Mr. Max Sali reports
BARRIAN MINING ENTERS INTO DEFINITIVE AGREEMENT TO ACQUIRE THE KINSLEY MOUNTAIN GOLD PROJECT FROM LIBERTY GOLD
Barrian Mining Corp. has entered into an arm's-length definitive purchase option agreement dated Nov. 29, 2019, with Liberty Gold Corp., whereby Barrian has been granted the exclusive right to acquire Liberty Gold's 79.1-per-cent interest in Kinsley Gold LLC (JVCO), a limited liability company holding ownership and leasehold rights in and to 513 unpatented claims and five leased patented claims, covering 4,187 hectares, known as the Kinsley Mountain project, located in southeastern Elko county, Nevada.
Kinsley Mountain Project
Kinsley Mountain Project hosts a Carlin-style, sedimentary rock-hosted gold deposit located south of Nevada Gold Mine LLC's' Long Canyon deposit, with a stratigraphic and structural setting and gold mineralization similar to other sedimentary rock-hosted gold systems in the underexplored area east of the Carlin Trend in northeast Nevada. Mineralization hosted on nearby properties is not necessarily indicative of mineralization that may be hosted on the Kinsley Mountain Project. Kinsley is host to a past-producing mine with an extensive exploration database, current Mineral Resources, and numerous, untested gold targets.
The Kinsley Mountain Mineral Resource2 includes the high grade Western Flank zone in addition to near-surface oxide ounces. According to Liberty Gold's technical report dated effective October 15, 2015 and completed by Michael Gustin, Ph.D, CPG, The Kinsley Mountain Mineral Resource comprises a 5.53 million tonne Indicated Resource containing 405,000 ounces of gold at a grade of 2.27 grams-per-tonne (g/t) gold and a 3.36 million tonne Inferred Resource containing 122,000 ounces gold at a grade of 1.13 g/t gold. A subset of high grade mineralization hosted in the Secret Canyon Shale at the Western Flank zone includes a 1.46 million tonne Indicated Resource containing 284,000 ounces gold at an average grade of 6.04 g/t gold. At a 3 g/t cut-off grade, most of the resource ounces at the Western Flank remain, including 845,000 tonnes containing 248,000 ounces gold at an average grade of 9.15 g/t gold1. To the best of Barrian's knowledge, information, and belief, there is no new material scientific or technical information that would make the disclosure of the mineral resource inaccurate or misleading.
The Kinsley Mountain Project is held by JVCO, a limited liability company owned 79.1% by Pilot Gold (USA) Inc. ("Pilot"), a wholly owned subsidiary of Liberty Gold, and 20.9% by Intor Resources Corporation, a wholly owned subsidiary of Nevada Sunrise Gold Corp., pursuant to a limited liability company agreement of JVCO between Pilot and Intor. Liberty Gold originally purchased the option to earn a controlling interest in the Kinsley Mountain Project in September 2011. Liberty Gold is the project operator of the Kinsley Mountain Project.
Maximilian Sali, CEO and Co-Founder comments, "The acquisition of the Kinsley Mountain gold project from Liberty Gold will give Barrian a NI-43-101 mineral resource with 80 % of this project unexplored to allow for potential further high-grade discoveries. Kinsley has previously produced 138,000 ounces of gold in the mid to late 90s and Liberty has engaged in a number of drill programs since 2015 and we have engaged an independent Qualified Person to complete a NI 43-101 technical report on the project."
In order to exercise the Option, Barrian must issue common shares and make certain cash payments as follows:
- Pay USD$2,500,000 in cash, pay USD$124,570 in respect of certain bonds/insurance relating operations on the Kinsley Mountain Project and issue 2,000,000 common shares (post-Consolidation) of Barrian within 45 days of conditional approval ("Financing Deadline") by the TSX Venture Exchange (the "Exchange") of the Option Agreement ("Initial Payments");
- Pay USD$2,500,000 in cash and issue 1,000,000 common shares (the "First Anniversary Shares") of Barrian on or before the first anniversary of conditional Exchange approval of the Option Agreement;
- Issue USD$2,500,000 of common shares of Barrian on or before the second anniversary of conditional Exchange approval of the Option Agreement.
The Initial Payment common shares and the First Anniversary Shares will be subject to a voluntary 12-month hold period from the date of issuance.
During the term of the Option, Barrian is also required to pay all applicable governmental mining claim maintenance fees that are required to keep the Kinsley Mountain Project in good standing and satisfy Liberty Gold's proportionate share of expenditure obligations on the Kinsley Mountain Project. These include certain minimum exploration expenditures and advance royalty payments to Nevada Sunrise LLC ("Sunrise LLC"), a private holding company unrelated to Nevada Sunrise, in accordance with an underlying lease agreement in respect of 144 of the 513 total unpatented claims compromising the Kinsley Mountain Project owned by Sunrise LLC. Pursuant to the underlying lease agreement, the Kinsley Mountain Project is subject to a 2% Net Smelter Return royalty ("NSR") payable to Sunrise LLC (which NSR may be reduced to 1% by paying USD$2,000,000 in cash).
The five patented claims are subject to a 2% NSR royalty payable by JVCO to Marvil Investments LLC.
Upon Barrian exercising the Option, Liberty Gold shall have a 1% NSR royalty on 79.1% of all proceeds received by Barrian attributable to the production and sale of all products produced from the Kinsley Mountain Project (which NSR may be reduced to 0.5% by Barrian paying USD$500,000 in cash).
Certain conditions precedent to closing the Option Agreement include:
- Barrian having obtained adequate financing to make the Initial Payments to Liberty Gold on or prior to the Financing Deadline;
- The right of first refusal ("ROFR") held by Nevada Sunrise in respect of the transfer by Liberty Gold of its 79.1% interest in Kinsley Gold LLC shall have expired without having been exercised by Nevada Sunrise or Nevada Sunrise shall have waived its rights under the ROFR.
Prior to closing the proposed transaction with Liberty Gold, Barrian intends to complete a consolidation on the basis of two (2) pre-consolidation shares for one post-consolidation share (the "Consolidation").
Private Placement Financing
In connection with the Option Agreement, Barrian intends to complete a financing (post-Consolidation) for minimum gross proceeds of C$7,500,000 (the "Financing"). The terms and price of the Financing will be determined by Barrian in the context of the market.
Proceeds raised from the Financing will be used to make the Initial Payments, to fund its maintenance and exploration costs on its properties, and for general working capital purposes.
The proposed transaction is subject to, among other things, the completion of an updated National Instrument 43-101 - Standards of Disclosure for Mineral Projects Technical Report on the Kinsley Mountain Project, and obtaining all necessary regulatory approvals, including the Exchange. If complete, the proposed transaction will constitute a "Fundamental Acquisition" as such term is defined in Exchange Policy 5.3. The common shares of the Company will remain halted until the Exchange has reviewed the proposed transaction in accordance with Exchange Policy 5.3.
About Barrian Mining Corp.
Barrian Mining Corp. is a new gold exploration company focused on acquiring and advancing precious metal projects in the United States. Barrian's flagship Bolo Project, located 90 km northeast of Tonopah Nevada, hosts Carlin type gold mineralization. In addition, Barrian has an earn-in option to acquire 100% of the "Sleeper Project" which is located in the historic Mogollon epithermal silver-gold mining district of New Mexico. Barrian also has the option to acquire 100% of the Troy Canyon Project located in Nevada. Barrian is run by a strong management and technical team consisting of capital market and mining professionals with the goal of maximizing value for shareholders through new mineral discoveries, committed long-term partnerships, and the advancement of exploration projects in geopolitically favourable jurisdictions. Barrian trades on the TSXV under the ticker symbol "BARI", on the OTC markets under the symbol "BARRF" and on the German (Frankfurt) exchanges using the ticker symbol "BM5".
The scientific and technical information contained in this news release as it relates to the Kinsley Mountain Project has been reviewed and approved by Kristopher J. Raffle, P.Geo. (BC) Principal and Consultant of APEX Geoscience Ltd. of Edmonton, AB, a Director of Barrian and a "Qualified Person" as defined in National Instrument 43-101 - Standards of Disclosure
for Mineral Projects. Mineralization hosted on nearby properties is not necessarily indicative of mineralization that may be hosted on the Kinsley Mountain Project.
We seek Safe Harbor.
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