Loyalist Announces the Closing of the Acquisition of the DeSantis Property
Executive Summary
- Loyalist Exploration Limited completed the acquisition of the DeSantis gold property near Timmins, Ontario.
- Consideration consisted of $100,000 cash, 8,656,207 common shares (~$0.0462 per share) valued at $400,000, and a $1,000,000 promissory note with interest‑bearing terms and optional repayment in cash or shares.
- The deal includes future contingent payments: $400,000 upon filing of an NI 43‑101 resource report exceeding 200,000 oz Au, and $1,000,000 upon achievement of commercial production on the property.
Key Details
- Property Overview
- ~850 ha located along the north side of the Destor‑Porcupine Deformation Zone (DPDZ).
- Historical production (1926‑1943): 35,784 oz Au, 3,142 oz Ag, 193 lb scheelite from 196,928 t at 0.19 oz/t Au.
-
Historic non‑NI 43‑101 resource estimates:
- 182,505 t @ 8.64 g/t Au (Albitite & Hydrothermal zones).
- 735,500 t (600,000 t @ 6.25 g/t Au; 135,500 t unspecified grade).
-
Purchase Consideration
- Cash paid: $100,000.
- Shares issued: 8,656,207 Loyalist shares at $0.0462 per share, total value $400,000 (based on 20‑day VWAP calculated two days before closing).
-
Promissory Note: $1,000,000 principal, interest 10 % per annum; payable in cash or Loyalist shares (½ at Vendor’s option, ½ at Company’s option) at the greater of CSE minimum acceptable price or a 5‑day VWAP calculated two days before payment.
-
Future Contingent Payments
- Resource Payment: Up to $400,000 (cash and/or shares) payable within 60 days after filing an NI 43‑101 technical report if the re‑evaluated resource exceeds 200,000 oz Au.
-
Commercial Production Payment: Up to $1,000,000 (cash and/or shares) payable within 60 days of a commercial production announcement on the DeSantis Property.
-
Royalty Structure
- Royalty 1: 1.5 % NSR (0.5 % + 1.0 %); portions may be repurchased for $0.25‑$0.5 M.
- Royalty 2: 2.0 % NSR on five legacy claims; up to 1 % may be repurchased for $1 M.
- Royalty 3: 1.5 % NSR covering Royalties 1 & 2 plus an additional lease; 0.5 % may be purchased for $1 M.
-
Royalty 4: 2 % NSR on a legacy claim, payable upon production; 1 % may be repurchased for $1 M.
-
Finder’s Fee
- Cash fee equal to 6 % of the cash consideration paid to the Vendor.
-
Share issuance equal to 6 % of the shares issued to the Vendor, both payable at the time of each related payment under the PSA.
-
Regulatory & Closing Conditions
- All newly issued Loyalist shares subject to a statutory hold period of four months and one day.
-
Completion pending required regulatory approvals, including CSE approval.
-
Qualified Person
- Curtis Ferron, P.Geo., principal geology consultant for Loyalist, reviewed and approved the technical content.
Notable Quotes
“Loyalist continues to ‘Buy Timmins’ with the acquisition of the DeSantis Property… We could not ask for a better ‘Park Avenue’ address along the Porcupine Destor fault, close to Timmins.” – Errol Farr, President & CEO
Materiality Assessment: Material – Positive (the acquisition adds a historically productive gold asset with significant upside and includes substantial cash/stock consideration and future earn‑out provisions.)