Kestrel Gold Inc.

TSX VENTURE : KGC


Kestrel Gold Inc.

May 22, 2014 09:00 ET

Kestrel Gold Inc. Proposes to Acquire Additional Canadian Properties

VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 22, 2014) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS.

Kestrel Gold Inc. ("Kestrel" or the "Company") (TSX VENTURE:KGC) is pleased to announce that it has entered into a binding letter of intent (the "LOI") with respect to the acquisition of an option (the "Option") to earn an undivided one hundred (100%) percent interest in 12 properties (the "Properties") totalling approximately 22,065 hectares, from Bernie Kreft ("Kreft" or the "Optionor").

The Properties

The Properties that are to be acquired pursuant to the LOI are located in British Columbia (nine (9) properties and thirty eight (38) Mineral Title Tenures) and the Yukon Territory (three (3) properties and six hundred and twenty four (624) Quartz Claims). The Properties range from being grassroots to very close to drill ready in exploration status, and cover targets that include epithermal, intrusion-related and orogenic gold types as well as porphyry copper type models.

The more advanced projects include Ten Mile Creek, Clear Creek and Barney Ridge, all of which are located in the Yukon beside placer gold mining camps. The Yukon projects lie within the prolific gold producing Tintina gold province, home to the large Alaskan gold mines and deposits such as Fort Knox, Pogo and Donlin Creek. Vallaeu Creek, in central British Columbia is situated in the Quesnel Trough, a regional geological Terrane belt extending from southern to northern British Columbia hosting many of the provinces larger gold and copper deposits.

An initial geological compilation of existing exploration data for all Yukon and British Columbia Properties has begun and prioritized field exploration is expected to commence shortly. In addition, the Properties will have an area of common interest surrounding them, whereby the Company will pay the Optionor all costs associated with the acquisition of additional mineral properties within the area.

The Acquisition

Subject to the terms of the LOI and upon entering into a definitive option agreement (the "Definitive Agreement") between the Company and Bernie Kreft, Kestrel will be granted the exclusive Option to acquire a one hundred (100%) percent interest of all mineral rights in respect of the Properties. To fully exercise the Option, Kestrel will be required to issue an aggregate of 11,100,000 common shares in the capital of the Company ("Common Shares") to the Optionor and to make staged payments totalling $500,000 to the Optionor to be used for exploration programs on the Properties. Upon exercise of the Option, the Optionor shall receive a 1.5% NSR on each of the Properties, 0.75% of which can be purchased by the Company for $1,000,000 (other than with respect to the NSR on the Ten Mile Creek property).

The cash payments are to be made in two separate instalments of $250,000, the first instalment to be paid on or prior to the first anniversary of the effective date of the Definitive Agreement and the second instalment on or prior to the third anniversary of the effective date of the Definitive Agreement.

The Common Shares are to be issued to the Optionor in three separate instalments of 3,700,000 Common Shares, to be paid on or prior to each of: (i) the execution of the Definitive Agreement; (ii) January 31, 2015; and (iii) the first anniversary of the effective date of the Definitive Agreement. The Common Shares will be subject to a four (4) month hold period from the date of issuance.

Kevin Nephin, the Company's Chief Executive Officer, states: "Having worked with Bernie over the past 4 years on other projects we are very excited to solidify our relationship with him by moving ahead with this acquisition. Bernie is one of Canada's top prospectors. His work ethic, discipline, prospecting abilities and big picture approach are ingredients critical to the discovery of new deposits, highlighted by his numerous previous industry successes. Working with Bernie and his team will allow Kestrel to quickly and effectively explore these highly prospective Properties in a cost effective manner."

Bernie Kreft states, "I look forward to working with Kevin and the Kestrel team. Combining Kestrel's financial and geological support with my prospecting and field exploration skills should yield an aggressive acquisition as well as discovery-based mineral exploration company."

The acquisition of the properties is subject the parties entering into the Definitive Agreement and the receipt of all required regulatory approvals, including the acceptance of the TSX Venture Exchange ("TSXV"). The acquisition will constitute a "reviewable transaction" pursuant to the policies of the TSXV and as such, TSXV approval will be subject to a review by the TSXV of the proposed acquisition and may include the requirement for a title opinion on the properties and the provision of NI 43-101 compliant technical reports with respect to the Properties. In accordance with Exchange policy, the Common Shares are currently halted from trading and will remain halted until further notice.

Effect of Acquisition on Outstanding Securities of Kestrel

Kestrel currently has 11,095,842 Common Shares issued and outstanding. Upon closing of the acquisition, the Company will be required to issue 3,700,000 Common Shares to Mr. Kreft, which represents approximately 33% of the currently outstanding Common Shares.

In addition, further to the news releases of the Company dated April 21, 2014 and May 1, 2014, the Company plans to complete non-brokered private placement of up to 10,000,000 units of the Company (the "Private Placement") and to issue an additional 500,000 Common Shares as payment of certain debts of the Company (the "Debt Settlement"). Assuming the completion of the acquisition, the completion of a fully subscribed Private Placement and the completion of the Debt Settlement, the Company will have up to a total of 21,595,842 Common Shares outstanding at the time of completion of the acquisition, of which Mr. Kreft will hold approximately 17%.

In order to exercise the Option, the Company will be required to issue Mr. Kreft up to a total of approximately 50% of the outstanding Common Shares, excluding the Private Placement and Debt Settlement, which amounts to approximately 34% of the Common Shares assuming completion of a fully subscribed Private Placement and Debt Settlement and no other issuances of Common Shares.

In the event that Mr. Kreft will acquire greater than 20% of the outstanding Common Shares as of the date of closing of the acquisition of the Option, the Company will be required to obtain the consent of at least 50% of the shareholders of the Company pursuant to the policies of the TSX Venture Exchange.

Bernie Kreft

Mr. Kreft has been a full time prospector in the Yukon Territory since 1988. He manages an active and aggressive family run exploration and development company with numerous projects throughout British Columbia and the Yukon. Mr. Kreft has a history of acquiring and advancing mineral prospects ranging from grassroots to advanced projects, and has made several mineral discoveries over the course of his career. In addition, Mr. Kreft has years of experience in the area of placer mining. Bernie was named Yukon Prospector of the Year for 1998 by the Yukon Prospectors Association.

About Kestrel Gold Inc.

Kestrel Gold Inc. is a gold exploration Company headquartered in Canada. Kestrel (KGC) is listed on the TSX Venture Exchange and explores primarily for gold in Canada. The Company has ongoing exploration projects in the famed Klondike Gold Fields just south of Dawson City, Yukon Territory.

Technical aspects of this news release have been reviewed and approved by William Taylor, P.Geo., hereby designated as a qualified person under National Instrument 43-101.

For further information, please visit our website at www.kestrelgold.com.

Cautionary Statements

This news release contains "forward-looking statements" within the meaning of applicable securities laws relating to the acquisition of the Properties, the completion of the Private Placement and the Debt Settlement, and the future interest of Mr. Kreft in the Company. Readers are cautioned to not place undue reliance on forward-looking statements. Forward-looking statements are based on certain key assumptions made by the Company, including assumptions regarding the satisfaction of conditions and completion of the acquisition, the ability of the Company to raise maximum amount pursuant to the Private Placement, the satisfaction of the conditions to the completion of the Debt Settlement, the receipt of all regulatory and stock exchange approvals related to the acquisition, the Private Placement and the Debt Settlement and with respect to the future proposed exploration activities on the Property. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the transactions will not be successfully completed for any reason, including the failure to obtain the required approvals or clearances from regulatory authorities, stock exchanges and shareholders or the failure by any party to complete the acquisition, the Private Placement or the Debt Settlement on terms acceptable to the Company. The forward-looking statements in this news release are made as of the date of this release and the Company undertakes no obligation to update publicly or revise any forward looking statements whether as a result of new information or otherwise, except as required by applicable securities laws. The Company undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the Company or its financial or operating results or (as applicable) their securities.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

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