DG:CC - Dixie Gold Inc. Receives $120 Million Statement of Claim Over 70% Earn-In Option at Red Lake Project
(TheNewswire)
Vancouver, British Columbia – TheNewswire - July 5, 2022 – Dixie Gold Inc. (TSX V :DG) (“ DixieGold ” or the “ Corporation” ) reports that it has been named as a party in aStatement of Claim issued by Barrick Gold Inc. (“Barrick Gold”) inthe Toronto Superior Court of Justice on June 30, 2022 (Court File No:CV-22-00683409-0000)(the “Claim”).
The Claim alleges, among other things, that Dixie Goldhas breached certain obligations in Earn-In and Joint VentureAgreement to pursue more lucrative commercial arrangements concerningthe Corporation’s mining claims.
Dixie Gold intends to defend against the Claim andLenczner Slaght LLP has been retained by the Corporation as litigationcounsel.
Statement of Claim
The Claim seeks, on a joint and several basis, theaggregate sum of specified and enumerated monetary damages, amongother claims, of $120 million for a 70% exploration earn-in option(the “Earn-In Option”) in the Red Lake Project (the “Red LakeProject”), arising from the termination of the Earn-In Option by theCorporation on June 7, 2022.
Among other defendants to the Claim, Barrick Gold named“ABC Corporation Inc.”, as placeholder for party that Barrick Goldalleges may have attempted, or may attempt hereafter, to deal in thesubject project following the termination.
Information for Shareholders
Without limitation, Dixie Gold advises shareholders asto the following particulars:
During the fall of 2021, Dixie Gold elected to engagewith Barrick Gold for purposes of examining an exploration-focusedearn-in agreement whereby Barrick Gold might earn an interest in aportion of the Red Lake Project (the “Barrick Engagement”).
The Barrick Engagement culminated in the formalizationof an exploration-focused earn-in option agreement which could, if allterms were met, enable Barrick Gold to earn a 70% interest in the RedLake Project (the “Exploration Earn-In Option Agreement”) as datedNovember 1, 2021, and as consequently disclosed with detail by DixieGold (see news release, Dixie Gold Inc. Announces Agreement withBarrick Gold, dated November 3, 2021).
On June 3, 2022, Barrick Gold served Dixie Gold with ademand letter that instructed Dixie Gold to act to mitigate damagesexpected to be suffered by Dixie Gold by way of claim loss at the RedLake Project as a result of an assessment credit deficit. Barrickalleged a corresponding deficit of filed exploration work otherwisenecessary to generate sufficient government-approved assessmentcredits relating to exploration work by Barrick Gold so as tootherwise keep mining claims within the Red LakeProject in good-standing. Barrick Gold alleged that Dixie Gold hadan obligation to maintain the claims for Barrick Gold based on apurported good-faith demand that, according to Barrick Gold, DixieGold owed to Barrick Gold in its capacity as a party seeking toearn-in (through exploration) at Dixie Gold’s project.
On June 7, 2022, Dixie Gold delivered a terminationnotice to Barrick Gold of the Exploration Earn-In Option Agreementfor, among other factors: (a) failure by Barrick Gold to file andobtain government approval of sufficient and/or timely explorationwork, as prescribed by assessment-related regulations, and asotherwise needed to keep the claims comprising Dixie Gold’s Red LakeProject in good-standing; (b) a rejection of the demand by BarrickGold to file an extension of time application of a discretionaryapproval nature that could, in addition to the potential risk ofmining claim loss if not granted, also be reasonably expected toresult in the forfeiture of banked assessment credits held by DixieGold if granted; (c) a rejection of demands by Barrick Gold to DixieGold that Dixie Gold use and/or lend-out assessment credits that DixieGold holds at its corporate-level as a result of exploration work doneby Dixie Gold (the “Dixie Gold Exploration Work”) for the benefitof Barrick Gold, (d) a rejection of the assertion by Barrick Gold thatDixie Gold had a contractual obligation to maintain the claims forBarrick Gold, and (e) as to the demand by Barrick Gold that Dixie Goldimmediately act to mitigate damages expected to be suffered by DixieGold due to imminent claim loss at the Red Lake Project.
On June 8, 2022, Dixie Gold announced that it haddelivered the Dixie Gold Termination. In light of the Claim, DixieGold today reports that the identity of the unnamed party in its newsrelease of June 8, 2022 was Barrick Gold (see news release, Dixie GoldInc. Delivers Termination Notice to Earn-In Party Re: Red LakeProject, dated June 8, 2022).
Dixie Gold believes that its shareholders are therightful beneficiaries of assessment credits owned by Dixie Gold (the“DG Exploration Credits”), including those held by the Corporationfrom the Dixie Gold Exploration Work or otherwise, and that BarrickGold has no contractual entitlement to demand possession or use of theDG Exploration Credits.
As the registered owner of the mining claims thatconstitute the Red Lake Project, Dixie Gold intends to apply DGExploration Credits to protect the claims and satisfygovernment-imposed obligations relating to assessment creditexpenditure duties imposed on claim owners in Ontario, and as furtherapplicable to mining claims within the Red Lake Project that have anupcoming anniversary date of July 10 th .
The Corporation maintains that Barrick Gold has failedto meet contractual requirements under the Earn-In Option Agreementand that no joint-venture exists as between the parties.
All monetary amounts in this news release are expressedin Canadian dollars.
About Dixie GoldInc.
Dixie Gold Inc. (TSXV: DG) is a publicly-tradedexploration company involved in a diverse portfolio of high-impactexploration projects in Canada.
The Company has 25,737,188 common shares issued, withno warrants outstanding.
For more information, please visitwww.dixiegold.ca
On Behalf of the Board ofDirectors
Ryan Kalt
Chief Executive Officer
Dixie Gold Inc.
Forward-Looking Statements
Thisnews release contains "forward-looking information"concerning anticipated developments and events that may occur in thefuture. Forward looking information contained in this news releaseincludes, but is not limited to, statements with respect to thestatement that Dixie Gold intends to defend the allegations made inthe Claim, the outcome of the Claim and Dixie Gold’s operations.
In certain cases, forward-lookinginformation can be identified by the use of words such as"plans", "expects" or "does not expect","budget", "scheduled", "estimates","forecasts", "intends", "anticipates" or"does not anticipate", or "believes", orvariations of such words and phrases or state that certain actions,events or results "may", "could","would", "might", "occur" or "beachieved" suggesting future outcomes, or other expectations,beliefs, plans, objectives, assumptions, intentions or statementsabout future events or performance. Forward-looking informationcontained in this news release is based on certain factors andassumptions regarding, among other things, that Dixie Gold willsuccessfully defend the Claim or in alternative reach an agreementthat otherwise achieves settlement of the Claim, and while Dixie Goldconsiders these assumptions to be reasonable based on informationcurrently available to it, that may prove to be incorrect.
Forward looking information involvesknown and unknown risks, uncertainties and other factors which maycause the actual results, performance or achievements of Dixie Gold tobe materially different from any future results, performance orachievements expressed or implied by the forward-looking information.Such factors include the outcome of the Claim and the risks identifiedin the "Risk Factors" sections of Dixie Gold’s publiclyfiled reports and filings with applicable Canadian securitiesregulators.
Although Dixie Gold has attempted toidentify important factors that could cause actual actions, events orresults to differ materially from those described in forward-lookinginformation, there may be other factors that cause actions, events orresults not to be as anticipated, estimated or intended. Accordingly,readers should not place undue reliance on forward-lookinginformation. The forward-looking information is made as of the date ofthis news release. Except as required by applicable securities laws,Dixie Gold does not undertake any obligation to publicly update orrevise any forward-looking information.
Neither the TSXVenture Exchange nor its Regulation Services Provider (as that term isdefined in the policies of the TSX Venture Exchange) acceptsresponsibility for the adequacy or accuracy of thisrelease.
Ryan Kalt
Chief Executive Officer
Dixie Gold Inc.
Telephone: 604-687-2038
Email: info@dixiegold.ca
Website: www.dixiegold.ca
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