Buchans Resources Limited (the “Company” or “Buchans”), announces that it has completed a private placement financing of $500,000 through the issue of 2,500,000 flow-through shares of the Company at a price of $0.20 per flow through share.
John F. Kearney, Chairman and Chief Executive of Buchans purchased the 2,500,000 flow-through shares for gross proceeds of $500,000 in the private placement.
This private placement by an Insider, who is a ‘Related Party’ within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions of the Canadian Securities Administrators (the “Instrument”) constitutes a ‘related party transaction’ under the Instrument. The transaction was approved by the Board of Directors of the Company at a meeting which John Kearney did not attend and at which only independent directors voted on the resolution. The transaction is exempt from the formal valuation and minority shareholder approval requirements of the Instrument by virtue of s. 5.5(c) – distribution of securities for cash; and 5.7(b) – fair market value of not more than $2,500,000, respectively.
John Kearney previously held 2,546,969 common shares (4.1%) of the issued shares of Buchans and following completion of the placement, he will now hold 5,046,969 common shares (7.8%) of the issued shares of Buchans.
All shares issued in connection with the private placement will be subject to a four month hold period from the date of issuance of such shares.
The proceeds of the Placement will be used to incur eligible Canadian Exploration Expenses, (CEE) as defined under the Income Tax Act (Canada), that will be renounced in favour of the purchaser with an effective date of no later than December 31, 2021.
The funds are intended to be used to explore the Company’s mineral properties in Canada during 2022, including to undertake further exploration within the Buchans Project in central Newfoundland and to advance its Lundberg deposit as a potential open pit mining and milling operation.
Among exploration activities being considered for 2022 is diamond drilling to explore for additional high-grade resources adjacent to the Lundberg deposit that may complement Lundberg’s development as an enlarged open pit or combined open pit-underground mining project and are primarily focused on a specific target area located immediately northwest of the Lundberg deposit, known as the Two Level. Buchans believes the Two Level area holds considerable potential to host additional mineralization that could further enhance Lundberg’s development potential.
The Two Level target area was last drilled by the Company in 2018 and returned drilled intercepts of 1.8 m of high-grade mineralization assaying 9.48% combined base metals (Zn+Pb+Cu) as 5.57% Zn, 3.15% Pb, 0.76% Cu, 90.5 g/t Ag & 0.37 g/t Au, including 1.0 m assaying 14.83% combined base metals as 8.70% Zn, 4.87% Pb, 1.26% Cu, 133.2 g/t Ag & 0.47 g/t Au ( see Buchans News Release dated November 19, 2018).
Paul Moore, M.Sc., P.Geo., (NL), Buchans Resources’ Vice President of Exploration, is acting as Qualified Person in compliance with National Instrument 43-101 with respect to this release and has reviewed the technical contents for accuracy.