Reliant Gold and Goldcorp Agree to the Terms of a Proposed Purchase by Goldcorp of Reliant Gold's 49% Interest in the Borden Lake South JV
TORONTO, ONTARIO--(Marketwired - Jun 2, 2016) - Reliant Gold Corp. ("Reliant" or the "Corporation") (TSX VENTURE:REC) is pleased to announce that it has reached agreement, on June 1, 2016, on the principal commercial terms for a proposed purchase of Reliant's 49% interest (the "Contemplated Transaction") in the Borden Lake South mineral claims ("Borden Lake South") by Goldcorp Inc. Borden Lake South is comprised of 20 mining claims representing 294 claim units covering approximately 4,704 hectares, located 10 kilometres east of the Town of Chapleau, Ontario.
Goldcorp is the successor to Probe Mines Ltd. ("Probe"), which entered into a Joint Venture Agreement with Reliant dated March 12th, 2014 (the "2014 JV Agreement"), whereby a joint venture (the "Borden Lake South JV") was created between the parties with respect to Borden Lake South.
Under the terms of the 2014 JV Agreement, Goldcorp is the Operator of the Borden Lake South JV and holds a fifty-one percent (51%) interest in the Borden Lake South JV, with Reliant currently holding the remaining forty-nine percent (49%) interest. Additional details of the 2014 JV Agreement are fully described in Reliant's press release dated April 1, 2014.
The Contemplated Transaction proposes a purchase by Goldcorp of Reliant's 49% interest in the Borden Lake South JV and Borden Lake South on the following terms:
- At the Closing of the Contemplated Transaction, Goldcorp will pay Reliant $250,000 in cash; and
- At the Closing of the Contemplated Transaction, Goldcorp will grant Reliant a one-percent (1%) royalty on the net smelter returns from the future production and sale of minerals from Borden Lake South (the "NSR"), with Goldcorp having the right, at any time, to purchase fifty percent (50%) of the NSR from Reliant by making a cash payment of $500,000 (plus any applicable taxes) to Reliant, and a right of first refusal in favour of Goldcorp with respect to any future transfers of the NSR by Reliant.
The Contemplated Transaction is being entered into by the parties as a variation to the 2014 JV Agreement, which itself, was the result of a variation of an existing relationship between Probe and Reliant with respect to Borden Lake South under an option agreement made effective as of the 12th day of March, 2012, pursuant to which Probe had an option to acquire up to a 70% interest in Borden Lake South.
The completion of the Contemplated Transaction is subject to execution and delivery by the parties of a final and definitive agreement of purchase and sale (the "Definitive Agreement") by no later than July 2, 2016, and receipt of all necessary board and regulatory approvals. It is anticipated that Reliant will not require shareholder approval for completion of the Contemplated Transaction, since the (1) Contemplated Transaction does not represent a disposition of more than 50% of Reliant's assets; (2) the parties to the Contemplated Transaction are at Arm's Length to one another, and are not related parties; and (3) the Contemplated Transaction, once completed, will raise working capital for Reliant without any dilution to Reliant's existing shareholders since no new securities will be issuable by Reliant as a result of the Contemplated Transaction. The Borden South JV will be terminated upon the closing of the Contemplated Transaction.
In addition to its 49% interest in Borden Lake South, Reliant currently holds a 100% interest in the East Bay Property, comprised of 56 mineral claims totalling 896 hectares in the McVicar Lake area, located approximately 90 kilometres west of Pickle Lake, Ontario, and 130 kilometres southwest of Goldcorp Inc.'s Musselwhite Gold Mine.
ABOUT RELIANT
Reliant is a junior mineral exploration company with an experienced management team engaged in the acquisition, exploration and development of properties for the mining of precious and base metals. Reliant currently holds (1) a 49% interest in Borden Lake South, comprised of 20 mining claims representing 294 claim units covering approximately 4,704 hectares, located 10 kilometres east of the Town of Chapleau, Ontario and (2) a 100% interest in the East Bay Property, comprised of 56 mineral claims totalling 896 hectares in the McVicar Lake area, located approximately 90 kilometres west of Pickle Lake, Ontario, and 130 kilometres southwest of Goldcorp Inc.'s Musselwhite Gold Mine. The common shares of Reliant trade on the TSX Venture Exchange under the stock symbol "REC". The Corporation currently has 22,945,169 common shares issued and outstanding.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of Reliant or the industry in which it operates to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this press release, the words "estimate", "believe", "anticipate", "intend", "expect", "plan", "may", "should", "will", the negative thereof or other variations thereon or comparable terminology are intended to identify forward-looking statements. Such statements reflect the current expectations of the management of Reliant with respect to future events based on currently available information and are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from those expressed or implied by those forward-looking statements. These risks and uncertainties are detailed from time to time, including, without limitation, under the heading "Risk Factors", in Reliant's prospectus and in other continuous disclosure documents that will be filed by Reliant from time to time with the Ontario, Alberta or British Columbia Securities Commissions which are available at www.sedar.com and to which readers of this press release are referred for additional information concerning Reliant, its prospects and the risks and uncertainties relating to Reliant and its prospects. New risk factors may arise from time to time and it is not possible for management to predict all of those risk factors or the extent to which any factor or combination of factors may cause actual results, performance and achievements of Reliant to be materially different from those contained in forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, Reliant cannot assure investors that actual results will be consistent with these forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.
The forward-looking information contained in this press release is current only as of the date hereof. Reliant does not undertake or assume any obligation, except as required by law, to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
No securities commission or regulatory authority has approved or disapproved the contents of this press release.
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.
Contact
Reliant Gold Corp.
Kabir Ahmed
Chairman, President, CEO and Director
(416) 820-4107
info@reliantgold.com