Barrian arranges $10-million private placement
2020-05-04 09:16 ET – News Release
Mr. Maximilian Sali reports
BARRIAN MINING CORP. ANNOUNCES UP TO $10 MILLION NON-BROKERED PRIVATE PLACEMENT AND AMENDED TERMS FOR THE KINSLEY MOUNTAIN GOLD PROJECT — NEVADA
Barrian Mining Corp. has provided an update on its current purchase option transaction with Liberty Gold Corp. with respect to the Kinsley Mountain Carlin-style gold project, located south of Nevada Gold Mines LLC’s Long Canyon gold mine. Barrian intends to complete a non-brokered private placement (the “Private Placement”) for aggregate gross proceeds of a minimum of $7,500,000 and a maximum of $10,000,000. The Private Placement will consist of units at a price of $0.22 per unit. In connection with the Private Placement, Barrian has amended the previously announced purchase option agreement (see news release dated December 2, 2019) and reduced the initial payment to Liberty Gold.
At the completion of the Private Placement, Barrian plans to undertake exploration on its projects to:
- Expand and advance the Kinsley Mineral Resource by focusing on high-grade drill targets along the Secret Canyon Shale and Dunderberg Shale areas; and
- Advance the Bolo Gold-Silver Project through step-out drilling to develop a potential mineral resource estimate.
Kinsley Mountain Gold Project
The updated Kinsley Mountain resource estimate, having an effective date of January 15, 2020, completed by Mike Gustin, Ph.D., CPG, and prepared in accordance with Canadian National Instrument 43-101 – Standards for Disclosure for Mineral Projects, comprises 4.948 million tonnes containing 418,000 indicated ounces of gold at a grade of 2.63 grams Au/t and 2.438 million tonnes containing 117,000 inferred ounces at a grade of 1.51 grams Au/t1.
At Kinsley, two sedimentary units, the Dunderburg Shale and Secret Canyon Shale, host gold mineralization. The primary target for high grade gold mineralization is the Secret Canyon Shale, as exemplified by the West Flank Zone, which contains a subset of the indicated resource of 1.249 million tonnes containing 265,000 ounces gold at an average grade of 6.61 grams Au/t.
Secret Canyon Shale Target
Historical drill results from the West Flank Zone hosted by in the Secret Canyon Shale include:
Exploration in the Secret Canyon Shale by Liberty Gold focused on the West Flank Zone which remains open for extension to the east and west. The Secret Canyon Shale underlies the entire property at depth, with very few tests of the target and excellent potential for new discoveries in the same host rock horizon. For example, hole PK153, drilled 2 km to the south of the Western Flank Zone, yielded the following intercept:
Secret Canyon Target – Growth and Advancement Opportunities:
- High Grade mineralization occurs in structural corridors where they intercept the Secret Canyon Shale. The Secret Canyon Shale underlies the entire property at depth, with very few tests outside of the Western Flank Zone.
- Initial metallurgical test results which yielded gold recoveries ranging from 89 – 95% and concentrate grades between 98.6 and 312 grams Au/t demonstrate the amenability of high-grade mineralization from the Secret Canyon shale to produce a high-grade concentrate.
Dunderberg Shale Target
The Dunderberg Shale occurs stratigraphically above the Secret Canyon Shale. Historical production at Kinsley Mountain was sourced in the Dunderberg Shale, with 138,000 ounces averaging 1.4 g/t Au produced from a run of mine oxide heap leach operation during a period of historically low gold prices. Near surface oxide gold targets remain in this target horizon
Liberty Gold extended oxide mineralization down dip of the historical pits, including the following intercepts:
Maximilian Sali, CEO of Barrian comments “We would like to welcome Mr. Cal Everett to our Advisory Board as a senior financial advisor to the Company. We are pleased to also welcome Liberty’s technical team in assisting Barrian with the selection of drill targets at Kinsley. Liberty will become Barrian’s largest shareholder owning 9.9% following the close of this transaction. Previous historical drill intercepts at the Secret Canyon Shale zones which we will be targeting in our 2020 drill program include 36.6m of 8.53 g/t, 29.0m of 21.3 g/t, 11.4m of 32.7 g/t and 21.6m of 17.4 g/t. Liberty Gold’s technical team will assist Barrian with choosing drill targets for this program and we hope to achieve similar results. With a rising gold price at multi year highs we believe that we can create significant shareholder value through the drill bit at Kinsley.”
Amended Option Agreement
The previously announced purchase option agreement dated November 29, 2019 (see news release dated December 2, 2019) between Liberty Gold and Barrian has been amended (the “Amended Option Agreement”).
In order to exercise the option to acquire Liberty Gold’s interest (the “Option”) in Kinsley Gold LLC (the “JVCO”), a limited liability company holding ownership and leasehold rights in and to 513 unpatented claims and 5 leased patented claims, covering 4,187 hectares, known as the “Kinsley Mountain Project”, located in southeast Elko County, Nevada, Barrian must issue common shares and make certain cash payments as follows:
- Pay USD$1,250,000 (previously 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 9.9% of common shares (post-Consolidation and post-financing) of Barrian (previously 2,000,000 common shares) (“Initial Payments”);
- Pay USD$2,500,000 in cash on or before the first anniversary of the final approval of the transaction by the Exchange; and
- Issue USD$2,500,000 of common shares of Barrian on or before the second anniversary of the final approval of transaction by the Exchange.
The Initial Payment common shares will be subject to a voluntary 12-month hold period from the date of issuance. Liberty Gold will also be granted anti-dilution rights in future equity financings of Barrian.
Upon Barrian exercising the Option, Liberty Gold shall have a 1% NSR royalty, on the percentage amount of the JVCO that is owned and controlled by Barrian, 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).
The Amended Option Agreement is subject to a number of terms and conditions, including (among other things), closing of a financing (see below), and the final approval of the Exchange. Nevada Sunrise Gold Corp. has waived its right of first refusal in respect of the transfer by Liberty Gold of its interest in Kinsley Gold LLC.
In connection with this transaction, Barrian has agreed to pay a finder’s fee of 800,000 Units (as defined below) to Request Equity Corp., subject to Exchange approval.
Prior to closing the financing and the proposed transaction with Liberty Gold, Barrian intends to complete a consolidation on the basis of two (2) pre-consolidation shares for one (1) post-consolidation share (the “Consolidation”).
It is anticipated that trading of the Company’s shares will remain halted until completion of the transaction.
Advisory Board
Barrian is pleased to announce that it has created an advisory board with respect to the proposed acquisition by the Company of Liberty Gold Corp.’s interest in the Kinsley Mountain gold project to put Barrian in a position of strength to significantly increase shareholder value with the exploration program at Kinsley Mountain. At the closing of the transaction, Barrian will appoint Mr. Cal Everett to Barrian’s advisory board as senior financial advisor.
Liberty Gold’s exploration team will also assist Barrian with drill target selection.
About Cal Everett, B.Sc.
Mr. Everett is a geologist with more than 14 years of surface and underground exploration experience with senior mining companies. He moved to the financial sector in 1990, and spent 12 years with BMO Nesbitt Burns focused on resource equities, and seven years with PI Financial Corp. in senior resource institutional sales and capital markets. From 2008 to 2015, he was President and Chief Executive Officer of Axemen Resource Capital. Mr. Everett holds a Bachelor of Science degree in Economic Geology from the University New Brunswick. Mr. Everett is currently Chief Executive Officer and President and a director of Liberty Gold Corp.
Future Board and Management Additions
Liberty Gold and Barrian will work jointly to attract senior management to Barrian and select a VP-Exploration with Carlin Style sediment hosted gold experience.
Financing Update
The previously announced engagement with Sprott Capital Partners LP has been terminated by mutual consent.
Barrian intends to complete a non-brokered private placement (the “Private Placement”) for aggregate gross proceeds of a minimum of $7,500,000 and a maximum of $10,000,000. The Private Placement will consist of units (each a “Unit”) at a price of $0.22 per Unit.
Each Unit will consist of one common share of the Company (“Shares”) and one transferable common share purchase warrant of the Company (“Warrants”). Each Warrant will entitle the holder to acquire one Share at a price of C$0.30 per Share for a period of three years following the closing of the Private Placement.
Proceeds raised from the Private Placement 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 Private Placement is subject to TSX Venture Exchange approval and all securities issued are subject to a four month hold period. Finder’s fees will be payable in connection with the Private Placement, all in accordance with the policies of the TSX Venture Exchange and applicable securities laws.
About Barrian Mining Corp.
Barrian Mining Corp. is a 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. 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.
Methodology and QA/QC
Drill composites were calculated using a cut-off of 0.20 g/t. Drill intersections are reported as drilled thicknesses. True widths of the mineralized intervals are interpreted to be between 60-90% of the reported lengths. Drill samples were assayed by ALS Global (ALS) in Reno, Nevada for gold by Fire Assay of a 30 gram (1 assay ton) charge with an AA finish, or if over 5.0 g/t were re-assayed and completed with a gravimetric finish. For these samples, the gravimetric data were utilized in calculating gold intersections. Quality assurance/quality control (QA/QC) for all drill samples consists of the insertion and continual monitoring of numerous standards and blanks into the sample stream and the collection of duplicate samples at random intervals within each batch. Selected holes are also analyzed for a 51 multi-element geochemical suite by ICP-MS. ALS is an ISO-IEC 17025:2017 and ISO 9001:2015 accredited geoanalytical laboratory and is independent of the Barrian and the QP. Barrian detected no significant QA/QC issues during review of the data. Barrian is not aware of any drilling, sampling, recovery or other factors that could materially affect the accuracy or reliability of the data referred to herein.
Qualified Person
The scientific and technical information contained in this news release as it relates to the Kinsley Mountain Gold Project has been reviewed and approved by Kristopher J. Raffle, P.Geo. (BC) Principal and Consultant of APEX Geoscience Ltd. of Edmonton, AB and a Director of Barrian and a “Qualified Person” as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects. Mr. Raffle verified the data disclosed which includes a review of the analytical and test data underlying the information and opinions contained therein.
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