O2Gold Inc. (NEX: OTGO.H) (“
O2Gold” or the
“
Company”) is pleased to provide additional
information about the gold mining exploration property in Quebec
(the “
Property”) that O2Gold intends to indirectly
acquire through the acquisition of all of the issued and
outstanding shares of Quebec Aur Ltd. (the
“
Target”) pursuant to a share exchange agreement
entered into by the Company with the Target and its shareholders
(the “
Shareholders”) dated April 15, 2024 (the
“
Acquisition”).
As of the date hereof, one of the Shareholders,
Forbes & Manhattan, Inc., owns more than 10% of the common
shares of O2Gold and is therefore a “related party” of the Company
pursuant to Multilateral Instrument 61-101 Protection of Minority
Security Holders in Special Transactions (“MI
61-101”). Although pursuant to MI 61-101, the Acquisition
constitutes a “related party transaction” the Company expects to
rely on an exemption from the formal valuation requirement of MI
61-101. The Company intends to seek the approval of its
shareholders for the Acquisition in accordance with MI 61-101 and
the policies of the TSX Venture Exchange (the
“TSXV”) at its next meeting of shareholders, which
is anticipated to be held on September 25, 2024.
The Acquisition is intended to be characterized
as a Fundamental Acquisition that will result in the Company
satisfying the TSX Venture Tier 2 Continued Listing Requirements,
enabling it to qualify to graduate from the NEX board of the TSXV
to Tier 2 of the TSXV (as such terms are defined in the policies of
the TSXV). Completion of the Acquisition is subject to a number of
conditions, including without limitation, receipt of TSXV approval
and the Company’s graduation to Tier 2 of the TSXV. For more
information about the Acquisition, please see the Company’s press
releases dated April 15, 2024, April 23, 2024, April 24, 2024, and
May 30, 2024, which are available under the Company’s SEDAR+
profile at www.sedarplus.ca.
Target Summary Financial Information
As of July 31, 2024, the Target did not hold any
assets (other than the Property), had no revenues, did not have any
liabilities (other than the Loan (defined below)), and had a net
loss of $1,000. For clarity, the financial information contained in
this paragraph is unaudited.
Property Description and Technical
Information
The Property is in the Abitibi-Témiscamingue
administrative region of the province of Québec. It is located
immediately north of the municipality of Rouyn-Noranda, near and
around the town of Duparquet. The coordinates of the approximate
centroid are 48º31'20"N and 79º16'5" W (UTM: 627883E and 5375817N,
NAD 83, Zone 17). The Property overlies the Hébécourt, Duparquet
and Destor townships on NTS map sheets 032D06, 032D07, 032D11 and
032D12.
The Property is the amalgamation of four (4)
non-contiguous claim blocks (from west to east).
The current Property limits cover and overlaps
many historical mining and exploration properties. The boundaries
and names of those properties have changed over time following
changes in ownership, options, and abandoned or added claims.
The Property has a total surface area of 9161.84
ha, divided as follows: Block A 2235.50 ha; Block B 5843.41 ha;
Block C 779.84 ha; and Block D 303.09 ha. The Property extends 47
km east-west and 8.7 km north-south.
The Property, all blocks combined, comprises 261
claims staked by electronic map designation (map-designated cells
or “CDC”). Some of these mining titles represent
historical (“CL”) claims that were converted to
CDC.
All claims were in good standing as at July 4,
2024.
A total of 205 of the 261 claims are subject to
royalties payable to various beneficiaries. Another 48 claims have
agreements that apply to the historical coverage of the converted
CL claims, in which case a partial royalty applies to the
associated CDC claims.
The Property is located within the Archean
Abitibi Subprovince of the southern Superior Province in the
Canadian Shield.
The regional geology consists of an Archean
volcano-sedimentary assemblage divided into five (5) volcanic rock
groups (Hunter Mine, Stoughton-Roquemaure, Kinojevis, Blake River
and two (2) sedimentary rock groups).
The Property area is known for its gold
endowment. Gold mineralization is spatially associated with the
PDDZ as well as several intermediate to felsic porphyry dykes or
plugs and alkaline intrusions. The types of gold mineralization
identified by previous work on the Property correspond to
quartz-carbonate veins, disseminated sulphides associated with
porphyritic intrusions, argentiferous quartz veins, disseminated
sulphides associated with leaching, and sulphides associated with
volcanogenic massive sulfide mineralization. The mineralization of
the first two types account for 85% of the known showings in the
area.
The Property is expected to provide O2Gold with
an extensive district-scale land position over a 47-km east-west
stretch in the south-central part of the Abitibi greenstone
belt.
Limited till sampling conducted between 2021 and
2023 has revealed gold-in-till anomalies. Two of them may be linked
to previous known occurrences of mineralization, and two others are
pristine anomalies.
There are no mineral resource estimates for the
Property and it is uncertain if further exploration will result in
any target being delineated as a mineral resource.
Private Placement Financings
In addition, the Company announces that it
intends to complete best efforts non-brokered private placement
hard dollar and flow-through financings for gross proceeds of
between $1.5 million ($900,000 hard dollar and $600,000
flow-through) and $2.0 million ($1,400,000 hard dollar and $600,000
flow-through) (the “Offerings”), or such higher
amount as may be required to meet TSXV-listing requirements. The
Company anticipates that common shares and units (each, a
“Unit”) of the Company will be issued pursuant to
the hard dollar and flow-through Offerings, respectively. Each Unit
will be issued on a “flow-through basis” and will consist of one
common share of the Company and one-half of one common share
purchase warrant (each whole warrant, a
“Warrant”). Each Warrant will entitle the holder
to acquire one additional common share of the Company for a period
of 36 months from issuance.
Closing of the Offerings is expected to occur in
late September 2024. All securities issued in connection with the
Offerings will be subject to a statutory hold period of four-months
and one day. Completion of the Offerings will occur on or before
completion of the Acquisition and is subject to a number of
conditions, including without limitation, receipt of TSXV approval.
Finder’s fees may be paid to eligible finders in accordance with
the policies of the TSXV consisting of a cash commission equal to
up to 7% of the gross proceeds raised under the Offerings and
finder warrants (“Finder
Warrants”) in an amount equal to up to 7% of the
number of common shares and Units sold pursuant to the Offerings.
Each Finder Warrant will entitle the holder thereof to purchase one
common share of the Company for a period of 36 months following the
closing date of the Offerings. The Company intends to use the net
proceeds of the Offerings for general corporate purposes and to
fund exploration expenditures on the Property.
The Company anticipates confirming the number
and price of the securities to be issued pursuant the Offerings,
including the exercise price of the Warrants and Finder Warrants,
in a subsequent press release. Such number and price of securities
is expected to be calculated based on the Market Price (as such
term is defined in the policies of the TSXV) on the date that falls
five trading days after the common shares of the Company resume
trading on the TSXV, which is anticipated in late-August 2024.
Shares for Debt
The Company is also pleased to announce that, in
connection with the Acquisition, it has entered into a settlement
agreement dated August 21, 2024, with the Target and Q-Gold
Resources Ltd. (the “Lender”) to settle all
amounts owing by the Target to the Lender pursuant to a loan
agreement dated May 3, 2021 (the “Loan
Agreement”), by way of the issuance of 7,000,000 common
shares of the Company (“Settlement
Shares”). As of August 20, 2024, the amount
outstanding under the Loan Agreement was $349,041.10 (the
“Loan”). The Settlement Shares are to be issued at
a deemed price per Settlement Share of $0.05 (the
“Settlement”). Peter Michel is the chief financial
officer of both the Company and the Lender; therefore, the Lender
is a Non-Arm’s Length Party (as such term is defined in the
policies of the TSXV) of the Company. For more information about
the Loan, please see the Company’s press release dated April 15,
2024, which is also available under the Company’s SEDAR+ profile at
www.sedarplus.ca.
The Settlement remains subject to completion of
the Acquisition and the approval of the TSXV. In accordance with
applicable securities laws, the Settlement Shares issued pursuant
to the Settlement will be subject to a four month and one day hold
period.
Second Tranche Closing
In addition, the Company is pleased to announce
that it has closed its second and final tranche of a previously
announced non-brokered private placement financing of common shares
(each, a “Common Share”) at a price of $0.05 per
Common Share (the “Ongoing Offering”) for gross
proceeds of $100,000 (the “Final Tranche”). For
more information about the Ongoing Offering and first tranche (the
“First Tranche”), please see the Company’s press
releases dated April 24, 2023 and May 30, 2024, which are also
available under the Company’s profile on SEDAR+ at
www.sedarplus.ca.
Pursuant to the Final Tranche, O2Gold issued 2
million Common Shares at a price of $0.05 per share. The securities
issued in connection with the Final Tranche are subject to a
statutory four month hold period, which expires on December 22,
2024. Completion of the Offering (including the First Tranche and
the Final Tranche) is subject to receipt of final approval of the
NEX board of the TSXV. No finder’s fees were paid in connection
with the Final Tranche. The net proceeds of the Final Tranche are
expected to be used for working capital and general corporate
purposes.
Qualified Person
The scientific and technical information
contained herein has been reviewed and approved by Stéphane
Amireault, a “qualified person” as defined in National Instrument
43-101 – Standards of Disclosure for Mineral Projects that is
independent of the Company. Mr. Amireault is anticipated to be
appointed as VP Exploration of the Company following completion of
the Acquisition.
About O2Gold
O2Gold is a mineral exploration company.
For additional information, please contact:
Scott Moore, Chief Executive OfficerPhone: (416) 861-1685
Cautionary Notes
This press release contains "forward-looking
information" within the meaning of applicable Canadian securities
legislation. Forward-looking information includes, but is not
limited to, statements with respect to the Property, Settlement,
Offerings, and First Tranche and Final Tranche, including the
Company’s intended use of proceeds, closing conditions and timing,
the Company’s ability to complete the Acquisition, the Offerings,
and the Settlement, the receipt of approvals of the TSXV, the
resumption of trading of O2Gold’s common shares on the TSXV, the
appointment of Mr. Amireault as VP Exploration of the Company, and
other matters related thereto. Generally, forward-looking
information can be identified by the use of forward-looking
terminology such as "plans", "expects" or "does not expect", "is
expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not anticipate", or "believes",
or variations of such words and phrases or state that certain
actions, events or results "may", "could", "would", "might" or
"will be taken", "occur" or "be achieved". Forward-looking
information is subject to known and unknown risks, uncertainties
and other factors that may cause the actual results, level of
activity, performance or achievements of the Company, as the case
may be, to be materially different from those expressed or implied
by such forward-looking information, including but not limited to:
receipt of necessary approvals; general business, economic,
competitive, political and social uncertainties; future mineral
prices and market demand; accidents, labour disputes and shortages
and other risks of the mining industry. Although the Company has
attempted to identify important factors that could cause actual
results to differ materially from those contained in
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can
be no assurance that such information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking information. The Company
does not undertake to update any forward-looking information,
except in accordance with applicable securities laws.
This news release does not constitute an
offer to sell or a solicitation of an offer to buy any of the
securities in the United States. The securities have not been and
will not be registered under the United States Securities Act of
1933, as amended (the "U.S. Securities Act") or any state
securities laws and may not be offered or sold within the United
States or to U.S. Persons unless registered under the U.S.
Securities Act and applicable state securities laws or an exemption
from such registration is available.
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.