VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jan. 5, 2017) - WestKam Gold Corp. (TSX VENTURE:WKG) (the "Company" or "WestKam") announces that it has entered into a letter of intent ("LOI") dated January 4, 2017 with MX Gold Corp. (TSX VENTURE:MXL) ("MX Gold"), pursuant to which it has agreed to sell all of its interest in its Bonaparte property to MX Gold in consideration for 40 million shares of MX Gold (which will represent an approximate 19.7% interest in MX Gold on a non-diluted basis, assuming MX Gold does not issue any additional securities prior to closing). The Company intends to dividend a substantial number of the MX Gold shares to its shareholders, on a pro rata basis, subject to compliance with all applicable laws. This transaction is considered a Non Arm's Length transaction under the policies of the TSX Venture Exchange (the "TSXV") in that the Company's director, Mr. Akash Patel, is also a director and executive officer of MX Gold.
The LOI contemplates a 30 day due diligence period during which MX Gold will verify information regarding the Bonaparte property and the Company will conduct standard due diligence on MX Gold. The sale of the Bonaparte property is further conditional upon the entering into of a definitive agreement within 60 days, with terms and conditions acceptable to both parties. Effective upon signing of the definitive agreement, the Company has agreed to pay a break fee of $37,500 (payable within 6 months of termination, in cash or in common shares at the Company's discretion) in the event this transaction does not close due to the Company being unable to satisfy one or more of its closing conditions. In addition, effective upon signing of the definitive agreement, MX Gold has agreed to reimburse the Company for costs it has incurred in relation to this transaction, up to a maximum amount of $75,000.
As previously announced (refer to the Company's December 28, 2016 news release), the Company optioned a 5% interest in the Bonaparte property to MX Gold in consideration for MX Gold incurring a minimum of $650,000 in exploration expenditures on the property by December 31, 2016. The Company is awaiting evidence that qualifying expenditures have been incurred by the deadline in order to determine whether MX Gold has earned its 5% interest in the property. The parties have agreed that if MX Gold has earned the 5% interest in the Bonaparte property, then the property interest being acquired under the LOI will be the remaining 95% interest; however, if MX Gold has not earned the 5% interest, then the interest being acquired under the LOI will be a 100% interest, without change in the consideration payable therefore.
The Company has also entered into a letter of intent with an arm's-length party, Platinum Capital Corp., pursuant to which it will acquire three mineral claims that are adjacent to the Bonaparte property, in consideration for $10,000 and 11,000,000 common shares of the Company. The three claims are subject to an existing 1% NSR which the Company has agreed to assume and the Company has agreed to grant an additional 1% NSR to the vendor of the property.
Completion of each of the above transactions is subject to a number of conditions, including TSXV acceptance, and the sale of the Bonaparte property requires disinterested shareholder approval. The Bonaparte transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transactions will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in a management information circular or filing statement to be prepared in connection with the transactions, any information released or received with respect to the transactions may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transactions and has neither approved nor disapproved the contents of this press release.
About WestKam Gold Corp.
WestKam is a Canadian gold exploration company focused on developing the Bonaparte Gold Project near Kamloops, British Columbia. Additional information can be found on the Company's website at www.westkamgold.com.
ON BEHALF OF THE BOARD OF DIRECTORS
Matt Wayrynen, President
WestKam Gold Corp.
Suite 900, 570 Granville Street
Vancouver, BC V6C 3P1
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
All statements included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. In particular, this news release contains forward-looking information regarding the sale of the Bonaparte property to MX Gold, the acquisition of the additional claims, receipt of TSXV acceptance to both transactions, receipt of disinterested shareholder approval to the Bonaparte transaction, completion of all conditions required to be met in order to close each of the transactions. These forward-looking statements involve numerous assumptions made by the Company based on its experience, perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. These statements involve substantial known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will prove inaccurate, certain of which are beyond the Company's control. Readers should not place undue reliance on forward-looking statements. Except as required by law, the Company does not intend to revise or update these forward-looking statements after the date hereof or revise them to reflect the occurrence of future unanticipated events.