and US$5.3 million for life of mine sustaining capital. At a 5%
discount rate and a gold price of US$750, the NPV is US$11 million
and the Internal Rate of Return ("IRR") is 10%. At a 5% discount
rate and a gold price of US$900/oz, the NPV increases to US$48
million and the IRR increases to 25%.
In the event that additional mineable reserves are delineated
below the current resource base the following increases are
realised for both US$750/oz gold and US$900/oz gold.
Post Tax NPV (5%
discount rate) IRR
Options US$750/oz US$900/oz US$750/oz US$900/oz
---------------------------------------------------------------------------
Base Case US$11 m US$48 m 10% 25%
Hypothetical 100,000 oz
additional reserves at the
same grade US$35 m US$80 m 16% 30%
Hypothetical 200,000 oz
additional reserves at the
same grade US$56 m US$120 m 19% 32%
Further upside may also be obtained should a hydro electric
scheme currently being considered at the national level be
implemented to serve the region of Komahun.
Power is from stand alone heavy fuel oil generators at an oil
price of US$80/bbl. The underground mining cut off grade was taken
at 3.5 g/t Au, assuming a US$750/oz gold price, a mineable tonnage
of 1.77 million tonnes and head grade of 5.2 g/t Au. Metallurgical
recovery was assumed to be 92% as determined by preliminary
testwork undertaken by AXMIN in 2007.
Work Program 2011
In order to take advantage of the dry season in Sierra Leone,
AXMIN has undertaken a first phase 5,000 metres of a 10,000 metre
core drilling program planned for Komahun. The first 34 holes
(5,077 meters), 15 holes have targeted infill drilling and the
eastern strike extension at the Komahun Main Zone, while 19 holes
have focus on the newly discovered Western Zone which is thought to
be the faulted extension of the Main Zone. Initial results from
infill drilling at Main Zone delivered good grades and confirmed
that the deposit is open to the east, results include, 6.08 g/t Au
over 24.8 metres, and 3.53 g/t Au over 12.5 and 4.39 g/t Au over
13.5 metres. First results in the West Zone, defined by a 500 metre
southwest trending gold soil anomaly and trenching, include 17.33
g/t Au over 2.5 metres. Full results for this phase of drilling are
expected shortly. All intersections lengths reported in this press
release are core length. The highly prospective Sendekor Zone,
located southwest of the Main Zone will be the focus of the second
phase of drilling.
Shareholders of Fuller are not required to approve the
Amalgamation or the Definitive Agreement. Shareholders of Fuller
have previously approved certain ancillary matters, including the
name change and the continuation at the annual and special meeting
of Shareholders held on April 29, 2011.
The Qualifying Transaction
In connection with the Qualifying Transaction, Nimini will
undertake a financing to raise gross proceeds of at least $5
million through a private placement of subscription receipts at
$0.50, each such subscription receipt automatically exchangeable,
subject to the satisfaction of certain conditions, for one unit
consisting of one (1) common share of the Resulting Issuer (the
"Shares") and one half of one (1/2) warrant to acquire a common
share of the Resulting Issuer for a period of two (2) years for
$0.75 per common share (the "Warrants"). Proceeds from the private
placement will be deposited with an escrow agent, and will be
released to Nimini upon satisfaction or waiver of all conditions
precedent in the Definitive Agreement to complete the Qualifying
Transaction. The proceeds will be used to fund the repayment of
loan payable to AXMIN on account of expenditures incurred in Sierra
Leone (approximately U.S.$1,840,000 outstanding as at May 31, such
amount subject to increase until the effective date of the
Amalgamation) and for exploration and development costs on the
Project and general working capital. The private placement of
subscription receipts will be led by Paradigm Capital Inc. and is
expected to close on or around July 7, 2011.
Under the terms of the Definitive Agreement, among other things,
at the effective time of the Amalgamation each Nimini common share
(including those issued pursuant to the private placement) and
Nimini warrant (including those issued pursuant to the private
placement) shall become one (1) common share and one (1) warrant of
Fuller, respectively and Amalco (Nimini Gold Holdings Inc.) will
become a wholly-owned subsidiary of Fuller.
In connection with the Qualifying Transaction AXMIN will receive
30 million Shares and 15 million Warrants, and is anticipated to
own approximately 60% of the shares of the Resulting Issuer on a
non-diluted basis (assuming completion of the $5 million private
placement). It is expected that upon completion of the Qualifying
Transaction, and subject to approval of the TSX Venture Exchange,
AXMIN will distribute a portion of the Resulting Issuer Shares to
AXMIN shareholders, such that after giving effect to such
distribution AXMIN will retain an approximate 40% interest in the
Resulting Issuer on a non-diluted basis.
The Qualifying Transaction is an arm's length transaction.
Following completion of the Qualifying Transaction, the
following persons are expected to be Insiders of the Resulting
Issuer:
George Roach, Director
Mr. Roach is currently President and Chief Executive Officer of
AXMIN. Prior to this he was the Chief Executive Officer of AfNat
Resources Ltd. Mr. Roach was also Chief Executive Officer and a
director of G&B African Resources Ltd. He was formerly a
director and Managing Director, Africa of Uramin Inc. from March
2005 to March 2006. He is also the Chairman and a Director of
Ethiopian Potash Corporation and Director of Ferrum Resources
Limited.
Francois Auclair, Director
Mr. Auclair is currently Vice President, Exploration of AXMIN.
From November 2008 to May 2009 he was an independent consultant.
From March 2007 to November 2008 he was Vice President, Exploration
of DiaBras Exploration Inc. and from November 2004 to December 2006
he was Country Manager, Mauritania and General Manager at the
Tasiast Gold Mine for Rio Narcea Inc.
Mario Caron, Director
Mr. Caron is currently a director of the AXMIN and was President
and Chief Executive Officer of AXMIN from January 2008 until June
2010. He was also previously, President, CEO and director of
Tiberon Minerals Limited and a director and non-executive Chairman
of Orosur Minerals and a director of Andean American Gold Corp.,
Vaaldiam Mining Inc. and First Uranium Limited. He is also a
Managing Director of Ferrum Resources Limited.
Yves Grou, Director
Mr. Grou is a chartered accountant who has practical experience
in the gold exploration and development sector. He served as Chief
Financial Officer during the formative years of Semafo Inc. from
1995 to 1999. He also served as a Director and Chief Financial
Officer of Afcan Mining Corporation from 1996 through to the time
of its sale in 2005 to Eldorado Gold Corporation.
Mr Grou is a member of the Quebec Institute of Chartered
Accountants. After receiving his Bachelor of Commerce degree from
McGill University in 1977, Mr. Grou worked with Ernst & Young
(Montreal) for three years. In 1980, he and Benoit La Salle
co-founded the accounting firm of Grou, La Salle & Associates.
Based in Montreal, the firm offered audit and accounting services,
with a strong emphasis on financial and corporate reorganization
and the implementation of international corporate structures. The
firm grew from its two original partners to a staff of over 50 at
the time the firm was sold in 2004 to Raymond Chabot Grant
Thornton.
David de Jongh Weill, Director
Mr. de Jongh Weill is currently a director of AXMIN and has been
a director of Patrimoine International Ltd. (formerly Chiliogon
International Ltd.) since December 2009 and a Partner of Patrimoine
Partners LLP (formerly Chiliogon Partners LLP), a corporate finance
advisory and investment management company, since September
1999.
Colin Watt, Director
Colin Watt holds a Bachelor of Commerce from the University of
British Columbia (1993). He is the President of Squall Capital
Corp., a private Vancouver based company which specializes in
financing, restructuring and providing management services to early
stage public companies. Mr. Watt has been a director and/or officer
of a number of public companies listed on the TSX Venture Exchange,
TSX and AIM.
David Patterson, Director
Mr. Patterson holds a Masters of Business Administration from
Simon Fraser University (1991) and a Bachelor of Arts from Simon
Fraser University (1977). For more than 25 years he has been
involved in the administration and finance of exploration companies
based in North America. Mr. Patterson has been a director and/or
officer of a number of public companies listed on the Exchange.
The closing of the Qualifying Transaction is expected to occur
in July 2011 and is subject to a number of conditions, including
but not limited to, acceptance and regulatory approval by the TSX
Venture Exchange. 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 filing
statement 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 securities of a capital pool company should be
considered highly speculative.
Paradigm Capital Inc., subject to completion of satisfactory due
diligence, has agreed to act as sponsor in connection with the
proposed transaction. An agreement to sponsor should not be
construed as any assurance with respect to the merits of the
proposed transaction or the likelihood of completion.
The Definitive Agreement and certain documents will be filed
with the applicable securities regulators and will be available at
www.sedar.com.
Qualified Persons
Mineral resources that are not mineral reserves do not have
demonstrated economic viability. The Scoping Study is a preliminary
assessment that includes inferred mineral resources that are
considered too speculative geologically to have the economic
considerations applied to them that would enable them to be
categorized as mineral reserves, and there is no certainty that the
preliminary assessment will be realized.
This press release (other than the disclosure under the heading
Komahun Mineral Resource Statement) has been reviewed by Francois
Auclair, M.Sc., AXMIN VP Exploration, Member of the Ordre des
Geologues du Quebec and Fellow of the Geological Association of
Canada and a Qualified Person under National Instrument 43-101 and
Mr. Martin Pittuck, MSc, C Eng, MIMMM, Principal Resource
Geologist, with over 10 years experience of estimating gold project
resources, is a Qualified Person under National Instrument 43-101
and is the Qualified Person who reviewed the disclosure under the
heading Komahun Mineral Resource Statement in this press
release.
Notice on forward-looking statements:
This release includes forward-looking statements regarding
Fuller, Nimini, AXMIN and their respective subsidiaries and
businesses. Such statements are based on management's current
expectations. The forward-looking events and circumstances
discussed in this release, including completion of the proposed
transaction, may not occur and actual operating results could
differ materially as a result of known and unknown risk factors and
uncertainties affecting the companies, including regarding the
insurance industry, economic factors and the equity markets
generally. No forward-looking statement can be guaranteed. Except
as required by applicable securities laws, forward-looking
statements speak only as of the date on which they are made and,
except as required by applicable law, Fuller, Nimini and AXMIN and
their respective subsidiaries undertake no obligation to publicly
update or revise any forward-looking statement, whether as a result
of new information, future events, or otherwise.
Fuller is a capital pool company governed by the policies of the
TSX Venture Exchange. Fuller's principal business is the
identification and evaluation of assets or businesses with a view
to completing a Qualifying Transaction.
The TSX Venture Exchange has in no way passed upon the merits of
the proposed transaction and has neither approved nor disapproved
the contents of this press release. Neither the 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.
Contacts: Fuller Capital Corp. David Patterson CEO (604)
684-0561 (604) 602-9311 (FAX)
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