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Closes $4 Million Financing and Files Technical Report
This news release is not for distribution to United States newswire service or for dissemination in the United States
VANCOUVER, British Columbia, Oct. 27, 2021 (GLOBE NEWSWIRE) -- Rugby Mining Limited (“Rugby” or the “Company”) (TSX-V: RUG) reports that it has completed its previously announced acquisition of Proximo Resources Pty Ltd (“Proximo”), a private Australian company (the “Acquisition”) (see the Company’s news release dated July 26, 2021). Proximo controls silver and gold projects in Chile and Argentina, including the drill ready Salvadora silver-copper-gold project (the “Salvadora Project”).
Rugby is also pleased to announce that it has closed its previously announced and oversubscribed $4 million private placement of units (the “Private Placement”) (see the Company’s news releases dated August 24, 2021 and September 3, 2021).
Pursuant to the Acquisition, Mr. Peter Love has been appointed a director, CEO and President of Rugby and Messrs. Bryce Roxburgh and Yale Simpson have been appointed as Co-Chairmen. Mr. Paul Joyce has stepped down as a director to facilitate the appointment of Mr. Glen van Kerkvoort as a director and Chief Technical Officer. Mr. Joyce will continue in his role as Chief Operating Officer.
Bryce Roxburgh, outgoing Rugby CEO and now Co-Chairman, stated “This is an important acquisition for our shareholders. It provides the opportunity for a significant discovery in the world class El Indio mining district. It also provides investor focus while we endeavour to advance drill permitting on our Colombian copper and gold projects.”
Mr. Peter Love, Rugby’s new CEO, stated “Proximo management has lengthy experience in South America, experience that can be applied not only to Salvadora but to pursuing a drilling permit on Rugby’s Cobrasco copper project in Colombia and advancing the El Zanjon gold project in Argentina. For Proximo investors the opportunity to participate in those projects is particularly attractive.”
Salvadora Silver-Copper-Gold Project Overview
The undrilled Salvadora Project is located 2.5 hours’ drive by sealed all weather road from the Coquimbo deep water port and La Serena capital airport with 8 daily flights connecting to Santiago (Figure 1). The Salvadora Project is situated at the southern end of the El Indio gold belt, 40 km south of Barrick Gold’s El Indio gold mine that hosts +44 Moz of gold and 875 Moz of silver. The famous El Indio mine produced +5 million ounces of gold, including 2.1 Moz of gold in direct shipping ore grade at 121 g/t Au (3.89 ozt/t).
The exploration target at the Salvadora Project is a deposit(s) of high grade ore, a silver analogue of the El Indio gold mine to the north. The property hosts a 7 km long vein system with locally high silver grades in outcrops. Most of the system is covered by scree such that artisanal mining focussed only on the limited sites of in-situ vein exposure. The hydrothermal alteration halo is large, suggesting excellent ore potential (Figure 2).
Figure 1 Salvadora project location
Figure 2 Salvadora (looking east)
Mineralization on the Salvadora Project conforms to a structurally controlled intermediate sulfidation epithermal silver-copper-gold style deposit. It is hosted by steeply dipping acid to intermediate tuffs and ignimbrites. The hydrothermal alteration zone is up to 500 metres (“m”) wide. It strikes north-south. The vertical extent of mineralization exposed at Salvadora is 400 m extending from 3,800 m to 4,200 m elevation.
During 2020-2021, Proximo exploration work comprised road rehabilitation, geological mapping, geochemistry, alteration analysis and remote sensing satellite studies. 218 surface rock chip and continuous channel samples were collected from veins and mineralized exposures within the two main areas of the project (Figure 3).
Figure 3 Proximo’s channel sampling geochemistry
Salvadora Exploration Program
Exploration at Salvadora has started early as the region has had an early snow melt. Rugby is performing geophysical and geochemical programs over the intermittently exposed 7 km long vein zone. Geological mapping, scree geochemical sampling and airborne magnetic/radiometric surveys are expected to be completed by mid-December. Management of the Company expects that this work will significantly expand the Company’s knowledge of the complex vein system and refine the many drill targets. Drilling is expected to commence in early 2022.
The Acquisition and Private Placement
Pursuant to the terms of the purchase agreement between Rugby, Proximo, the shareholders of Proximo ("Proximo Shareholders") and the holders of stock options of Proximo ("Proximo Optionholders" and collectively with the Proximo Shareholders, the “Sellers”), in consideration for the acquisition of Proximo, Rugby issued to the Sellers an aggregate of 50 million common shares and to the Proximo Optionholders (who will become eligible persons to receive options under Rugby's stock option plan post-closing), stock options to acquire, until January 13, 2026, up to 3,500,000 common shares of Rugby at a price of $0.10 per share. In connection with the Private Placement, Rugby issued 33,414,312 units (the Units”) at $0.12 per Unit to raise $4,009,717. Each Unit consists of one (1) common share and one (1) half common share purchase warrant with each whole warrant (a “Warrant”), entitling the holder to purchase one (1) additional common share of the Company until eighteen (18) months from the closing date, at an exercise price of $0.20, provided that in the event that the closing price of the Company’s common shares on the TSX Venture Exchange is $0.30 or greater per common share during any 10 consecutive trading day period, the Company may, at its option, accelerate the expiry date of the Warrants, in which case the Warrants will expire on the 30th day after the date on which the Company provides notice of such accelerated expiry to warrantholders.
Three directors participated in the Private Placement for an aggregate of 3,350,000 Units. The participation by insiders in the Private Placement is considered to be a “related party transaction” as defined under Multilateral Instrument 61-101 (“MI 61-101”). The transaction is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101, as neither the fair market value of the securities being issued nor the consideration being paid exceeds 25% of Rugby’s market capitalization.
The Company paid CAD$117,336 as finder’s fees in connection with a portion of the Private Placement.
Proceeds of the Private Placement will principally be used to fund Rugby’s exploration expenditures at the Salvadora Project and general expenses.
All securities issuable pursuant to the Acquisition and the Private Placement are subject to a four month hold period expiring on February 27, 2022. In addition, the common shares issued pursuant to the Acquisition are subject to a voluntary escrow and will be released from escrow as follows: 25% six months following closing, 25% twelve months following closing, 25% eighteen months following closing and 25% twenty-four months following closing.
Rugby has filed an independent technical report on SEDAR on the Salvadora Project (the “Salvadora Report”) conducted by Dr. Gustavo Delendatti (PhD, B.Sc-Geol, MAIG) dated July 5, 2021, in accordance with NI 43-101. The Salvadora Report can be viewed on www.sedar.com
Dr. Gustavo Delendatti a “qualified person” (“QP”) within the definition of that term in National Instrument 43-101, Standards of Disclosure for Mineral Projects, has verified the technical information that forms the basis for this news release, however some of the information is historical in nature and the Company will be required to do further assessment of this data.
Barrick 2004, Barrick Gold Corporation, Annual Report, 2004; SEDAR.com
Barrick 2019, Barrick Annual Information Form for the year ended December 31, 2019; SEDAR.com Jannas, R.R., Bowers, T.S., Petersen, U., and Beane, R.E., 1999, High-sulfidation deposit types in the El Indio district, Chile, in Skinner, B.J., ed., Geology and Ore Deposits of the Central Andes: Society of Economic Geologists, Special Publication 7, p. 219–266.
Porter 2001, El Indio Belt – El Indio, Tambo, Pascua Lama; Porter GeoConsultancy Pty Ltd, 2001; portergeo.com.au
Rugby is an exploration company conducting “discovery stage” exploration on targets in Chile, Colombia, Argentina, the Philippines and Australia. The Company controls a portfolio of gold project applications in Colombia that do not require the Department of Forestry approval that stalled the Company’s Cobrasco copper project in Choco Province. These gold project applications have considerable potential for gold, silver and copper discoveries. The Company is optimistic that the Department of Mines could move to grant titles later this year as Covid restrictions ease in Colombia.
The Company benefits from the experience of its directors and management, a team that has either been directly responsible for world-class mineral discoveries or have been part of the management teams responsible for such discoveries. Two successful companies under their management were Exeter Resource Corporation and Extorre Gold Mines Limited, which discovered significant deposits in South America. These companies were purchased by Goldcorp (Newmont) and Yamana Gold respectively.
For additional information you are invited to visit the Rugby Mining Limited website at www.rugbymining.com.
Peter Love, President & CEO
Suite 810, 789 West Pender St.
Certain of the statements made and information contained herein is “forward-looking information” within the meaning of Canadian securities legislation. This includes statements concerning the Company’s acquisition of Proximo Resources Pty Ltd (“Proximo”), plans at its projects including exploration plans for the Salvadora Project in Chile, progress on obtaining approval for its exploration concession applications in Colombia, the expected timing of drilling and/or geophysics programs, budgeted costs to conduct exploration programs including drilling, high grade potential and potential for mineral discoveries at its projects and the style or occurrence of the mineralization which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. There can be no certainty that the proposed acquisition will proceed as planned or at all. The Company holds certain of its projects under option agreements, which require annual cash payments, expenditure and/ or drilling requirements in order to maintain its interest. Should the Company not be able to meet its obligations or renegotiate the agreements it will lose its rights under the option agreement. Forward-looking information is subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, the effect on prices of major mineral commodities such as copper and gold by factors beyond the control of the Company; events which cannot be accurately predicted such as political and economic instability, terrorism, environmental factors and changes in government regulations and taxes; the shortage of personnel with the requisite knowledge and skills to design and execute exploration programs; difficulties in arranging contracts for drilling and other exploration services; the Company’s dependency on equity market financings to fund its exploration programs and maintain its mineral exploration properties in good standing; political risk that a government will change, interpret or enforce mineral tenure, environmental regulations, taxes or mineral royalties in a manner that could have an adverse effect on the Company’s assets or financial condition and impair its ability to advance its mineral exploration projects or raise further funds for exploration; risks associated with title to resource properties due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the interpretation of laws regarding ownership or exploration of mineral properties in the Philippines, Argentina, Chile and Colombia and in the sometimes ambiguous conveyancing characteristic of many resource properties, currency risks associated with foreign operations, the timing of obtaining permits to conduct exploration activities, the ability to conclude agreements with local communities and other risks and uncertainties, the ongoing effects of the COVID 19 virus and including those described in each of the Company’s management discussion and analysis and those contained in its financial statements for the year ended February 28, 2021 filed with the Canadian Securities Administrators and available at www.sedar.com. In addition, forward-looking information is based on various assumptions including, without limitation, assumptions associated with exploration results and costs and the availability of materials and skilled labour. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Accordingly, readers are advised not to place undue reliance on forward-looking information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information, whether as a result of new information, future events or otherwise.
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