Leviathan Metals to sell Timor project to Au Gold

Executive Summary

• Leviathan Metals Corp. (via its subsidiary Leviathan Gold Australia) has entered into a Mineral Property Sale and Purchase Agreement (MPSA) to sell the Timor Gold Project license (EL006278) in the Victorian goldfields, Australia, to Au Gold Corp.
• The transaction consideration includes an initial cash payment of $10,000 upon signing, $65,000 upon closing, and the issuance of 5 million common shares of Au Gold to Leviathan, representing an 11.16% equity stake in Au Gold.
• The deal includes contingent consideration of $3 per ounce for any JORC or NI 43-101 compliant resources disclosed in a technical report, payable in cash within 90 days of disclosure.

Key Details

• Transaction Structure: Sale of mineral property license EL006278 (Timor Gold Project) from Leviathan Gold (Australia) Pty. Ltd. to Au Gold Corp.
• Upfront Consideration:
  • $10,000 cash on signing of the MPSA.
  • $65,000 cash on closing of the purchase and sale.
• Equity Consideration:
  • Issuance of 5,000,000 common shares of Au Gold to Leviathan.
  • This results in Leviathan owning 11.16% of the issued and outstanding shares of Au Gold.
  • Leviathan intends to hold these shares for ownership and investment purposes, with potential to buy or sell based on market conditions.
• Contingent Consideration:
  • $3 per ounce of gold for JORC- or NI 43-101-compliant resources disclosed in a technical report.
  • Payable in cash no later than 90 days following public disclosure of the technical report.
• Asset Details (Timor Gold Project):
  • Located in the central Maryborough district of central Victoria, Australia.
  • Covers 116.45 square kilometres.
  • Encompasses over 25 kilometres of high-grade historical mine workings, including the historical Leviathan mine.
  • Historical production: 181,000 tonnes for 67,511 ounces of gold at a grade of 11.4 g/t Au.
  • Historical records suggest production of "more than an ounce of gold per tonne."
• Drilling Results:
  • Limited diamond drilling at the Leviathan mine returned 11.46 metres at 5.27 g/t Au from 232.05 metres in hole 21LEV002 (reported March 9, 2022).
• Regulatory Approval: Completion is subject to approval by the TSX Venture Exchange.
• Strategic Investor Relations Agreement:
  • Leviathan entered into an agreement with 1502656 B.C. Ltd. (led by Nathan Nowak) for strategic digital media, marketing, and data analytical services.
  • Term: Until all statements of work are delivered, expected by Oct. 31, 2026.
  • Compensation: $260,000 cash during the term.
  • Renewal: Leviathan may renew for up to four successive three-month terms at $260,000 per extension.
  • The counterparty is arm's length to the company.

Notable Quotes

• "The disposal of Timor places this non-core asset in experienced, local hands via a tightly held corporate structure, thereby providing upside to Au Gold's exploration success at the property -- an area of recorded historic high-grade production. We wish Marc Blythe and his team the best of success in their programs at Timor." — Luke Norman, President and CEO of Leviathan