St. Augustine Announces Board and Majority Shareholder Approval for
Joint Venture Restructuring and Files Q3 2013 Results
SPOKANE, WASHINGTON--(Marketwired - Dec 3, 2013) - St. Augustine
Gold and Copper Limited (TSX:SAU) ("St. Augustine" or the
"Company") announced today that it has received approval by its
board and majority shareholders for the joint venture restructuring
("the Restructuring") that the Company had previously announced on
October 15, 2013. Its partner, Nationwide Development Corp.
("Nadecor") has also received approval from its board and
shareholders to proceed with the transaction. The Restructuring is
subject to approval from the Toronto Stock Exchange ("TSX"). The
Restructuring will transfer the amount allowable under Philippine
mining law of Nadecor's King-king Gold-Copper Project (the
"Project") interest to a 39.96% equity interest in St. Augustine
upon a successful transaction close (details of the restructuring
are described below). The Company is relying upon written consents
from shareholders holding more than 50% of the issued and
outstanding shares of the Company, as contemplated in subsection
604(d) of the TSX company manual. As a result of this written
majority shareholder approval, shareholders will not be required to
vote on this matter at the upcoming Annual Meeting of Shareholders,
to be held on December 16, 2013 in Spokane, Washington.
"Simplifying the
structure of the joint venture is beneficial for a number of
reasons," said Andrew J. Russell, CEO of St. Augustine. "Firstly,
it fully aligns the interests of Nadecor, St Augustine and their
respective shareholders in the Project. Secondly, we believe the
new structure increases the attractiveness of the Project to
potential strategic partners supportive of bringing King-king into
production as soon as possible."
Terms of
Restructuring:
The Restructuring
involves the arms-length joint venture partners combining their
interests in the King-king Project into one entity, that being the
Company. The Restructuring would result in Nadecor shareholders,
other than St. Augustine, being issued 324,568,751 shares of St.
Augustine representing 66.54% of the current issued and outstanding
shares, and 39.96% of the issued and outstanding shares post
transaction, assuming no further shares are issued. Once approved,
the Restructuring would result in St. Augustine holding a 100%
interest in the joint venture milling company ("Milling Co") as
well as assuming full responsibility for organizing Project
financing. The structure of the joint venture mining company
("Mining Co") will see Nadecor owning 60% and St. Augustine owning
40% of Mining Co, in accordance with the nationality requirements
under Philippine law. The relationship between Mining Co and
Milling Co will see Mining Co selling ore to Milling Co pursuant to
an ore sales agreement, as defined under Philippine mining law.
Milling Co would process the ore and subsequently sell copper
concentrate, gold concentrate, cathode copper and gold bullion. St.
Augustine will continue to hold 25% of the issued and outstanding
shares of Nadecor.
The parties will
apply the following process to reach their Restructuring goal.
First, St. Augustine will acquire from Nadecor all issued and
outstanding shares of the Milling Co for debt in the sum of
US$32,456,875 which was calculated by multiplying 324,568,751
shares (a number equal to 39.96% of St. Augustine post-transaction)
times US$0.10. Nadecor will then dividend out this debt to its
shareholders of record other than St. Augustine. St. Augustine will
then offer to those Nadecor shareholders, pro rata on a private
placement basis, for subscription at their option, 324,568,751
shares of the Company at an issue price of US$0.10, which
represents a 50% discount to market at the time the agreement was
signed, and which can be satisfied by the return of the dividended
debt. In the event 100% of those Nadecor shareholders subscribe,
those shareholders of Nadecor will own approximately 40% in
aggregate of St. Augustine, provided no additional shares of the
Company are issued prior to the closing of the Restructuring
transaction.
In accordance with
TSX policy, which mandates that shareholder consent must be
received when a company proposes a transaction in which it will
issue more than 25% of its issued and outstanding stock or issue
shares at a price less than the allowable discount to market, St.
Augustine has received written approval for the Restructuring by
more than 50% of its shareholders.
The closing of the
Restructuring is also subject to approval by the Philippine
authorities on the transfer of the mining concession (Mineral
Production Sharing Agreement) from Nadecor to Mining Co, among
other conditions.
Post-Transaction
Shareholder Ownership
Control of St.
Augustine will not be materially affected as a result of the
Restructuring other than Russell Mining and Minerals, ULC, while
remaining the largest shareholder, will hold less than 20% of the
issued and outstanding shares. The following table represents those
shareholders that will hold 10% or more of the issued and
outstanding shares of the Company post- transaction:
Name of Shareholder |
Number of shares currently held |
|
Number of shares held post transaction |
|
% of issued and outstanding shares on a non-diluted basis post
transaction |
Russell Mining and Minerals, ULC |
144,000,000 |
|
144,000,000 |
|
17.7 |
Queensberry Mining and Development Corp. |
102,718,500 |
|
117,205,909 |
|
14.4 |
Queensberry Mining
and Development Corp. is the only current insider of St. Augustine
that will receive shares on closing. It will receive approximately
14,487,409 shares based on its current 4.46% holding in Nadecor. As
such, it was not eligible to provide written consent to this
transaction.
Q3 2013 Results
St, Augustine also
announced that it has filed its financial statements and management
discussion and analysis (MD&A) for the quarter ended September
30, 2013 on www.sedar.com.
The King-King
Copper-Gold Project
The King-king
Copper-Gold Project is located in Compostela Valley in the
Philippines, and is expected to recover 3.16B lbs. of copper and
5.43M oz. of gold over its 22 year mine life. According to the
Preliminary Feasibility Study ("PFS") that was press released on
September 18, 2013 and then filed on www.sedar.com on November 1,
2013, the Project has a pre-tax NPV of $2.0 billion with an IRR of
24.8%. The mineral reserve amounts to 617.9 million tonnes at
0.300% total copper and 0.395 g/t gold.
The table below
presents the mineral reserve for the King-king Project based on the
mine and plant production schedules developed for the PFS.
|
|
Tot Cu |
Sol Cu |
Gold |
NSR |
Reserve Classification |
Ktonnes |
(%) |
(%) |
(g/t) |
(US$) |
Proven Mineral Reserve |
|
|
|
|
|
|
Heap Leach Ore |
17,791 |
0.340 |
0.197 |
0.132 |
16.53 |
|
Oxide Mill Ore |
21,674 |
0.514 |
0.328 |
0.849 |
45.36 |
|
Sulfide Mill Ore |
52,942 |
0.305 |
0.044 |
0.543 |
24.92 |
|
Low Grade Mill Ore |
6,734 |
0.184 |
0.027 |
0.218 |
10.80 |
|
Total Proven Reserve |
99,141 |
0.349 |
0.132 |
0.514 |
26.92 |
Probable Mineral Reserve |
|
|
|
|
|
|
Heap Leach Ore |
77,373 |
0.305 |
0.172 |
0.145 |
14.81 |
|
Oxide Mill Ore |
45,440 |
0.393 |
0.259 |
0.745 |
35.30 |
|
Sulfide Mill Ore |
345,715 |
0.288 |
0.037 |
0.398 |
20.48 |
|
Low Grade Mill Ore |
50,247 |
0.191 |
0.023 |
0.211 |
10.93 |
|
Total Probable Reserve |
518,775 |
0.290 |
0.075 |
0.373 |
20.01 |
Proven/Probable Mineral Reserve |
|
|
|
|
|
|
Heap Leach Ore |
95,164 |
0.311 |
0.177 |
0.143 |
15.13 |
|
Oxide Mill Ore |
67,114 |
0.432 |
0.281 |
0.779 |
38.55 |
|
Sulfide Mill Ore |
398,657 |
0.290 |
0.038 |
0.417 |
21.07 |
|
Low Grade Mill Ore |
56,981 |
0.190 |
0.023 |
0.212 |
10.91 |
|
Total Prov/Prob Reserve |
617,916 |
0.300 |
0.084 |
0.395 |
21.12 |
NATIONAL INSTRUMENT
43-101 COMPLIANCE
Mr. James J. Moore,
P.E., Vice President Technical of St Augustine and a qualified
person under National Instrument 43-101 ("NI 43-101") have reviewed
and approved the scientific, technical and economic information
contained in this news release.
CAUTIONARY NOTE
REGARDING FORWARD-LOOKING STATEMENTS
This
announcement includes certain "forward-looking statements" within
the meaning of Canadian securities legislation. All statements,
other than statements of historical fact included herein are
forward-looking statements. Forward-looking statements involve
various risks and uncertainties and are based on certain factors
and assumptions. There can be no assurance that such statements
will prove to be accurate, and actual results and future events
could differ materially from those anticipated in such statements.
Important factors that could cause actual results to differ
materially from the Company's expectations include uncertainties
related to fluctuations in gold, copper and other commodity prices
and currency exchange rates; uncertainties relating to
interpretation of drill results and the geology, continuity and
grade of mineral deposits; uncertainties relating to the completion
of a bankable feasibility study; uncertainty of estimates of
capital and operating costs, recovery rates production estimates
and estimated economic return; the need for cooperation of the
Company's joint venture partner and government agencies in the
development of the Company's mineral projects; the need to obtain
additional financing to develop the Company's mineral projects; the
possibility of delay in development programs or in construction
projects and uncertainty of meeting anticipated program milestones
for the Company's mineral projects; and other risks and
uncertainties disclosed under the heading "Risk Factors" in the
Annual Information Form dated March 22, 2013, and filed with
Canadian securities regulatory authorities on the SEDAR website at
www.sedar.com.
St. Augustine Gold and Copper LimitedKristi HarvieManager
Investor and Corporate
Affairs+1-509-343-3193kharvie@sagcmining.comTMX EquicomMarina
ProskurovskyAccount Manager+1-416-815-0700 ext.
288mproskurovsky@tmxequicom.com
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