en.Wedoany.com Reported - Cambria Gold Mines Inc. (TSX Venture Exchange: CAMB, OTCQX: CAMVF) announced the signing of a binding term sheet with ECC Ventures 4 Corp. (TSX Venture Exchange: ECCF.P) to spin off all its interests in the Mt. Margaret copper-gold porphyry deposit project to ECC4. The transaction is expected to constitute a "Qualifying Transaction" for ECC4, and upon completion, the Mt. Margaret project will be advanced through a new independent publicly listed company named Freedom Copper Corp.
The Mt. Margaret deposit is a calc-alkaline porphyry system located approximately 22 kilometers southwest of Randle, Washington, USA, hosting high-grade copper, gold, and molybdenum mineralization. The project is primarily situated within patented federal mining claims held jointly by Cambria and the U.S. Bureau of Land Management (BLM). Through its U.S. entity Ascot USA Inc., Cambria controls a 50% interest in selected patented claims at the center of the deposit, with BLM holding the remaining 50%. Cambria also holds a 100% interest in 184 lode claims surrounding the mining area.
The porphyry system was discovered and explored by Duval Corporation between 1971 and 1980, during which a total of 105 diamond drill holes were completed, totaling 20,729 meters (Taylor, 1980). Duval completed a historical mineral resource estimate for the project, totaling 577 million tonnes at grades of 0.36% copper, 0.24 g/t gold, 0.011% molybdenum, and 1.58 g/t silver (Taylor, 1980). This historical estimate predates the implementation of National Instrument 43-101 guidelines and does not conform to currently accepted standards for reserves and resource classification. In 2010, Cambria's predecessor, Ascot Resources Ltd., completed 10 diamond drill holes totaling 4,880 meters of infill drilling, confirming and expanding the mineralized zone.
Under the term sheet, Cambria will transfer all common shares of its wholly owned subsidiary, Ascot US, to a newly formed wholly owned British Columbia subsidiary, Cambria Subco. The transaction is expected to be completed through a statutory plan of arrangement. ECC4 common shares will be consolidated on an 8.5-to-1 basis, and the company name will be changed to Freedom Copper Corp. ECC4 will acquire all shares of Cambria Subco from Cambria in exchange for 17,849,044 common shares of ECC4 (representing approximately 62.4% of Freedom Copper's pre-distribution shares after transaction financing). Cambria will complete a capital reorganization, distributing 3,575,773 of its Freedom consideration shares (approximately 20%) to its existing shareholders as an anticipated tax-free return of capital.
The purpose of the transaction is to provide Cambria shareholders with ownership in two independent publicly listed companies, allowing capital markets to independently value the Mt. Margaret project. Cambria will continue to focus on advancing the Premier Gold Mine and Red Mountain Gold Project in northwestern British Columbia.
Completion of the transaction is subject to several conditions, including the execution of an arrangement agreement, approval by Cambria shareholders at a special meeting, approval by ECC4 shareholders, approval by the Supreme Court of British Columbia for the arrangement, acceptance by the TSX Venture Exchange, conditional approval for listing of Freedom Copper common shares, and completion of transaction financing by Cambria and ECC4. Transaction financing is proposed to be conducted through a brokered private placement with gross proceeds of up to $100 million, at a price of no less than $10.00 per subscription receipt.
Upon completion of the transaction, Freedom Copper's management team will include: Ryan Weymark as Interim Chief Executive Officer, Christopher Park as Interim Chief Financial Officer, Cleveland Rueckert as Senior Vice President, David Thomas as Chief Project Officer, Asa East as Vice President of Exploration, and Orla Abrahams as Community Relations Coordinator. Freedom Copper's board of directors will consist of eight members, including Alex Morrison (Chair), Joe Driscoll, Kim Colloton, Ivy Estabrooke, Ryan Weymark, Rob McLeod, Steve Gottesfeld, and Nathalie Sajous.
The scientific and technical information in this news release has been reviewed and approved by Blaine Smit, Vice President of Exploration for Cambria Gold Mines Inc. Mr. Smit is a non-independent "Qualified Person" as defined by NI 43-101.
