PROPOSED ACQUISITION OF SEGILOLA GOLD PROJECT AND PRIVATE PLACEMENT FINANCING
Thor Explorations Ltd. (THX.V) has entered into exclusive agreements for the acquisition of a 100-per-cent interest in the Segilola gold project located in Osun state, Nigeria, through the acquisition of Segilola Resources Operating Ltd. (SROL) from Tropical Mines Ltd. (TML) and Delano Gold Mining Industries Ltd. and through the acquisition of its joint venture partner Segilola Gold Ltd. (SGL) from Ratel Group Ltd., a wholly owned subsidiary of RTG Mining Inc.
The Segilola Gold Project
The Company believes that the Segilola Gold Project, which is located in Osun State of Nigeria, approximately 120km northeast of Lagos, is the most advanced gold exploration project in Nigeria. The property comprises mining license ML41 and exploration license EL19066. ML41 covers an area of (17.2km2; 1,720ha) and is wholly contained within the larger EL19066 covering an area of 135 Cadastral Units (27.0km2; 2,700ha).
The Segilola Gold Project comprises a proposed open pit gold mining project based on an indicated mineral resource defined by a comprehensive drilling program of 555,000 ounces of gold at an average grade of 3.8 grams per ton (at a cut-off grade of 1.0 g/tAu and applying a top cut of 50g/tAu). The resources estimate was carried out by Odessa Resources Pty Ltd, an independent geological and resource consultancy based in Western Australia, according to NI 43-101 guidelines.
Under the terms of a share purchase agreement among the Company, TML and Delano, the Company will acquire 100% of the shares of SROL in consideration for:
a cash payment of US$1,600,000 payable on closing; the issue of such number of common shares as is equal to 40.68% of the shares of Thor, after giving effect to the issuance of shares contemplated by the Private Placement (as defined below) but prior to the issuance of shares contemplated by the acquisition of SGL; the grant of an aggregate 1.5% net smelter return royalty to TML and Delano with a maximum royalty payable of US$4,000,000 ; and post-closing payments to the shareholders of SROL in the aggregate amount of US$245,000 within five business days of the Company making a decision to put the Segilola Gold Project into commercial production.
Under the terms of a share purchase agreement among the Company, Ratel and RTG, the Company will acquire 100% of the shares of SGL in consideration for:
a cash payment of US$1,500,000 payable on closing; the issue to Ratel of common shares of the Company having a value of US$1,500,000 using an issue price of CAD$0.115 per share; the grant of a 1.5% net smelter return royalty to Ratel with a maximum royalty payable of US$3,500,000; and a post-closing payment to Ratel of US$2,000,000 payable on the first to occur of (a) Thor completing a financing for the development of full scale mining of the Segilola Gold Project; and (b) the date that is 24 months following closing.
In connection with the acquisition of the Segilola Gold Project, the Company intends to complete a non-brokered private placement for gross proceeds of up to CAD$6,000,000 through the issuance of common shares of the Company at an issue price of CAD$0.115 per share.
Proceeds from the private placement will be used to finance the acquisition of the Segilola Gold Project and the Company’s associated transaction costs, to fund the initial work program at the Segilola Gold Project, to advance the Company’s exploration project and for working capital purposes.
The private placement is integral to the acquisition and therefore the Company will be relying on the ‘part and parcel pricing’ exemption allowed by the TSX Venture Exchange.