VANCOUVER, BRITISH COLUMBIA--(Marketwired - Dec. 21, 2016) - StrikePoint Gold (TSX VENTURE:SKP)(OTCQX:STKXF) ("StrikePoint" or the "Company") is pleased to announce that it has entered into a non-binding letter of intent with IDM Mining Ltd. (TSX VENTURE:IDM) ("IDM") to purchase its extensive portfolio of properties located in the Yukon ("Properties").
Terms of the Transaction:
The purchase price for the Properties will be $4,000,000 paid as follows: $150,000 in cash and $3,850,000 in common shares of the Company (the "Consideration Shares") valued at $.385 per share (the valuation is based on a 20 day volume-weighted average). At $0.385 per share, the Company will issue 10,000,000 Consideration Shares to IDM. Upon execution of the definitive agreements, scheduled to be completed by January 12, 2017, the Company will pay to IDM a non-refundable cash deposit in the amount of $25,000 which will be credited against the cash portion of the purchase price at closing;
StrikePoint must incur $1,500,000 in exploration expenditures on the Yukon Properties by December 31, 2017. If the amount of qualified expenditures incurred by StrikePoint by December 31, 2017 is less than $1,500,000, then StrikePoint shall pay the resulting deficiency to IDM in cash.
If StrikePoint issues warrants or similar convertibles securities in one or more financings in 2017, StrikePoint will issue to IDM concurrently with the closing of each such financing a warrant having the same terms that entitles IDM to acquire 28.167% of the equity securities that may be acquired by the holders of all such warrants issued in each such financing (including IDM).
StrikePoint will appoint two of IDM's designated representatives to its Board of Directors at closing. IDM will be entitled to nominate two individuals for appointment or election as directors of StrikePoint for so long as StrikePoint owns any of the Properties.
As long as IDM holds at least 9.9% of the common shares of the Company on a non-diluted basis, it will have the right participate in future equity financings by the Company on a pro rata basis to its non-diluted shareholding immediately prior to any such financing, by electing, within 10 business days of receiving notice of the particulars of the applicable financing, to acquire up to its pro-rata allocation.
IDM will have a right of first refusal over any proposed disposition of all or any part of the Properties during the two year period following closing.
The Transaction will result in the creation of a new control block position to be held by IDM and as such, regulatory and shareholder approval will be required. Closing of the transaction is anticipated to occur on or before February 28, 2017.
CEO, Shawn Khunkhun stated, "StrikePoint is very enthusiastic about the acquisition of the Yukon portfolio from IDM, the properties have seen $25 million in exploration expenditures. Equally important, the significant exploration success in the Yukon by IDM's CEO Rob McLeod who led the discovery team of Underworld Resources which was ultimately acquired by Kinross for $138M."
The Yukon portfolio consists of 14,078 claims covering 27 properties in 49 claim groups totaling 282,000 hectares (the "Properties"). The Properties cover multiple tectonic and metallogenic environments as well as a variety of mineral deposit styles common in Yukon. The Properties were previously held by Ryan Gold Corp. ("Ryan Gold") and its subsidiaries, and received significant exploration work, with approximately $25 million (as disclosed in Ryan Gold's 2014 year end MD&A) in expenditures incurred. The Properties have limited holding costs. Previous work by Ryan Gold included significant exploration drill programs on two of the Properties, with tens of thousands of rock and soil samples collected during grass-roots exploration programs in several districts throughout Yukon. Additionally, geophysical surveys and geologic mapping programs have outlined many anomalous areas that have not received follow-up work.
Maps, photos and descriptions of the extensive portfolio are available on the company's website: www.strikepointgold.com
Andy Randell, PGeo, of SGDS Hive, has acted as the qualified person under National Instrument 43-101 and has reviewed and approved the content of this news release.
ON BEHALF OF THE BOARD of STRIKEPOINT GOLD
CEO and Director