Stellar AfricaGold Opawica Sale Closed in Escrow
(TheNewswire)
Vancouver / TheNewswire / September 6, 2018 – John Cumming, President and Chief Executive Officer of Stellar AfricaGold Inc., (TSX-V: SPX) ("Stellar" or the "Company") announces:
Further to the Company’s June 28 and August 9, 2018 news releases, Stellar and Mosaic Minerals Inc. (“Mosaic”) have closed the sale of the Opawica Gold Project in escrow. Final closing and release from escrow will follow shareholder approval at Stellar’s October 31, 2018Annual General Meeting scheduled.
As previously stated, Stellar’s decision to focus exclusively in Guinea and in particular on its gold exploration and development at Balandougou dictated that Stellar divest of all non-core assets. To best monetize its remaining non-core asset Stellar agreed to sell Opawica to Mosaic for $360,000 to be paid by the issuance of 7,200,000 shares of Mosaic issued at a deemed price of $0.05 per share, plus a 2% Net Smelter Return royalty (“NSR”) one-half of which may be purchased by Mosaic for $1,000,000. The $0.05 share price was based upon the issue price of the Concurrent Mosaic Financing (as defined below).
The 7,200,000 Mosaic shares purchase consideration represents a 100% recovery of Stellar’s $360,000 of historical exploration expenditures, while the 2% NSR provides a potential long-term upside benefit for Stellar shareholders if a discovery is made.
The Opawica Transaction is being closed in two stages. Mosaic has confirmed that it has completed concurrent equity financing of over $200,000 at pricing equivalent to the purchase consideration shares ($0.05 per share) and the first stage closing into escrow is complete. The final closing is conditional upon shareholder approval at the October 31, 2018 Stellar Annual General Meeting and providing final documents to the TSX-V.
Mosaic is a privately held company currently 100% owned by Maurice Giroux and John Cumming, both directors of Stellar. After completion of the Opawica Transaction and the Mosaic Concurrent Financing, Maurice Giroux and John Cumming will be minority shareholders of Mosaic.
The Opawica Transaction constitutes a related-party transaction within the meaning of TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101 as two directors of the Company currently control Mosaic. The Company relied upon exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and (b) and 5.7(1)(a) of MI 61-101, as the Company is not listed on a specified market and the fair market value of the Opawica Transaction does not exceed 25 per cent of the market capitalization of the Company, as determined in accordance with MI 61-101.
Stellar AfricaGold Inc. is a Canadian gold exploration company with offices in Vancouver, BC and Montreal, QC, and operations concentrated in West Africa and in Quebec.
In addition to developing its Balandougou Gold Project in Guinea including construction of 150 tonnes per day gravity mill (construction completed) to process a 15,000 tonnes bulk sample (processing in progress) to test the commercial economics of gold extraction using only gravity methods, the Company also currently owns 100% of the Opawica project in the Chibougamau mining camp, Quebec.
For further information please contact:
John Cumming, President & CEO, Stellar AfricaGold Inc., or Maurice Giroux, VP Exploration, Stellar AfricaGold Inc.,
4908 Pine Crescent, Vancouver, BC, V6M 3P6, 1035 West Laurier Street, Suite 201, Montréal, QC H2V 2L1.
Email: stellarafricagoldinformation@gmail.com Email: mgiroux.stellar@gmail.com
Additional information is available on the Company’s website at www.stellarafricagold.com.
On Behalf of the Board
John Cumming, LLM
President & CEO
This release contains certain "forward-looking information" under applicable Canadian securities laws. Forward-looking information reflects the Company’s current internal expectations or beliefs and is based on information currently available to the Company. In some cases forward-looking information can be identified by terminology such as "may", "will", "should", "expect", "intend", "plan", "anticipate", "believe", "estimate", "projects", "potential", "scheduled", "forecast", "budget" or the negative of those terms or other comparable terminology. Forward looking information contained in this news release includes, without limitation, statements relating to the completion of the Opawica Transaction and the exploration and development potential of the Balandougou II permit. Forward looking information are based on assumptions made by the Company. Many of these assumptions are based on factors and events that are not within the control of the Company, and there is no assurance they will prove to be correct or accurate. Risk factors that could cause actual results to differ materially from those predicted herein include, without limitation: the failure of Stellar to obtain TSX-V approval of the Opawica Transaction, the failure of Mosaic to complete the Mosaic Concurrent Financing, that the business prospects and opportunities of the Company will not proceed as anticipated; changes in the global prices for gold or certain other commodities (such as diesel, aluminum and electricity); changes in U.S. dollar and other currency exchange rates, interest rates or gold lease rates; risks arising from holding derivative instruments; the level of liquidity and capital resources; access to capital markets, financing and interest rates; mining tax regimes; ability to successfully integrate acquired assets; legislative, political or economic developments in the jurisdictions in which the Company carries on business; operating or technical difficulties in connection with mining or development activities; laws and regulations governing the protection of the environment; employee relations; availability and increasing costs associated with mining inputs and labour; the speculative nature of exploration and development; contests over title to properties, particularly title to undeveloped properties; and the risks involved in the exploration, development and mining business. Risks and unknowns inherent in all projects include the inaccuracy of estimated reserves and resources, metallurgical recoveries, capital and operating costs of such projects, and the future prices for the relevant minerals.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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