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Gold Line Resources Ltd
Symbol GLDL
Shares Issued 84,282,485
Close 2021-04-07 C$ 0.38
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Gold Line enters definitive deal for Oijarvi, Solvik

2021-04-07 20:13 ET - News Release

Mr. Adam Cegielski reports

GOLD LINE RESOURCES AND EMX ROYALTY CORP SIGN DEFINITIVE AGREEMENT WITH AGNICO EAGLE FOR OIJARVI AND SOLVIK GOLD PROJECTS

Gold Line Resources Ltd. and EMX Royalty Corp. have entered into a definitive agreement with Agnico Eagle Mines Ltd., pursuant to which Gold Line will acquire a 100-per-cent interest in Agnico's Oijarvi gold project located in central Finland and the Solvik gold project located in southern Sweden, for an aggregate purchase price of $10-million (U.S.) comprising cash and shares of each of Gold Line and EMX. Agnico will retain a 2-per-cent net smelter return (NSR) royalty on the projects, 1 per cent of which may be purchased at any time by EMX for $1-million (U.S.).

Adam Cegielski, president, chief executive officer and director of Gold Line, comments: "These highly prospective gold projects have returned promising exploration results in the past, and we see significant potential to expand the historical resource at Oijarvi and make new gold discoveries. We have already identified several areas to target for immediate exploration and look forward to working closely with our partners at EMX towards unlocking value from the projects."

David M. Cole, president, CEO and director of EMX, comments: "We are pleased to further our strategic relationship with Gold Line. These advanced projects enhance Gold Line's value proposition and provide EMX with additional royalty exposure in two emerging gold belts."

Transaction highlights:

  • Gold Line to acquire 100-per-cent ownership of two advanced exploration projects: The acquisition of two advanced-stage gold exploration projects in Finland and Sweden will augment and expand Gold Line's existing portfolio in the Nordic region. Gold Line and EMX already have active, multiasset exploration programs under way in the Gold Line belt region of northern Sweden. The transaction will result in Gold Line acquiring a 100-per-cent ownership interest in these projects, and EMX will gain additional royalty exposure in two emerging gold belts.
  • Existing resource base with strong expansion and discovery potential: The Oijarvi gold project contains the drill-defined Kylmakangas deposit, with a historical inferred mineral resource of 1.89 million tonnes (Mt) grading 4.11 grams per tonne (g/t) gold (Au) for 250,000 ounces Au and 31.11 g/t silver (Ag) for 1,896,000 ounces Ag (1). The mineralized system remains open for expansion at depth and along strike of the 1.5-kilometre (km) mineralized trend of known mineralization. In addition to the Kylmakangas deposit, reconnaissance drilling by Agnico has identified additional zones of mineralization both along trend and as parallel zones of mineralization elsewhere on the Oijarvi gold project. Several of these peripheral targets merit follow-up.
  • Novel grassroots discovery in southern Sweden: The Solvik gold project is a novel discovery of quartz vein and shear-zone-hosted gold mineralization in southern Sweden, in an area that has seen little historical gold exploration. Five key areas at Solvik contain drill-defined zones of mineralization, with multiple untested targets elsewhere on the property, although no mineral resources have been reported at Solvik.
  • Significant technical database to support a renewed exploration focus: Three hundred thirty-five holes have been drilled to date across the projects for a total of 60,218 metres (m). Historical drill intercepts include 22.6 g/t of gold and 126.3 g/t of silver over 11.0 m (estimated true width) at the Oijarvi gold project and 2.50 g/t Au over 19.4 m (estimated true width) at the Solvik gold project (2).
  • Gold Line and EMX to expand strategic partnership: EMX will receive additional shares in Gold Line that will increase EMX's ownership position. Gold Line will continue to work closely with EMX as its exploration partner in the region and has already commenced planning to expand Gold Line's 2021 exploration program to incorporate several high-priority opportunities identified on the projects.

(1) See Agnico news release dated Feb. 13, 2013, also unpublished Agnico Eagle-Kylmakangas Au-Ag mineralization prospectus report, effective date July 15, 2019. A qualified person has not done sufficient work to classify the historical resource estimate discussed above as a current mineral resource, and Gold Line is not treating the historical estimate as a current mineral resource. Significant data compilation, re drilling, resampling and data verification may be required by a qualified person before the historical estimate can be classified as a current mineral resource. The historical resource estimate is presented only for the purpose of describing the extent of gold mineralization and to outline the exploration potential. This historical resource estimate should not be relied upon.

Oijarvi gold project

The Oijarvi gold project is a 1,641-hectare advanced exploration project located approximately 350 km south of Agnico's Kittila mine and 85 km east of the city of Kemi, Finland. The property covers a late Archean-age greenstone belt known as the Oijarvi greenstone belt, similar to those found elsewhere in Finland and in the Canadian Shield, that hosts several gold-bearing zones within the project area.

A total of 292 holes have been drilled to date across the project for a total of 51,854 m. Several holes have intersected significant gold values over large thicknesses, including 22.6 g/t Au and 126.3 g/t Ag over 11.0 m (estimated true width). Mineralization is developed in and around swarms of orogenic-style quartz veins associated with quartz-feldspar porphyry intrusions, and with disseminated sulphides in sediments, the latter style of mineralization only being recently recognized in the district.

The project contains the drill-defined Kylmakangas deposit, which comprises a historical inferred mineral resource of 1.89 Mt grading 4.11 g/t Au for 250,000 oz Au and 31.11 g/t Ag for 1,896,000 oz Ag. The mineralized system remains open at depth, and along strike toward southwest and northeast. A qualified person has not done sufficient work to classify the historical resource estimate discussed above as a current mineral resource, and Gold Line is not treating the historical estimate as a current mineral resource. Significant data compilation, redrilling, resampling and data verification may be required by a qualified person before the historical estimate can be classified as a current mineral resource. The historical resource estimate is presented only for the purpose of describing the extent of gold mineralization and to outline the exploration potential. This historical resource estimate should not be relied upon.

(2) The historical drilling was reported by Agnico. Gold Line has not done sufficient work to verify these drill results but believes the drill results to be reliable and relevant.

Reconnaissance drilling 1.8 km to the southwest of the Kylmakangas deposit intersected gold mineralization in the same stratigraphic position as Kylmakangas, with little to no drilling in between. The sediment-hosted gold mineralization described above was intercepted in drill hole SAR09001 to the south of the main Kylmakangas zone. These targets are expected to be prioritized by Gold Line for follow-up drilling.

Solvik gold project

The Solvik gold project is a 9,240-hectare advanced exploration project located approximately 16 km south from past-producing Harnas gold mine in southwestern Sweden. Gold mineralization at Solvik occurs in quartz veins and breccias developed along deformation zones, and in quartz-sericite-altered host rocks. Deformation zones mapped and documented by Agnico's work at Solvik total over 55 km in cumulative strike length, which represents considerable upside exploration potential.

A total of 43 holes have been drilled to date across the project for a total of 8,364 m. Several holes have intersected gold mineralization with the best intercepts being 2.50 g/t Au over 19.4 m and 2.71 g/t Au over 8.5 m (estimated true widths). Over 100 channel samples from outcrops and boulders have returned a number of surface high-grade Au grades between 1.0 g/t Au to 90.1 g/t Au.

There was little to no modern exploration conducted in the area prior to Agnico's exploration work in 2011, and the project area remains underexplored.

Transaction details

Pursuant to the terms of the agreement, Gold Line will purchase the projects from Agnico, and Agnico will retain a 2-per-cent NSR royalty on the projects, 1 per cent of which may be purchased at any time by EMX for $1-million (U.S.).

Consideration for the transaction is $10-million (U.S.), comprising $7-million (U.S.) in cash, $1.5-million (U.S.) in common shares of EMX and $1.5-million (U.S.) in common shares of Gold Line, which shall be paid to Agnico as shown in the attached table.

Date                                       Cash payments           EMX shares     Gold Line shares
                                                    (U.S.)               (U.S.)               (U.S.)

Upon signing of the agreement                   $750,000             $375,000             $375,000
On the first anniversary of the
agreement                                     $1,500,000             $500,000             $500,000
On the second anniversary of the
agreement                                     $1,750,000             $625,000             $625,000
On the third anniversary of the
agreement                                     $3,000,000                    -                    -
Total                                         $7,000,000           $1,500,000           $1,500,000

As part of the agreement, EMX will receive cash and share payments from Gold Line as set out in the attached table, as well as the purchase right of 1 per cent of Agnico's 2-per-cent NSR royalty.

                                             
                                                               Gold Line shares       
Date                                      Cash payments           issued to EMX        Total payable
                                                   (U.S.)                  (U.S.)               (U.S.)
                                                                 
Upon signing of the agreement                         -                $375,000             $375,000
On the first anniversary of the
agreement                                      $250,000                $250,000             $500,000
On the second anniversary of the
agreement                                      $312,500                $312,500             $625,000

In connection with the entering into of the agreement and upon completion of the transaction, the company intends to pay a fee of $200,000 (U.S.) to be split evenly between two arm's-length third parties, which assisted in facilitating the transaction, and to be satisfied through the issuance of common shares of Gold Line. All common shares issued in connection with the transaction will be based on the volume-weighted average price for the 20 trading days prior to the date of issuance.

Completion of the transaction is subject to customary closing conditions, including the approval by the TSX Venture Exchange.

The scientific and technical information in this news release has been reviewed and approved by Michael Dufresne, MSc, PGeol, PGeo, principal and president of Apex Geoscience Ltd., a qualified person as defined by National Instrument 43-101.

About Gold Line Resources Ltd.

Gold Line is focused on advancing gold projects with significant exploration potential in prolific gold-producing regions of Sweden and Finland. Gold Line is working in one of the world's top mining jurisdictions and emerging exploration frontiers due to its strong mineral endowment, stable tenure, straightforward permitting, favourable tax regime and supportive geopolitical landscape.

Gold Line currently holds a prospective portfolio of five gold exploration projects in Sweden: one project is in the Skelleftea belt of north-central Sweden, and four projects, including the Langtjarn property, are located within the Gold Line mineral belt of north-central Sweden. The projects are located on a 200-kilometre Proterozoic greenstone sedimentary belt that is host to multiple gold showings and deposits.

About EMX Royalty Corp.

EMX is a precious- and base-metals royalty company. EMX's investors are provided with discovery, development and commodity price optionality, while limiting exposure to risks inherent to operating companies. The company's common shares are listed on the NYSE American Exchange and the TSX Venture Exchange under the symbol EMX.

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