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Banyan Gold Corp
Symbol BYN
Shares Issued 98,937,856
Close 2019-10-01 C$ 0.05
Market Cap C$ 4,946,893
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Banyan Gold starts drilling at Aurex-McQuesten

2019-10-02 06:23 ET - News Release

Ms. Tara Christie reports

BANYAN COMMENCES DRILL PROGRAM AT AUREX-MCQUESTEN PROJECT, YUKON AND RAISES $705K FIRST TRANCHE

Banyan Gold Corp. has commenced a 3,500-metre diamond drill program to follow up on the compelling results returned earlier this season from the Airstrip zone and the new discovery at the Powerline zone, both on the Aurex-McQuesten project, Yukon.

This second phase drilling campaign has a twofold exploration focus:

  1. Expansion of the drill defined strike length of the Airstrip zone from the current 500 metres to greater than one kilometre; with a target of doubling the interpreted mineralization volume;
  2. Stepout drilling at the Powerline zone, a new discovery of a modelled parallel, structurally controlled zone of gold mineralization located one kilometre south of the south Airstrip zone.

"The Powerline discovery of 2019 represents an entirely new, but genetically related area of potentially broad, near-surface gold mineralization at Aurex-McQuesten," stated Tara Christie, president and chief executive officer of Banyan. "This area, has the potential to greatly increase the gold mineralization footprint on the project and could meaningfully add tonnage to the mineralized gold zones known on the property. Powerline's discovery and the systematic drillout of the Airstrip zone currently under way is the result of applying Banyan's geologic model and increases the potential of locating additional near-surface gold mineralization of the property."

The Airstrip zone displays four distinct styles of mineralization:

  1. Sheeted quartz veins with pyrite-pyrrhotite-plus/minus-arsenopyrite-plus/minus-chalcopyrite;
  2. Pervasive disseminated pyrrhotite;
  3. Stratabound retrograde skarn-(actinolite-chlorite)-altered horizons with semi-massive to massive pyrrhotite-plus/minus-arsenopyrite-plus/minus-sheelite-plus/minus-chalcopyrite;
  4. Quartz-calcite-siderite breccias and veins with sphalerite-galena-plus/minus-pyrrhotite.

This evidence of multiple phases of mineralization reflects a well-mineralized gold system on the project as is expected in a prolifically mineralized system such as the greater Keno Hill-Dublin Gulch district.

The fall 2019 drill program is expected to be completed before mid-November and the results from this work program are anticipated to be developed into a maiden National Instrument 43-101-compliant, near-surface, bulk-tonnage gold resource by the Banyan team over the winter. The area's existing infrastructure affords year-round access and greatly aids all aspects of exploration, and has been important for nearby development and production activities at Alexco and Victoria Gold.

The technical information in this news release has been reviewed and approved by Paul D. Gray, PGeo, a qualified person as defined by NI 43-101.

Banyan financing

Banyan Gold is pleased to announce that subject to final Toronto Stock Exchange approval it has closed the first tranche of $705,120 of a non-brokered private placement that will finalize before Oct. 15, 2019, with up to $1,106,000 in total. This is part of two concurrent financings to raise up to $1.75-million, including common shares, flow-through shares and charity flow-through.

The first tranche private placement consists of both flow-through shares and units as described below:

  • 7,015,909 flow-through shares (within the meaning of Subsection 66(15) of the Income Tax Act (Canada)) being purchased at a price of 5.5 cents per share for gross proceeds of $385,875;
  • 5,804,450 units being purchased for gross proceeds of $319,245, priced at 5.5 cents per unit consisting of one share and one-half of a purchase warrant, each full warrant being exercisable for a period of 18 months from closing into one common share at a price of nine cents per share subject to an acceleration clause note below.

The warrants, which form part of the non-flow-through units, may have their expiry time accelerated at any time prior to the expiry of the warrants if the volume-weighted average trading price of the corporation's shares on the TSX Venture Exchange is greater than 15 cents for 20 consecutive trading days, at which time the corporation may give notice in writing to the warrantholders within 10 days of such an occurrence that the warrants shall expire on the 30th day following the giving of such notice.

Net proceeds will be used on the fall exploration program on the Aurex-McQuesten project and for general working capital. The remainder of the financing, which will consist of both flow-through shares and non-flow-through units, will be completed within the next two weeks to an overall total of $1,106,000.

Banyan also wishes to announced that it will be raising up to $644,000 via charity flow-through units priced at 7.7 cents per unit. The units (up to 8,363,864 in total) will consist of one flow-through share (within the meaning of Subsection 66(15) of the Income Tax Act (Canada)) and one-half of a share purchase warrant exercisable at nine cents for a period of 18 months from closing with the same acceleration clause as noted above. Due to the mechanics of this financing it will be closing at a later date within the next two weeks and be backed by industry partners.

The shares issued will be subject to the customary four-month-and-one-day hold period. No commissions will be paid for the offering. The shares were offered for sale on a private placement basis pursuant to applicable exemptions from the prospectus and registration requirements.

Certain insiders of the company participated in the first tranche of the private placement. Such participation represents a related-party transaction under Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions, but the transaction is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the subject matter of the transaction, nor the consideration paid, exceed 25 per cent of the company's market capitalization. The private placement was approved by all of the independent directors of the company. Pursuant to the private placement, members of the board of the company subscribed for units in an aggregate amount of $22,000.

About Banyan Gold Corp.

Banyan Gold is focused on gold exploration projects that have the geological potential, size of land package and proximity to infrastructure that is advantageous for a mineral project to have potential to become a mine. The company's Yukon-based projects both fit this model and the company's objective is to gain shareholder value by advancing projects in its pipeline.

We seek Safe Harbor.

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