Fairchild Gold signs MOU to acquire Golden Arrow

Executive Summary

• Fairchild Gold Corp. has entered into a Memorandum of Understanding (MOU) to acquire a 100% interest in the Golden Arrow gold-silver project from Emergent Metals Corp.
• The transaction involves a total consideration of $4.1 million in cash, 12.5 million common shares, a $3.5 million senior secured note, and a 0.5% Net Smelter Return (NSR) royalty.
• The Golden Arrow project is an advanced-stage asset in Nevada with a historical NI 43-101 resource of approximately 347,000 ounces of gold and 5.2 million ounces of silver, located near the large Round Mountain mine.

Key Details

• Transaction Structure:
  • Cash: $250,000 USD paid upon signing (non-refundable); $350,000 USD payable upon TSX Venture Exchange approval.
  • Equity: 12.5 million common shares of Fairchild Gold issued to Emergent Metals upon regulatory and exchange approval.
  • Debt: Senior secured note with a face value of $3.5 million USD.
    • Interest rate: 8.5% payable semi-annually.
    • Maturity: 5 years from definitive agreement.
    • Repayment terms: Discretionary repayment allowed; principal increases to $4.0 million if redeemed between years 3-4, and $5.0 million if redeemed between years 4-5.
    • Security: Secured solely by the Golden Arrow project.
  • Royalty: 0.5% NSR royalty granted to Emergent Metals.
  • Buyback Option: Fairchild holds the option to buy back the royalty for $1.0 million USD (prior to year 4) or $1.5 million USD (between years 4-7).
• Project Assets (Golden Arrow):
  • Location: ~40 miles east of Tonopah, Nevada, ~60 miles east of Kinross Gold’s Round Mountain mine.
  • Resource Base (Historical NI 43-101):
    • Measured & Indicated: 12.17 million tons at 0.024 oz/t Au and 0.33 oz/t Ag (296,500 oz Au, 4,008,000 oz Ag).
    • Inferred: 3.79 million tons at 0.013 oz/t Au and 0.33 oz/t Ag (50,400 oz Au, 1,249,000 oz Ag).
  • Exploration Upside: Hosts multiple untested large target areas and stepout opportunities; QP notes additional work is required to upgrade resources and search for peripheral extensions.
  • Infrastructure: Benefits from previously approved U.S. Bureau of Land Management Plan of Operations and Environmental Assessment (EA), allowing up to ~240,000 feet of drilling.
• Timeline: Parties have 30 days to negotiate and execute a definitive purchase agreement.
• Exclusivity: Emergent Metals is under a standstill/exclusivity period during negotiations, secured by the non-refundable $250,000 USD payment.

Notable Quotes

• "By securing 100-per-cent ownership of the Golden Arrow project, Fairchild is taking a decisive strategic step toward building a world-class Nevada-focused portfolio. Golden Arrow combines a meaningful NI 43-101 resource, strong exploration upside and a proven district location alongside world-class mines like Round Mountain. Our strategy is to aggressively advance this project and unlock substantial value for our shareholders while contributing to Nevada's proud mining tradition." — Nikolas Perrault, CFA, Executive Chairman of Fairchild Gold