(TheNewswire)
Kelowna, British Columbia – TheNewswire - November 9, 2022 - SOUTH ATLANTIC GOLD INC. (TSXV:SAO) (“ South Atlantic” or the“ Company” ) is pleased toannounce that it has entered into an option agreement to divest its100% interest of the Big Kidd Project, British Columbia, to QuetzalCopper Limited (“Quetzal”), a British Columbia, corporation for atotal consideration of $4.8 million and a 2% net smelter royalty(“NSR”) upon completion of the required milestones.
Option Terms
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A cash payment totaling $150,000 to South Atlantic, subject to aQualifying Financing by Quetzal ($10,000 due immediately, with thebalance due within a period of up to 60 days, commencing November4 th );
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$200,000 per year on or before the 1 st , 2 nd , 3 rd and 4 th anniversary of the optionsigning date (November 4 th , 2022);
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At the 5-year anniversary of the signing, Quetzal will make a cashpayment of $350,000 or if Quetzal is publicly listed on a recognizedstock exchange in North America it may elect to issue common shareswith a market value of $350.000 to South Atlantic;
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Further Milestone payments
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oo Following the completion of 40,000 meters ofdrilling at Big Kidd, Quetzal will make a payment of $300,000 in cashor shares, at its election (if listed on a recognized stock exchangein North America);
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oo Following the filing of a Pre-FeasibilityStudy on Big Kidd, Quetzal will make a cash payment of $1,200,000 incash or shares, at its election (if listed on a recognized stockexchange in North America);
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oo Following the filing of a Feasibility Study onBig Kidd, Quetzal will make a payment of $2,000,000 (if listed on arecognized stock exchange in North America);
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Net Smelter Royalty
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oo South Atlantic Gold will retain a net smelterroyalty of 2% over asset, of which 1% may be bought back by Quetzalfor $2 million. In the event that there is a third party offer forsuch 1% royalty, Quetzal will retain a right of first refusal topurchase the royalty on terms no less favorable than the third partyoffer to South Atlantic. The remaining 1% royalty will be at SouthAtlantic’s discretion.
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Douglas Meirelles, President and CEO stated,“ We are pleased to haveentered into this option agreement, unlocking significant shareholdervalue from our Big Kidd property. With a total consideration in excessof our current market cap, the transaction underscores the valuewithin South Atlantic. We believe that Big Kidd is an excitingcopper-gold prospect and are pleased to have retained upside exposurevia a 2% royalty. We look forward to Quetzal in advancing the projectover the coming years, while we utilize the option proceeds to focuson advancing our flagship asset, Pedra Branca in Brazil.”
About South Atlantic Gold
South Atlantic Gold is an exploration company engagedin acquiring and advancing mineral properties located in the Americas.Our flagship asset is the 100%-owned Pedra Branca project, located 280km southwest of Fortaleza, Ceará State, Brazil. South Atlantic Goldis focused on creating value for its shareholders by engaging in thedevelopment and acquisition of high-quality mineral assets located in stable and mining-friendly jurisdictions. SouthAtlantic Gold is based in Kelowna, British Columbia, and is listed onthe TSX-V under the symbol “SAO”.
ON BEHALF OF THE BOARD
Douglas Meirelles, President and CEO
For more information regarding thisnews release, please contact:
Anne Hite, Vice President, Investor Relations
T: 250-762-5777
Email: ir@southatlanticgold.com
Cautionary NoteRegarding Forward-Looking Information
This news release containsstatements that constitute "forward-lookingInformation", as suchterm is used in applicable Canadian securities laws . Such forward-looking informationinvolves known and unknown risks, uncertainties and other factors thatmay cause the Company’s actual results, performance or achievements,or developments in the industry to differ materially from theanticipated results, performance or achievements expressed or impliedby such forward-looking information. Forward-looking informationincludes statements that are not historical facts and are generally,but not always, identified by the words "expects,""plans," "anticipates," "believes,""intends," "estimates," "projects,""potential" and similar expressions, or that events orconditions "will," "would," "may,""could" or "should" occur.
Although the Company believes theforward-looking information contained in this news release isreasonable based on information available on the date hereof, by itsnature forward-looking information involves assumptions and known andunknown risks, uncertainties and other factors which may cause ouractual results, level of activity, performance or achievements, orother future events, to be materially different from any futureresults, performance or achievements expressed or implied by suchforward-looking information. There can be no assurance that the Fundamental Acquisition will becompleted as proposed or at all.
Examples of such assumptions, risksand uncertainties include, without limitation, assumptions, risks anduncertainties associated with general economic conditions; theCovid-19 pandemic; adverse industry events; the receipt of requiredregulatory approvals and the timing of such approvals; that theCompany maintains good relationships with the communities in which itoperates or proposes to operate, future legislative and regulatorydevelopments in the mining sector; the Company’s ability to accesssufficient capital from internal and external sources, and/orinability to access sufficient capital on favorable terms; miningindustry and markets in Canada and generally; the ability of theCompany to implement its business strategies; competition; the risk that any of theassumptions prove not to be valid or reliable, which could result indelays, or cessation in planned work, risks associated with theinterpretation of data, the geology, grade and continuity of mineraldeposits, the possibility that results will not be consistent with theCompany’s expectations, as well as other assumptions risks anduncertainties applicable to mineral exploration and developmentactivities and to the Company, including as set forth in theCompany’s public disclosure documents filed on the SEDAR website at www.sedar.com .
THEFORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTSTHE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS NEWS RELEASEAND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULDNOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULDNOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANYMAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANYPARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLELAWS.
Neither the TSX Venture Exchange norits Regulation Services Provider (as that term is defined in thepolicies of the TSX Venture Exchange) accepts responsibility for theadequacy or accuracy of this release .
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