Carube firms up Latin America Resource acquisition

Feb 26, 2020

2020-02-25 10:37 ET – News Release

Mr. Stephen Hughes reports

CARUBE COPPER FINALIZES ACQUISITION OF LATIN AMERICA RESOURCE GROUP

Further to the press release dated Aug. 27, 2019, Carube Copper Corp. has entered into a definitive share purchase agreement dated Dec. 9, 2019, with Latin America Resource Group (LARG) shareholders, pursuant to which the company has agreed to acquire all of the issued and outstanding shares of LARG, as described herein. LARG is a private company incorporated under the laws of Ontario, Canada. The transaction has been approved by the TSX Venture Exchange.

LARG’s key asset is the Jasperoide copper-gold project, which is located in the highly prospective Andahuaylas-Yauri belt of Peru, host to several large producing copper-gold-molybdenum deposits and mines owned by major companies, including Las Bambas (Minmetals Group), Antapaccay (Glencore) and Constancia (Hudbay). The Jasperoide project hosts a number of copper-gold skarn and porphyry targets at various stages of exploration, with drilling by previous explorers intersecting intervals of copper-gold mineralization. Carube due diligence has also identified the potential for porphyry-style copper-gold mineralization.

Stephen Hughes, chief executive officer of Carube, commented: “As a result of a disciplined and rigorous acquisition strategy over the past 18 months, Carube has successfully completed this company-transforming transaction with LARG. With an experienced management team and a proven track record of building successful mining companies, we can now focus on creating significant value for our shareholders.” The initial exploration program the company has designed for Jasperoide aims to fast-track the project to the resource delineation drilling stage and will produce strong news flow throughout 2020. Carube is also continuing to advance and commercialize value at its high-quality pipeline of advanced-stage and drill-ready gold-copper projects in Jamaica and Canada.

Kimberly Ann Arntson, president and chief executive officer of LARG, commented: “Management and shareholders of LARG are extremely excited about the roll Carube can play in developing the Jasperoide project in Peru. We believe that Carube’s technical team can reveal the true mineral potential and that Carube’s board can organize the capital to realize that possibility.”

About the Jasperoide project

The Jasperoide project is located in the highly prospective Andahuaylas-Yauri belt of Peru, an emerging porphyry copper province that is host to several producing mining projects. The Jasperoide project is located approximately: 50 kilometres east of Minmetal’s Las Bambas mine (1.2 billion tonnes at 0.61 per cent Cu and 197 parts per million molybdenum) and First Quantum Minerals’ undeveloped Haquira deposit (569 million tonnes at 0.56 per cent Cu); 40 kilometres northwest of Hudbay’s Constancia mine (534 million tonnes at 0.31 per cent Cu, 0.059 gram per tonne gold and 97 parts per million molybdenum); and 100 kilometres northwest of Glencore’s Antapaccay mine (592 million tonnse at 0.45 per cent Cu and 0.09 gram per tonne gold). The company cautions that mineralization hosted on adjacent and/or nearby properties is not necessarily indicative of mineralization hosted on the company’s properties. Historic exploration activities at the Jasperoide project focused on an outcropping and mineralized copper-gold skarn that shows similar features to Las Bambas and other skarn/porphyry copper-gold deposits, such as Ertsberg/Grasberg (Indonesia), in respect of geologic setting and mineralization styles.

Jasperoide project — claim ownership

LARG has an option to earn a majority interest in five exploration claims and is in the process of transferring a 100-per-cent interest in eight exploration claims to its wholly owned Peruvian subsidiary. The Jasperoide project covers a total of 5,696 hectares. For the optioned claims, LARG must spend $5-million (U.S.) on exploration ($1.7-million (U.S.) spent to date) and pay $2-million (U.S.) ($60,000 (U.S.) paid to date) over the next four years to earn 51 per cent in three concessions and 100 per cent in two concessions. It is expected that LARG can earn up to 100 per cent of the three concessions by diluting the underlying vendor to a 1.5-per-cent royalty.

Management cautions that past results or discoveries on adjacent properties may not necessarily be indicative to the presence of mineralization on the Jasperoide project. This press release has been reviewed and approved by Shannon Baird, PGeo, Carube Copper’s exploration manager, in his capacity as a qualified person, as defined in National Instrument 43-101 — Standards of Disclosure for Mineral Projects.

Highlights of the transaction:

All-share transaction, with LARG shareholders to receive 3.1 Carube shares for each LARG share held on Aug. 26, 2019, and hold approximately 28 per cent of the issued shares in Carube;
Consolidated company to hold a portfolio of quality copper-gold assets ranging from early-stage exploration through to delineation drilling;
Carube well financed to advance its aggressive and systematic exploration and drilling program planned for the Jasperoide project;
Geographic diversification, combined portfolio within the Americas, including Peru, Jamaica and Canada;
LARG has the right to nominate one director to the Carube board.

Summary of the transaction

Each LARG shareholder will receive 3.1 common shares of Carube for every common share of LARG held. Upon closing of the transaction, Carube will: (i) issue an aggregate of 104,025,001 Carube shares to the former shareholders of LARG; and (ii) exchange all outstanding LARG stock options for options to purchase Carube shares on the basis of the exchange ratio, resulting in an aggregate of 14.07 million replacement options with an exercise price of five cents per Carube share being granted to the former optionholders of LARG. The replacement options will expire on Dec. 7, 2024. A finder’s fee of 1.4 million shares has been issued in association with this transaction. The Carube shares issued to the LARG shareholders and the finder’s fee shares will be subject to a hold period of four months and one day from the closing of the transaction. LARG will nominate Ms. Arntson as its representative to the board of Carube. Ms. Arntson is a corporate development and finance specialist with over 20 years of marketing experience in branding, investor relations and finance. She has served as chief financial officer, vice-president and board member of multiple Toronto Stock Exchange-listed junior mining companies. In the past eight years, while at Prodigy Gold, Ms. Arntson was responsible for: all aspects of the company’s corporate communication program; facilitating equity financings; generating analyst coverage; and participating in key aspects of corporate M&A (mergers and acquisitions), leading to the $340-million buyout by Argonaut Gold.

Effective on the closing of the transaction, there will be 331,531,930 Carube shares issued and outstanding.

About Carube Copper Corp.

Carube Copper is focused on creating substantive long-term value for its shareholders through the discovery and development of world-class copper and gold deposits. Carube currently holds: a 100-per-cent interest in five licences covering 207 square kilometres of highly prospective copper-gold terrain in Jamaica; a 100-per-cent interest in two porphyry copper-gold properties covering 337 square kilometres within the Cascade Magmatic Arc in southwestern British Columbia; and a 100-per-cent interest in the 46-square-kilometre Stewart Brook gold project in the Meguma gold belt of Nova Scotia. Carube is actively searching for additional high-potential copper and gold properties to add to its portfolio.

We seek Safe Harbor.

http://www.carubecopper.com/