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AIS Resources Ltd
Symbol AIS
Shares Issued 113,472,909
Close 2020-11-17 C$ 0.085
Recent Sedar Documents

A.I.S. firms up Fosterville, Kingston acquisitions

2020-11-17 09:55 ET - News Release

Mr. Phillip Thomas reports

A.I.S. RESOURCES SIGNS FOSTERVILLE-TOOLLEEN AND KINGSTON GOLD PROJECT AGREEMENTS AND ANNOUNCES FINANCING

A.I.S. Resources Ltd. has signed definitive agreements to acquire the Fosterville-Toolleen and Kingston gold projects.

Its primary focus is the Fosterville-Toolleen drill-ready gold project

A.I.S.'s primary focus in the near term will be to make Fosterville-Toolleen drill ready. Exploration licence EL006001 is located only 12 kilometres (km) from and is the closest property to Kirkland Lake's nine-million-ounce-gold Fosterville gold (Au) mine. The Fosterville mine is the biggest producing mine in Victoria, Australia (619,000 million ounces (oz) in 2019) and one of the richest grade mines in the world at 31 grams per tonne (g/t) gold. To date, the Fosterville mine has produced more than two million oz of gold worth more than $3.7-billion (U.S.) at today's prices. Fosterville-Toolleen covers an area of 26 square kilometres -- approximately the same size as the Fosterville mine's 28 square kilometres.

The A.I.S. management team is delighted with the acquisition because:

  • Approximately 30 to 45 oz of gold nuggets have been located on the exploration licence.
  • An open-cut alluvial mine has been operated and there are two unnamed historic shafts.

With the Mt. Williams fault nearby, there are many geological similarities to the Fosterville mine. There is significant market anticipation on the results of the Department of Jobs, Precincts and Regions tender for block 3 and block 4, which will be awarded in March, 2021, and are adjacent to Toolleen. Earth Resources Victoria estimated that 75 million oz of gold remains undiscovered in central Victoria.

A.I.S. Resources prepares for drilling

Preparations are being made to conduct a deep ground-penetrating radar (DGPR) geophysics program on the property in December, 2020, and a geochemical soil survey to continue the work completed to date. This will enhance the targeting of drill locations, which is scheduled for the new year.

Fosterville goldfield's rich geological structure

The Fosterville goldfield is hosted in lower Ordovician turbidite sediments and is located in the eastern margin of the Bendigo-Ballarat geological zone. The sediments are an undifferentiated sequence of sandstones, siltstones and shales, which have subsequently been folded. The same geology can be seen on the Fosterville-Toolleen property. Faults are well developed throughout the area, with the Fosterville fault being the dominant structure exhibiting a strike length of over eight km. The Fosterville goldfield is composed of numerous deposits, which are located along two main controlling structures -- the Fosterville fault and the O'Dwyers South line.

The Fosterville Robbin's Hill open-cut mine has total mineral resources of about one million oz averaging four g/t with much higher grades and resources at depth. It successfully mined the alluvials and subsequently targeted the deeper reef gold in black shales and quartz.

Gold nuggets from the Devonian glacials, transported from nearby reef systems, have been found on EL006001. The Mt. Williams fault is on one side of the property and the Whitelaw fault on the other side.

These gold nuggets are mostly well water worn but some nuggets are attached to quartz, which implies a local source. Quartz reefs are known to be in the vicinity in addition to multiple older leads and they could both be the source of the nuggets at Toolleen.

Toolleen initial exploration strategy -- alluvial leads

The initial exploration strategy for Toolleen focuses on assessing the potential of the alluvial leads that have been a source of gold for Fosterville in its open-pit mining. The DGPR tests were conducted to confirm the location of the alluvial terraces and gain an understanding of their shape and dimensions. Shallow air core drilling followed. To date, only a small section of EL006001 has been explored.

The survey results are interpreted to show alluvial terraces down to approximately 10 m depth and up to 50 m width, with internal gutters. A.I.S. Resources intends to use geophysics to improve targeting of the drill holes and conduct bulk sampling in past pits and unnamed shafts.

Toolleen-Fosterville acquisition terms

A.I.S. will acquire 100-per-cent interest by paying $375,000 (Australian) ($356,250 (Canadian)) and issuing A.I.S. shares equal to $375,000 (Australian) ($356,250 (Canadian)) to the vendor. A 1-per-cent net smelter return (NSR) is payable on all gold production. A.I.S. has paid a deposit of $200,000 (Australian) and will pay the balance of the cash and issue the shares upon acceptance of the TSX Venture Exchange.

Kingston acquisition terms

A.I.S. will make a partial payment of $125,000 (Australian). Upon receipt of TSX-V acceptance, A.I.S. will pay an additional $125,000 (Australian) and issue four million common shares of the company and four million share purchase warrants exercisable at 15 cents for a period of five years. The vendor will retain a 1-per-cent NSR up to a cap of 50,000 oz of gold. In summary, A.I.S. will receive 15 per cent of gold sales revenue from the vendor's mining activities outside of the vendor's PL007020 on EL006318 where the shaft started inside PL007020. A.I.S.'s plans for Kingston will be described in a dedicated news release to be issued in the near future.

Private placement financing

In conjunction with the signing of the definitive agreements, A.I.S. announces a non-brokered private placement of up to 10 million units at a price of seven cents per unit for gross proceeds of $700,000. The proceeds will be used for acquisition and exploration costs and general working capital purposes.

Each unit consists of one common share and one transferrable share purchase warrant. Each warrant will entitle the holder thereof to purchase one additional common share for a period of 12 months from the closing date of the offering at a price of 10 cents per common share provided that, if the closing price of the common shares of the company on any stock exchange or quotation system on which the common shares are then listed or quoted is equal to or greater than 15 cents for a period of 15 consecutive trading days, the company will have the right to accelerate the expiry of the warrants to a date that is not less than 10 business days from the date notice is given. The company may pay finders' fees of up to 8 per cent cash and 8 per cent finders' warrants on a portion of the placement.

Closing of the private placement is subject to acceptance by the TSX Venture Exchange. All securities issued in connection with the private placement will be subject to a four-month hold period from the closing date under applicable Canadian securities laws.

Certain directors and officers are expected to participate in the private placement. Such participation is considered a related-party transaction within the meaning of Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions). The related-party transaction will be exempt from minority approval, information circular and formal valuation requirements pursuant to the exemptions contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101, as neither the fair market value of the gross securities to be issued under the private placement nor the consideration to be paid by the insiders will exceed 25 per cent of the company's market capitalization. A material change report will be filed less than 21 days before the closing date of the transactions contemplated by this news release. The company believes this shorter period is reasonable and necessary in the circumstances.

Technical information in this news release has been reviewed and approved by Phillip Thomas, chief executive officer of A.I.S., who is a qualified person under the definitions established by National Instrument 43-101.

About A.I.S. Resources Ltd.

A.I.S. Resources is a publicly traded investment issuer listed on the TSX Venture Exchange focused on precious and base metals exploration. A.I.S.'s value-add strategy is to acquire prospective exploration projects and enhance their value by better defining the mineral resource with a view to attracting joint venture partners and enhancing the value of its portfolio. The company is managed by a team of experienced mining and geological professionals, with a record of successful capital markets achievements. In November, 2020, A.I.S. acquired the NSW Yalgogrin gold project joint venture, the Fosterville-Toolleen gold project and the Kingston gold project in Victoria, Australia.

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