TORONTO, ONTARIO--(Marketwired - Sept. 21, 2016) -
NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. WIRE SERVICES
G4G Capital Corp. (TSX VENTURE:GGC) - ("G4G") announces that it has signed a letter agreement (the "Agreement") granting it the option (the "Option") to purchase 21 properties, comprising approximately 12,301 quartz claims (the "Properties"), located in the White Gold District of the Yukon Territory, from Shawn Ryan and Wildwood Exploration Inc. (the "Vendors"). The 12,301 quartz claims, covering approximately 249,000 Ha (2,490 Square Kilometers), are grouped in 6 project areas covering various prospective geological terrain in the White Gold District (see diagram attached as Scheduled A). The Properties represent all of Mr. Ryan's precious metal interests located in the White Gold District of the Yukon Territory that are not in a current joint venture with third parties.
Description of Option
The Option is subject to certain customary conditions including, without limitation, completion of the Private Placement (as defined below), and receipt of all necessary regulatory and third party approvals, including the approval of the TSX Venture Exchange (the "TSXV") (the date upon which all conditions are satisfied, the "Effective Date").
In order for G4G to exercise the Option the following consideration will be paid to the Vendors:
- share consideration of 7 million common shares of G4G ("Common Shares") issuable in two installments, 1 million within two business days of the Effective Date (as defined below) and 6 million within 18 months of the Effective Date;
- cash consideration of C$3.5 million payable in five installments, C$500,000 on the Effective Date, C$500,000 on the first anniversary of the Effective Date, C$500,000 on the second anniversary of the Effective Date, C$1 million on the third anniversary of the Effective Date and C$1 million on the fourth anniversary of the Effective Date; and
- reimbursement of the Vendors' staking expenses of up to C$40,000.
As part of the Agreement, G4G will enter into a consulting agreement with Shawn Ryan pursuant to which, Mr. Ryan will be appointed Chief Technical Advisor of G4G for a five year period from the Effective Date.
The Private Placement
In connection with the Option (and as a condition to the Effective Date), G4G will complete a non-brokered private placement (the "Private Placement") for gross proceeds of C$3,000,000 through the issuance of units ("Units") at a price of C$0.20 per Unit. Each Unit will consist of one Common Share and one share purchase warrant (a "Warrant"), with each Warrant entitling the holder to acquire one additional Common Share at an exercise price of C$0.25 for a Common Share for a period of three years from the Effective Date.
Proceeds from the Private Placement will be used to partially finance the exercise of the Option, to finance the exploration of the Properties, and for general corporate purposes. The Private Placement is integral to the proposed transaction and therefore G4G will be relying on the 'part and parcel pricing' exemption allowed by the TSXV. Completion of the Private Placement is subject to the approval of the TSXV. All securities issued under the Private Placement will be subject to a hold period of four months and one day from the date of issuance of the securities.
Up to 9,000,000 Units ($1,800,000), may be purchased by insiders of G4G, (the "Insider Participation"), although exact allocations have not yet been determined. Any Insider Participation will result in the Private Placement being a "related party transaction" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") and Policy 5.9 of the TSXV Corporate Finance Manual ("Policy 5.9"). MI 61-101 requires a formal valuation and minority shareholder approval for a related party transaction in certain circumstances. An exemption from the valuation requirement is available to G4G because it is not listed on certain specific stock exchanges and an exemption from the minority approval requirements is available because neither the fair market value of the securities to be distributed, nor the consideration to be received for those securities, insofar as it relates to the Insider Participation, exceeds $2,500,000.
The Properties being acquired range from grass roots targets, where ridge and spur soil geochemical sampling has identified targets for more detailed follow up exploration, to more advanced exploration targets where grid soil geochemical sampling, mapping, geophysical surveys and very limited drilling campaigns have been conducted. In total over $25 million has been previously spent exploring the 21 Properties.
The Properties will be subject to a 2% NSR which will also be payable on each quartz claim staked by G4G (or any subsidiary or affiliate) in a specified area of influence during the five year period following the Effective Date, of which 1% will be payable to the Vendors and 1% will be payable to a related party (the "Related Party Royalty"). The Related Party Royalty constitutes a "related party transaction" within the meaning of MI 61-101 and Policy 5.9. MI 61-101 requires a formal valuation and minority shareholder approval for a related party transaction in certain circumstances. G4G will seek minority shareholder approval for the grant of the Related Party Royalty. An exemption from the valuation requirement in MI 61-101 is available to G4G because it is not listed on certain specific stock exchanges.
Shawn Ryan states, "By consolidating all of my interests in the White Gold District, we have created the largest claim package in the area. With the historic work that has been performed and Ground Truth Exploration's new cost effective Drone to Drill™ program, our chances of success have never been greater."
Jodie Gibson, P. Geo of GroundTruth Exploration Inc., has acted as the qualified person under National Instrument 43-101 and has reviewed and approved the content of this news release.
This news release contains forward-looking information within the meaning of applicable securities legislation. Forward-looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. Such statements include, without limitation, statements regarding the future results of operations, performance and achievements of G4G, including completion of the acquisition of the Properties, receipt of all necessary regulatory and third party approvals required in connection with the acquisition and the Private Placement, completion of the acquisition, minority shareholder approval of the Additional Royalty and the Private Placement and the amount of Insider Participation. Although the Company believes that such statements are reasonable, it can give no assurances that such expectations will prove to be correct. All such forward-looking information is based on certain assumptions and analyses made by G4G in light of their experience and perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. This information, however, is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Important factors that could cause actual results to differ from this forward-looking information include those described under the heading "Risks and Uncertainties" in G4G's most recently filed MD&A. G4G does not intend, and expressly disclaims any obligation to, update or revise the forward-looking information contained in this news release, except as required by law. Readers are cautioned not to place undue reliance on forward-looking information.
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.
This news release does not constitute an offer to purchase securities. The securities to be offered in the Private Placement have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States or to, or for the benefit or account of, a U.S. person, except pursuant to an available exemption from such registration requirements.
To view "Schedule A" please visit the following link: http://media3.marketwire.com/docs/ScheduleA9212016.jpg