Prosper Gold PGX-V to acquire 80% of Firesteel's (FTR-V) Copper Creek
May 7th, 2013 - News Release
Prosper Gold Corp. has entered into a letter of intent dated May 6, 2013, with an arm's-length party, Firesteel Resources Inc., to acquire an 80-per-cent interest in the Copper Creek property located in northwestern British Columbia. The LOI will be superseded by a definitive agreement to be entered into between Prosper Gold and Firesteel. The company is a capital pool company listed on the NEX board of the TSX Venture Exchange and the proposed transaction would constitute the company's qualifying transaction under Policy 2.4 of the exchange. Upon successful completion of the qualifying transaction, the company will be a Tier 2 mining issuer.
None of the insiders of the company, or their associates and affiliates, have any interest in the proposed transaction or are otherwise an insider of, or have any relationship with, Firesteel or its direct and indirect shareholders, and the transaction is not a non-arm's-length qualifying transaction as defined under the exchange policies (as such terms are defined by the exchange).
The company and Firesteel anticipate settling and entering into the definitive agreement by June 15, 2013. The proposed transaction is not subject to approval by the company's shareholders as it is not a non-arm's-length qualifying transaction. The company anticipates filing a filing statement detailing the qualifying transaction and related matters in the near future.
Trading in the common shares of the company will remain halted pending the release of further disclosure regarding the proposed transaction, the satisfaction of the initial filing requirements of the exchange and a preliminary review by the exchange. Upon completion of the qualifying transaction, the company expects to be actively engaged in the exploration of the property, as well as the evaluation of other mining properties.
Copper Creek
The Copper Creek property is a porphyry copper-gold discovery located approximately 50 kilometres northwest of Telegraph Creek, B.C., and consists of 19 claims covering approximately 6,800 hectares and contains five alkali, porphyry copper-gold targets in the resource-rich Stikine Arch area of northwestern B.C. The property is 100 per cent owned by Firesteel. Additional information on Copper Creek will be disclosed by the company via a separate news release. A technical report in accordance with National Instrument 43-101 -- standards for disclosure of mineral projects -- is being prepared with respect to the property.
Transaction terms
Under the terms of the LOI, Prosper Gold has an option to earn an 80-per-cent interest in the property which may be exercised by:
- Making cash payments to Firesteel totalling $1-million over four years;
- Issuing a total of one million Prosper Gold shares to Firesteel over a period of four years;
- Incurring exploration expenditures totalling $5-million over four years.
Prosper Gold will be appointed as the operator of the property and will have the exclusive and sole responsibility of administering and carrying out the exploration programs on the property. Additionally, the parties have agreed that upon Prosper Gold exercising the option to earn an 80-per-cent interest, the parties will enter into a joint venture for the further exploration and development of the property.
The parties have agreed that during the period from signing the LOI through to execution of the definitive agreement, each of Prosper Gold and Firesteel will not solicit or accept alternative offers. Subject to satisfactory completion of due diligence, the parties expect to execute the definitive agreement by June 15, 2013.
Concurrent financing
Concurrently with completion of the qualifying transaction, Prosper Gold will complete a financing for proceeds equivalent to at least $2.5-million, or such greater amount to meet the listing requirements of the exchange at a price to be determined in the context of the market by Prosper Gold, acting reasonably. The net proceeds of the qualifying transaction financing will be used to finance the costs of completing the qualifying transaction and for general and administrative expenses and unallocated working capital.
In connection with the qualifying transaction financing, the company may pay finders' fees to arm's-length finders on a portion, or all, of the gross proceeds raised under the qualifying transaction financing, to be settled in cash and/or warrants, subject to the approval of the exchange. The company will disclose further details regarding the qualifying transaction financing.
Management and board of directors
Subject to exchange approval, on completion of the proposed transaction, the management team and the board of directors of Prosper Gold will include the persons identified below:
Peter Bernier -- president, chief executive officer and director
Mr. Bernier has more than 35 years of experience in mineral exploration and project management. Most notably, Mr. Bernier jointly received the 2011 H.H. Spud Huestis award from the Association of Mineral Exploration of British Columbia for excellence in prospecting and mineral exploration. As the founder, president and chief executive officer of Richfield Ventures Corp. Mr. Bernier was responsible for building and managing the Richfield team. Under his leadership Richfield, which was incorporated in 2005, became a publicly traded company on the TSX Venture Exchange in November, 2007. Mr. Bernier strategically obtained financing and personally oversaw investor relations until Richfield was acquired in June, 2011, for a value of over $500-million.
Susanne Bonn -- chief financial officer and director
Ms. Bonn has 27 years experience in financial administration. She has had successful careers in accounting and management in both the public and private sectors. Ms. Bonn became the chief financial officer of Richfield Ventures Corp. shortly after its incorporation in 2005. As chief financial officer and part of the core management team, Ms. Bonn was responsible for all aspects of financial control including developing budgets, preparing financial statements and managing the treasury. In addition, she administered human resources, mineral claims, logistics and legal issues.
Dr. Dirk Tempelman-Kluit, PhD, FGAC -- director
Dr. Tempelman-Kluit has more than 45 years experience working in both British Columbia and the Yukon. Dr. Tempelman-Kluit was previously a director of the Geological Survey of Canada's Cordillean division. More recently, held the position of vice-president of exploration and a director of Richfield Ventures Corp. from 2004 to 2011. Dr. Tempelman-Kluit, the co-recipient the 2011 H.H. Spud Huestis award and highly respected research geologist, recognized the existence of extensive hydrothermal alteration in drill core photographs which indicated the potential for significant gold mineralization on Richfield Blackwater property. In March, 2011, Richfield announced an initial indicated and inferred resource estimate of 4.2 million ounces, due to Dr. Tempelman-Kluit's foresight on the Blackwater property.
Jason Hynes, BSc, MBA -- director
Mr. Hynes is currently vice-president of corporate development for Sabina Gold & Silver Corp. Prior to this, he spent seven years in National Bank Financial's M&A and mining investment banking groups, most recently as a director of Global Metals & Mining in Vancouver, B.C. While there, he assisted companies on identifying and executing mergers and acquisitions, and on implementing financing strategies. Mr. Hynes has worked with producers, developers, explorers and royalty companies, with a particular focus on advising senior management teams and boards on advancing exploration and development-stage assets. Mr. Hynes knowledge and skill greatly contributed to the acquisition of Richfield Ventures by New Gold in 2011.
Jim Miller-Tait, PGeo -- director
Mr. Miller-Tait has over 25 years of continuous exploration, development, underground and open-pit production experience. He is currently the president of Sikanni Mine Development Ltd., his own geological consulting company, which he founded in 1996. Mr. Miller-Tait is also the present exploration manager for Imperial Metals Corp. His experience includes chief geologist for the Oniva Group, and vice-president, exploration, for Selkirk Metals. He has worked extensively in North America, Bolivia and Mexico on grassroot exploration to full production open-pit and underground operations. His experience covers gold, base metals and diamond operations in a multitude of geological settings including vein skarn, volcanogenic massive sulphide, carbonate-hosted, sedex, kibmerlite and porphyries.
Conditions of completion
The proposed transaction is subject to a number of terms and conditions, including the entering into by the parties of the definitive agreement (such agreement to include representations, warranties, conditions and covenants typical for a transaction of this nature), the completion of satisfactory due diligence investigations by Prosper, the completion of a technical report on the property prepared by a qualified person in compliance with NI 43-101, the completion of the qualifying transaction financing and the approval of the exchange. The company will review relevant financial information pertaining to the property during the due diligence process.
Sponsorship
Sponsorship of a qualifying transaction of a capital pool company is required by the exchange, unless an exemption from the sponsorship requirement is available. Prosper Gold intends to apply to the exchange for an exemption from the sponsorship requirement. There is no assurance that the company will be able to obtain such an exemption.
National Instrument 43-101 compliance
The scientific or technical information in this news release has been reviewed and approved by Mr. Tempelman-Kluit, a qualified person under NI 43-101.
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