Argus Metals Corp.

Argus Metals Corp.

October 08, 2014 09:30 ET

Argus Metals Corp.: Update on Yanamina Gold Project Purchase and Private Placement Announcement

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 8, 2014) - Argus Metals Corp. ("Argus") (TSX VENTURE:AML) provides an update on its planned acquisition of the Yanamina Gold Project in Peru and details of its planned private placement.

On June 16, 2014 the Company announced its proposed purchase of the Yanamina Gold project from Coronet Metals Inc. ("Coronet"). The transaction would involve the Company acquiring Coronet's wholly owned Peruvian subsidiary, Coronet Metals Peru S.A.C. ("Coronet Peru") in exchange for Argus:

(a) delivering to Coronet that quantity of common shares in the capital of Argus as is equal to 40% of the issued and outstanding common shares of Argus as of the closing date; and
(b) assuming Coronet's obligations under the original agreement whereby Coronet acquired Coronet Peru.

Argus advises that since June 16, 2014:

(i) Argus made application to the TSX Venture Exchange (TSXV) for approval of the transaction; however the application was not approved due to Coronet not having immediate access rights to the Yanamina project. This was despite the fact Argus had structured its acquisition to be contingent on gaining such access rights;
(ii) Argus has made application to list on the Canadian Securities Exchange (CSE). A condition of listing thereon is that Argus first eliminate its working capital deficit;
(iii) as a means to satisfying its working capital requirements, Argus intends to undertake a private placement to raise at least $500,000 through the distribution of units at $0.075 per unit (the "Private Placement"); each unit to consist of one common share and one warrant (each warrant entitling the holder to acquire one common share over 24 months at $0.15 in the first 12 months and at $0.30 thereafter; and
(iv) an updated Preliminary Economic Assessment ("PEA") on the Yanamina Project has been completed and filed on SEDAR. The PEA concludes that:
  • Yanamina is an advanced-stage project with an NI 43-101 compliant resource of 83,100 oz gold in the indicated category and 123,700 oz gold in the inferred category at a 0.5 g/t gold cutoff.
  • Treating 4,802,000 tonnes of ore grading 1.34 g/t gold and 5.65 g/t silver with heap leach recoveries of 73% gold and 40% silver result in projected production of 151,000 oz gold and 349,000 oz silver at a cash cost of US$350/eq oz gold over a five-year mine life.
  • Initial annual production of 41,000 oz gold and 95,000 oz silver with averages of 30,000 oz gold/year and 70,000 oz silver/year over the mine life.
  • Capital expenditures and working capital requirement estimated to be US$38.5 million.
  • At US$1,250/oz gold and $18.00/oz silver, the IRR is 49%, the NPV at a 7.5% discount is US$38.6 million and the payback is 1.5 years from the start of operations.
  • The PEA was based on a five-year 1:1 stripping ratio open pit mine, a 3,000t/d heap leach operation and a US$6.5 million reclamation and closure cost.

CSE listing requirements do not require that Argus engage a sponsor or obtain shareholder approval to the transaction. A comprehensive CSE Listings Statement will be prepared and filed on SEDAR.

Argus intends to undertake the Private Placement on a non-brokered basis, using available prospectus exemptions, including the exemption under BCI 45-534 - Exemption from Prospectus Requirement for Certain Trades to Existing Security Holders, (effective March 2014) whereby all existing shareholders of Argus will have the right to participate. To that end, Argus advises that:

(a) all persons who held common shares of Argus on October 6, 2014 (the "record date") are eligible to participate in the Private Placement;
(b) the minimum size of the Private Placement is $500,000 of gross subscription proceeds (6,666,667 units), and the maximum size of the Private Placement is $750,000 of gross subscription proceeds (10,000,000 units);
(c) the Private Placement net proceeds will be used as to (i) settle liabilities of up to $100,000; (ii) pay the costs of the transaction with Coronet (estimated at $180,000); (iii) for community relations in Peru estimated at $100,000; (iv) to initiate work on bringing the Yanamina environmental impact study into compliance with existing regulations (estimated at $80,000); and (v) for general working capital requirements; and
(d) Argus will allocate units to investors on a pro-rata basis as to amounts subscribed if aggregate subscriptions exceed the maximum number of units proposed to be sold.

Argus' shares are currently halted from trading, and will remain halted pending listing on the CSE.


Michael Collins, President and CEO

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 news release.

We seek safe harbor.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to: the terms and conditions of the proposed transaction; the terms and conditions of the proposed private placement; future exploration and testing; use of funds; and the business and operations of Argus after the proposed transaction. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; and the results of current exploration and testing. There can be no assurance that such statements 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 statements. Argus and Coronet disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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