DIEPPE, NB, Sept. 24, 2019 /CNW/ - Colibri Resource Corporation (TSX Venture - CBI) ("Colibri" or "The Company") is pleased to announce that it has entered into a Property Option Agreement with Tocvan Ventures Corp. (Tocvan) (CSE:TOC) on its 100% owned Pilar Gold Project located near Suaqui Grande, Sonora Mexico.
Tocvan has been granted a 60 day exclusivity period for the project during which time they will complete additional due diligence in exchange for paying Colibri $25,000 (non-refundable). Upon giving notice of satisfactory due diligence Tocvan will be granted an initial option to earn 51% of the Pilar Project over a 5 year period and subject to satisfying the terms set forth below. Upon completion of these terms Tocvan will be granted a 6 month option to purchase the remaining 49% of Pilar. Tocvan will operate the project during the Option period.
"As previously indicated, Colibri has been seeking alternative strategies to begin unlocking trapped deep value from its basket of five gold exploration projects located in Sonora State, Mexico. This agreement is one result of those efforts." stated Colibri's CEO Ron Goguen.
Trading on the Canadian Securities Exchange under the symbol TOC, Tocvan is a tightly held mineral exploration company which currently has 10.33 million shares outstanding and 16.48 million shares on a fully diluted basis.
By allowing Tocvan to option the Pilar project, Colibri will have the opportunity to participate in the project's advancement along the value chain as well as to participate in any market value appreciation that Tocvan may experience going forward.
Terms to Earn 51%
Upon completion of satisfactory due diligence and mutual endorsement of the Final Agreement, Tocvan commits to the completing the following terms to earn a 51% ownership of Pilar over 5 years (60 months):
Year 1: (Months 1 through 12)
i. Tocvan will issue 2,000,000 fully-paid common shares from its treasury to Colibri at signing of Final Agreement (60 Days)
ii. Tocvan will pay $100,000 CAD to Colibri at signing of Final Agreement (60 Days)
iii. Tocvan will perform $250,000 CAD of exploration expenditures at Pilar over the subsequent 12 month period (Months 1 though 12 of Final Agreement)
Year 2: (Months 13 through 24)
i. Tocvan will pay $50,000 CAD to Colibri on anniversary of signing Final Agreement (Month 13)
ii. Tocvan will perform $350,000 CAD of exploration expenditures at Pilar over the subsequent 12 month period (Months 13 though 24 of Final Agreement)
Year 3: (Months 25 through 36)
i. Tocvan will pay $75,000 CAD to Colibri at anniversary of Final Agreement (Month 25)
ii. Tocvan will perform $400,000 CAD of exploration expenditures at Pilar over the subsequent 12 month period (Months 25 through 36)
iii. Tocvan will issue 1,000,000 fully-paid common shares from its treasury to Colibri (at Month 36)
Year 4: (Months 37 through 48)
i. Tocvan will pay $75,000 CAD to Colibri at anniversary of Final Agreement (Month 37)
ii. Tocvan will perform $500,000 CAD of exploration expenditures at Pilar project over the subsequent 12 month period (Months 37 through 48)
iii. Tocvan will issue 1,000,000 fully-paid common shares from its treasury to Colibri (at Month 48)
Year 5: (Months 49 through 60)
i. Tocvan will pay $75,000 CAD to Colibri at anniversary of Final Agreement (Month 49)
ii. Tocvan will perform $500,000 CAD of exploration expenditures at Pilar over the subsequent 12 month period (Months 49 through 60 of final agreement)
iii. Tocvan will issue 1,000,000 fully-paid common shares from its treasury to Colibri (at Month 60)
Upon satisfactory completion of all of the aforementioned payments, expenditures and share issuances over this 5 year period Colibri will then assign 51% ownership of Pilar to Tocvan.
If at any time during the 60 month earn in period should Tocvan's capitalization exceed 40 million shares outstanding, Tocvan will issue to Colibri and amount of common shares equaling 7.5% of the cumulative number of shares outstanding in excess of 40 million shares on a rolling basis. As an illustration of this clause, if Tocvan's outstanding share capital is 40 million shares and Tocvan issues 100 additional shares to a third party, Tocvan shall at the same time issue 7.5 shares to Colibri.
Expenditure Carry Over
Should Tocvan's annual exploration expenditure exceed the prescribed minimum annual amount, the amount spent over the minimum may be applied to the following year's minimum expenditures.
Option to Purchase Balance of Project
Upon satisfactory completion of the aforementioned conditions to earn 51% of Pilar, Colibri will then grant Tocvan a six month option to purchase the remaining 49% of the Pilar project in exchange for $2,000,000 CAD and a 2% Net Smelter Royalty on the Project.
Should Tocvan elect NOT to purchase the remaining 49% of Pilar a joint venture shall be formed with Tocvan owning 51% and Colibri owning 49% on the terms set out in the Final Agreement.
Upon completion of Tocvan purchasing the balance of the project, Colibri will grant an option to sell 1% NSR back to Tocvan for a price of $1,000,000 CAD.
The initial issuance of 2 million shares at the closing of the final agreement will result in Colibri holding 16.4% of the shares outstanding in Tocvan. These shares will be held by Colibri for investment purposes and the Company may sell or buy shares from time to time. It is anticipated that the shares issued will be subject to a 4-month holding period from the date of issuance.
The Agreement will subject to TSX Venture Exchange approval.
About Colibri Resource Corp.
Colibri Resource Corp. is a Canadian based junior gold exploration and development company which is focused in Sonora State, Mexico where it has five highly prospective projects at various stages of exploration. These projects are near currently producing, past producing, and development mines.
The TSX Venture Exchange has neither approved nor disapproved the contents of this news release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
The statements made in this news release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections.
SOURCE Colibri Resource Corporation
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