VANCOUVER, BRITISH COLUMBIA--(Marketwired - Feb. 24, 2017) - Otis Gold Corp. ("Otis" or the "Company") (TSX VENTURE:OOO)(OTC PINK:OGLDF) is pleased to announce that Agnico Eagle Mines Limited ("Agnico") has agreed to acquire, by way of private placement, 14,420,000 common shares ("Common Shares") of Otis at a price of $0.35 per Common Share for proceeds of $5,047,000 (the "Transaction"). On closing of the Transaction, Agnico will own approximately 9.95% of the issued and outstanding Common Shares on a non-diluted basis (after giving effect to the Transaction, but otherwise assuming that the number of issued and outstanding Common Shares as at the date hereof remains unchanged). The proceeds from the Transaction shall be primarily used for exploration at the Kilgore Gold Project located in Clark County, Idaho as well as working capital and general corporate purposes.
Otis' CEO, Mr. Craig Lindsay, stated: "We are very excited to welcome Agnico as a strategic investor in Otis. Agnico is an experienced global leader in the precious metals sector with a successful track record of identifying and building quality assets. We believe the Transaction serves to recognize the strong potential for growth at Kilgore. This investment will allow Otis to aggressively pursue its goal of defining an economic gold deposit close to infrastructure in an emerging gold district. We look forward to working with Agnico, and we thank the Agnico team for their confidence in Otis."
On closing of the Transaction, Agnico and Otis will enter into an investor rights agreement (the "Investor Rights Agreement") pursuant to which Agnico will have the right to participate in certain equity financings by Otis in order to maintain its interest of up to 9.95% in Otis. The Common Shares issued under this Transaction will be subject to a hold period of four months and one day from the closing date of the Transaction in accordance with applicable Canadian securities laws. The closing of the Offering is expected to occur on or about February 28, 2017, and is subject to receipt of all necessary regulatory approvals and certain other conditions.
About the Kilgore Gold Project
The Kilgore Gold Project contains a current NI 43-101 (dated September 12, 2012) Indicated Resource of 520,000 ounces (oz) Au in 27.4 million tonnes at a grade of 0.59 g/t Au and an Inferred Resource of 300,000 oz Au in 20.2 million tonnes at a grade of 0.46 g/t Au (the "Kilgore Deposit"). The Kilgore Deposit is part of an extensive low-sulfidation quartz-adularia epithermal hydrothermal system hosted in Tertiary volcanic rocks and Aspen Formation calcareous siltstone, shale, and sandstone of Late Cretaceous age. Gold mineralization is of the disseminated, bulk-tonnage type similar to that comprising the classic volcanic-hosted gold deposits at Round Mountain, Nevada. The Kilgore Deposit exhibits attractive metallurgy with excellent gold recovery averaging greater than 80% at 1.5" crush size based on column leach test results (see Otis News Release dated June 5, 2012). A new NI 43-101 compliant resource estimate is planned for this year to include the newly recognized Sill/Aspen mineralization recently detailed in a News Release dated February 9, 2017.
The Qualified Person under National Instrument (NI 43-101) Standards of Disclosure for Mineral Projects for this News Release is Paul D. Gray, P. Geo, who has reviewed and approved its technical content.
About the Company
Otis is a resource company focused on the acquisition, exploration, and development of precious metal deposits in Idaho, USA. Otis is currently developing its flagship property, the Kilgore Gold Project, located in Clark County, Idaho.
ON BEHALF OF THE BOARD
"Craig T. Lindsay"
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 release.
The forward-looking information contained in this press release is made as of the date hereof, and Otis undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. This news release does not constitute an offer to sell or a solicitation of an offer to sell any 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.