NGEx Resources (NGQ-T) Announces Proposed Spin-Out of Filo del Sol Project
June 13, '16 - NR
NGEx Resources is pleased to announce its intention to spin out its wholly owned Filo del Sol property (the "Filo del Sol Project") into a wholly owned subsidiary of NGEx, Filo Mining Corp. ("Filo Mining"), through a Plan of Arrangement under the Canada Business Corporations Act (the "Arrangement"). The Arrangement is designed to deliver greater value to shareholders by unlocking the value of the Filo del Sol Project and the Company believes that it will also minimize dilution of the Constellation Project. The Filo del Sol Project is a silver-copper-gold deposit that straddles the international border between San Juan Province, Argentina and Region III, Chile and is comprised of adjacent mineral titles in Chile and Argentina which are 100% controlled by the Company through direct ownership or option agreements.
Upon completion of the Arrangement, Filo Mining will hold a 100% interest in the Filo del Sol Project and focus on the advancement of this project. Over time it is expected that Filo Mining may add new exploration stage projects to its portfolio. NGEx will retain and focus on the advancement of its 60% owned Constellation Project. The Constellation Project is comprised of the Los Helados property in Chile, and the Josemaría property in Argentina. Los Helados is part of a joint venture in which the Company holds 60.72% and Pan Pacific Copper Co., Ltd. holds 39.28%, and Josemaría is part of a joint venture in which the Company holds 60% and Japan Oil, Gas, and Metals National Corporation holds 40%.
Wojtek Wodzicki, President and CEO of NGEx, said, "For the last several years investors have understandably focused on the opportunity provided by the Constellation Project. The proposed spinout will allow NGEx to focus on further advancement of the Constellation Project and on continued efforts to lay the groundwork to enable development of this project. The Filo del Sol Project hosts a large current mineral resource which the Company believes may have exploration upside and an oxidized upper portion where future work will focus on defining the potential to heap leach this material. The creation of Filo Mining is expected to enhance shareholder value by bringing increased investor focus to the potential that we see at Filo del Sol."
The Transaction
The Arrangement will include a transfer of the Filo del Sol Project, along with approximately $3 million in cash, to Filo Mining. Pursuant to the Arrangement, NGEx intends to distribute 100% of the common shares of Filo Mining it receives to NGEx shareholders on a pro rata basis. NGEx shareholders will be entitled to receive one common share of Filo Mining for every four common shares of NGEx held as of the effective date of the Arrangement, expected to be in mid-August, 2016. There will be no change in shareholders' holdings in NGEx as a result of the Arrangement.
Each outstanding stock option of NGEx (an "NGEx Option") will be deemed to be exchanged for a fully-vested replacement stock option of NGEx (an "NGEx Replacement Option") and one quarter of one fully-vested stock option of Filo Mining (a "Filo Option"), and the exercise prices for the NGEx Replacement Options and the Filo Options will be adjusted to reflect the relative value of the shares.
The Arrangement will be subject to Toronto Stock Exchange ("TSX"), regulatory and court approval, as well as approval by not less than two-thirds of the votes cast at the special meeting (the "Meeting") of NGEx shareholders and optionholders (together, the NGEx Securityholders") voting as a single class, scheduled for on or about August 11, 2016. The record date for the Meeting has been set as July 8, 2016. Full details of the Arrangement will be included in the management information circular to be sent to NGEx Securityholders in connection with the Meeting.
Lukas Lundin will become chairman of Filo Mining. The names of additional directors are expected to be announced in the near future. The management team of Filo Mining will consist of Wojtek Wodzicki as CEO, Joyce Ngo as Interim CFO, Bob Carmichael as VP Exploration and Julie Kemp as Corporate Secretary. Changes and additions to the management team will be made as needed and as the Filo del Sol Project progresses.
The Company intends to apply for a listing of the shares of Filo Mining on the TSX Venture Exchange ("TSX-V"). Any such listing will be subject to Filo Mining fulfilling all of the requirements of the TSX-V. The Company also expects to apply for a listing of the shares of Filo Mining on the Nasdaq First North Exchange in Stockholm, Sweden. Any such listing will be subject to Filo Mining fulfilling all the requirements of the Nasdaq First North Exchange.
About the Filo del Sol Project
The Filo del Sol Project is a high sulphidation epithermal copper-gold-silver system associated with a porphyry copper-gold system. It is a very large mineralized system, with dimensions based on wide spaced drill holes, of at least 3.7 kilometres in a north-south direction and 1 kilometre in an east-west direction. The mineralized system includes both disseminated and stockwork mineralization and is open in several directions. The upper portion of Filo del Sol is oxidized and initial leach testing provided encouraging results. Future work will focus on expanding the oxide resource and additional metallurgical test work.
The current mineral resource estimate for the Filo del Sol deposit includes two separate, high grade subsets within a much larger overall resource: a subset of high-grade copper mineralization; and a separate subset of high grade silver mineralization, as shown in the table below.
| | | | | | | Resource Grade | | Contained Metal | Million
Tonnes | Cu
(%) | Au
(g/t) | Ag
(g/t) | CuEq*
(%) | | Cu
(billion lbs) | Au
(million oz) | Ag
(million oz) | | Total Inferred Resource (0.30% Copper Equivalent cutoff) | | 381.0 | 0.39 | 0.33 | 12.2 | 0.69 | | 3.3 | 4.0 | 149.8 | | Included High Grade Inferred Copper Resource (0.50% Cu cutoff) | | 53.0 | 0.95 | 0.34 | 9.7 | 1.23 | | 1.1 | 0.6 | 16.5 | | Included High Grade Inferred Silver Resource (50 gpt Ag cutoff) | | 23.1 | 0.46 | 0.38 | 123.2 | 1.93 | | 0.2 | 0.3 | 91.4 | | | | | | | | | | | *Copper equivalent assumes metallurgical recoveries of 84% for copper, 70% for gold and 77% for silver based on similar deposits, as only limited acid-leach metallurgical testwork has been done on Filo del Sol mineralization, and metal prices of US$3/lb copper, US$1300/oz gold, US$23/oz silver. The CuEq formula is: CuEq=Cu+Ag*0.0102+Au*0.5266.
The mineral resource estimate has an effective date of August 26, 2015 and was completed by James N. Gray, P.Geo. of Advantage Geoservices Ltd., an Independent Qualified Person as defined by National Instrument 43-101. Further details of the estimation methods and procedures are described in the Technical Report "Updated Mineral Resource Estimate for the Filo del Sol Property, Region III of Atacama, Chile and San Juan Province, Argentina" dated December 11, 2015 which is available under the Company's profile at www.sedar.com or on the Company's website.
Qualified Persons
Technical disclosure for the Filo del Sol Project included in this press release, has been reviewed and approved by Bob Carmichael, P. Eng. (BC). Mr. Carmichael is NGEx's Vice-President of Exploration and a Qualified Person ("QP") under National Instrument 43-101 Standards of Disclosure for Mineral Projects.
About NGEx
NGEx is a Canadian mineral exploration company with exploration projects in Chile and Argentina. The Company's shares are listed on the Toronto Stock Exchange and on Nasdaq Stockholm under the symbol "NGQ". The Company's focus is on three advanced exploration stage copper-gold systems located on a contiguous land package that the Company holds in Chile's Region III and adjacent San Juan Province, Argentina. Los Helados is part of a joint venture in which the Company holds approximately a 60.72% interest and Pan Pacific Copper Co., Ltd. holds approximately a 39.28% interest. Josemaría is part of a joint venture in which the Company holds 60% and Japan Oil, Gas, and Metals National Corporation (JOGMEC) owns 40%. NGEx holds a 100% interest in the Filo del Sol Project. In addition to these more advanced projects, the Company holds a portfolio of 100% owned early stage exploration projects located in Chile and Argentina.
Additional Information
The information in this release is subject to the disclosure requirements of NGEx under the Swedish Securities Market Act and/or the Swedish Financial Instruments Trading Act. This information was publicly communicated on June 13, 2016 at 6:00 p.m. Pacific Time.
On behalf of the board
Wojtek Wodzicki, President and CEO
CONTACT INFORMATION:
NGEx Resources Inc.
Sophia Shane
Corporate Development
(604) 689-7842
ngexresources.com
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