Contact Gold Reports Q2 2017 Financial and Operating Results
(Thomson Reuters ONE) -
VANCOUVER, British Columbia, Aug. 30, 2017 (GLOBE NEWSWIRE) -- Contact Gold
Corp. (the "Company" or "Contact Gold") (TSXV:C) is pleased to announce its
financial and operating results for the six months ended June 30, 2017.
The interim financial statements reflect the closing of the transaction to
create Contact Gold (the "Transactions") including the acquisition of an
extensive portfolio of target rich mineral exploration properties located on and
around the Carlin, Independence and Northern Nevada Rift gold trends in the
State of Nevada (the "Contact Gold Properties").
An active exploration program is ongoing at the Company's Pony Creek gold
property, with a 4,500-metre reverse circulation and core drill program
underway, primarily in areas of previously drilled gold mineralization which
have received limited follow up by previous operators. Desktop studies and
fieldwork, including geophysics, mapping, rock and soil sampling, and historic
data compilation are also underway.
As of June 30, 2017, the Company has $11.8 million available in cash, with no
significant balance of accounts payable or accruals due. All dollar amounts are
presented in Canadian dollars unless otherwise stated.
Receipt of initial drill results is expected in September 2017, with planned
regular updates to be delivered as programs continue through the remainder of
the year.
Company highlights through and subsequent to June 30, 2017:
* Closed a reverse take-over transaction to establish Contact Gold on June
7, 2017
* Raised $19.6 million, net of transaction and financing costs on June 7, 2017
* Closed acquisition to acquire the Contact Gold Properties on June 7, 2017
* Trading of Contact Gold's common shares began on the TSX Venture Exchange
under the symbol "C" on June 15, 2017
* Receipt of approved Notice of Intent on July 18, 2017, allowing for up to
1.32 acres of new disturbance in the form of access roads and 17 drill pads
at Pony Creek
* Launched Phase 1 of 2017 drill program at Pony Creek on July 24, 2017
Details of financial results for the three and six months ended June 30, 2017
are described in the unaudited condensed interim consolidated financial
statements and related notes thereto (the "Interim Financial Statements"), and
the corresponding Management's Discussion and Analysis, copies of which are
available on SEDAR at www.sedar.com. Further details on the Company's projects
and activities can be found on Contact Gold's website at www.contactgold.com.
Pony Creek
Phase 1 of the 2017 drilling program at Pony Creek is underway, with plans to
complete over 4,500 metres of diamond core and RC drilling through the early
Fall. Drilling will be focused on delineating and expanding existing
mineralized zones in the central, northern and eastern areas of Pony Creek, with
an emphasis on validating gold mineralization within the historic mineral
resource area (see property map showing current target areas and historic
drilling at: http://www.contactgold.com/_resources/news/nr_20170720-Map.pdf).
A 4,500 metre Phase 2 program is expected to begin mid-October, and continue
through the remainder of 2017. The combined budget for Phases 1 and 2 is
approximately $4.2 million.
Pony Creek comprises 7,285 hectares on the Carlin Trend in the southern part of
the Pinon Range in Nevada. Historic exploration efforts at Pony Creek focused
on a very small area, following-up on the initial discovery of meaningful gold
mineralization in the early 1980s; there has been only limited exploration work
undertaken by previous operators on approximately 70% of the property. Contact
Gold believes much of this underexplored area to be underlain by the same
prospective regional gold host units at which high grade gold discoveries have
recently been announced by other operators in the district on the adjacent
property to the north.
Early results of the comprehensive, property-wide field program including soil
sampling with rock chip follow up, systematic stratigraphic and structural
mapping, and ground based geophysical programs have already identified multiple
new drill targets.
The Transactions
On June 7, 2017, the following transactions closed, pursuant to a court approved
statutory plan of arrangement:
Financing
The Company closed financings to raise gross proceeds of $18,500,000, issuing
that same number of common shares. A total of $0.95 million in agent and
financial advisory fees were paid in connection with the financings.
The Reverse Take-over ("RTO")
All of the issued and outstanding shares of Carlin Opportunities Inc. ("Carlin")
were exchanged for all of the common shares of Contact Gold. The nature of the
transaction constitutes an RTO, and although now a legal subsidiary of Contact
Gold, for accounting and financial reporting purposes Carlin has been identified
as the accounting acquirer and is presented in the Interim Financial Statements
as the parent company. Accordingly, the comparative financial information
reflects only the assets, liabilities and operations of Carlin since its
November 23, 2016 incorporation.
Acquisition of Clover
Contact Gold also acquired Clover Nevada II LLC ("Clover"), the entity that
holds the Contact Gold Properties. Consideration paid, and the values thereof,
in addition to $0.59 million in transaction costs allocated to the purchase
price, has been accounted for as follows:
* $7 million in cash
* $18,550,000 in common shares
* Approximately $15 million in Preferred Shares
Selected financial data
The following selected financial data is derived from the Interim Financial
Statements, as prepared in accordance with International Financial Reporting
Standards.
The information in the tables below is presented in $000s except per share data:
Three months ended Six months ended
June 30, 2017 June 30, 2017
Attributable to shareholders:
Loss for the period $373 $837
Loss and comprehensive loss for the
period $1,942 $2,406
Basic and diluted loss per share $0.01 $0.02
As at June 30, 2017 As at December 31, 2017
Cash $11,812 $ -nil
Working capital/(deficit) $11,714 ($1,005)
Total assets $51,580 $3
Current liabilities $389 $1,005
Preferred shares $12,907 $ -nil
Shareholders' equity/(deficit) $38,285 ($274)
Consistent with IFRS accounting standards for an RTO transaction, the number of
common shares issued at outstanding at June 30, 2016 (50,234,486)(and that which
is reflected at December 31, 2016, having adjusted retrospectively for the 8-
for-1 share rollback: 2,769,486) are those of Contact Gold, the legal entity,
while the values reflected are those of Carlin, the accounting acquirer.
Losses attributable to shareholders for the three and six months ended June
30, 2017 of $0.38 million and $0.84 million, respectively, reflect primarily
non-cash expenses arising from the RTO transaction ($2.2 million "listing
expense"), net of a fair value adjustment recognized on the embedded derivatives
within the Preferred Shares (gain $1.87 million) and a foreign currency gain of
$0.33 million, as well as costs incurred for professional, legal and advisory
fees, wages and salaries and exploration and evaluation of the Company's
exploration property interests. During the six months ended June 30, 2017,
expenditures on the Pony Creek property were relatively minimal reflecting the
short period from acquisition to period end. Approximately $0.08 million in
expenditures had been incurred through period end for exploration at the Contact
Gold Properties.
Other comprehensive loss attributable to shareholders for the three and six
months ended June 30, 2017, was $1.57 million for each period, and reflects the
foreign currency impact arising on the post-acquisition carrying value of the
Contact Gold Properties.
Net cash operating outflows for the six-month periods ended June 30, 2017 of
$0.78 million reflects settlement of balances due to service providers and
vendors after closing of the Transaction.
The Company's has elected to capitalize mineral property acquisition costs and
expense exploration expenses as incurred. The acquisition of Clover was
determined to be an acquisition of assets, as Clover did not meet the definition
of a business pursuant to accounting standards. Total assets at June 30, 2017
comprise primarily the exploration and evaluation assets of $39.41 million,
including the acquisition "bump" of $35.01 million attributed to, and
subsequently allocated across, the individual Contact Gold Properties, net of
the $1.57 million foreign currency adjustment, and $11.81 million in cash. At
December 31, 2016, total assets included $0.72 million in expenditures deferred
in advance of closing the Transactions. Some of the deferred balance at year
end was subsequently included as part of the $0.59 million in cost capitalized
to the acquisition of the Contact Gold Properties, while a portion was included
within the total of $1.56 million share issue costs, offsetting the value of
share capital.
Total liabilities at June 30, 2017 and December 31, 2016, include the value of
the Preferred Shares ($12.91 million), and accounts payable ($0.19 million) and
accruals ($0.20 million). The Preferred Shares were concluded to be a form of
obligation, and have been included as a non-current liability. The terms and
conditions of the Preferred Shares are detailed in the Interim Financial
Statements. The value of the Preferred Shares reflects both a "host" component
of the instrument and certain embedded derivatives. At inception these were
determined to be $8.14 million and $6.85 million, respectively. The fair values
of each will change from period to period, including (i) an accretion to the
host, (ii) a fair value adjustment, and the (iii) the impact of foreign exchange
on the embedded derivatives ($0.10 million, $1.87 million gain, and $0.31
million gain, respectively in the period from issuance to June 30, 2017).
About Contact Gold Corp.
Contact Gold is a gold exploration company focused on leveraging its properties,
people, technology and capital to make district scale gold discoveries in
Nevada. Contact Gold's extensive land holdings are on the prolific Carlin and
Independence gold trends which host numerous gold deposits and mines. Contact
Gold's land position is comprised of 24,772 hectares (247 square kilometres) of
target rich mineral tenure which hosts numerous known gold occurrences, ranging
from early- to advanced-exploration and resource definition stage.
Additional information about the Company is available at www.contactgold.com.
For more information, please contact:
Matthew Lennox-King
President & Chief Executive Officer
E-mail: info(at)ContactGold.com
Andrew Farncomb
SVP Corporate Development
Neither the TSXV nor its Regulation Services Provider (as that term is defined
in the policies of the TSXV) accepts responsibility for the adequacy of this
release. No stock exchange, securities commission or other regulatory authority
has approved or disapproved the information contained herein.
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information" and "forward-looking
statements" (collectively, "forward-looking statements") within the meaning of
the applicable Canadian securities legislation. All statements, other than
statements of historical fact, are forward-looking statements and are based on
expectations, estimates and projections as at the date of this news release. Any
statement that involves discussions with respect to predictions, expectations,
beliefs, plans, projections, objectives, assumptions, future events or
performance (often but not always using phrases such as "expects", or "does not
expect", "is expected", "anticipates" or "does not anticipate", "plans",
"budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or
variations of such words and phrases or stating that certain actions, events or
results "may" or "could", "would", "might" or "will" be taken to occur or be
achieved) are not statements of historical fact and may be forward-looking
statements. In this news release, forward-looking statements relate, among other
things, to planned expenditures through the remainder of the year, and the
anticipated exploration activities of the Company at Pony Creek.
These forward-looking statements are based on reasonable assumptions and
estimates of management of the Company at the time such statements were made.
Actual future results may differ materially as forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company to materially
differ from any future results, performance or achievements expressed or implied
by such forward-looking statements. Such factors, among other things, include;
business integration risks; fluctuations in general macroeconomic conditions;
fluctuations in securities markets; fluctuations in spot and forward prices of
gold, silver, base metals or certain other commodities; fluctuations in currency
markets (such as the Canadian dollar to United States dollar exchange rate);
change in national and local government, legislation, taxation, controls,
regulations and political or economic developments; risks and hazards associated
with the business of mineral exploration, development and mining (including
environmental hazards, industrial accidents, unusual or unexpected formations
pressures, cave-ins and flooding); inability to obtain adequate insurance to
cover risks and hazards; the presence of laws and regulations that may impose
restrictions on mining; employee relations; relationships with and claims by
local communities and indigenous populations; availability of increasing costs
associated with mining inputs and labour; the speculative nature of mineral
exploration and development (including the risks of obtaining necessary
licenses, permits and approvals from government authorities); and title to
properties. Although the forward-looking statements contained in this news
release are based upon what management of the Company believes, or believed at
the time, to be reasonable assumptions, the Company cannot assure shareholders
that actual results will be consistent with such forward-looking statements, as
there may be other factors that cause results not to be as anticipated,
estimated or intended. Readers should not place undue reliance on the forward-
looking statements and information contained in this news release. The Company
assumes no obligation to update the forward-looking statements of beliefs,
opinions, projections, or other factors, should they change, except as required
by law.
Pony Creek and Information Regarding Historical Resources
The scientific and technical information contained in this news release has been
reviewed and approved by Vance Spalding, CPG, VP Exploration, Contact Gold, who
is a "qualified person" within the meaning of National Instrument 43-101
Standards of Disclosure for Mineral Projects ("NI 43-101").
The information contained herein is subject to all of the assumptions,
qualifications and procedures set out in a technical report entitled "Technical
Report on the Pony Creek Gold Project, Elko County, Nevada, USA" dated April
18, 2017, and effective March 15, 2017), prepared by Michael M. Gustin, C.P.G.
of Mine Developments Associates of Reno, Nevada (the "Technical Report"), which
can be viewed under Contact Gold's issuer profile on SEDAR at www.sedar.com, and
reference should be made to the full details of the Technical Report.
Pony Creek is an early stage exploration property and does not contain any
mineral resource estimates as defined by NI 43-101. There has been insufficient
exploration to define a mineral resource estimate at Pony Creek or on any of
Contact Gold's properties.
Mineral resources are not mineral reserves and do not have demonstrated economic
viability. There are no other recent estimates or data are available to the
Company as at the date of this news release and a detailed exploration program
is required to be conducted by the Company in order to verify or treat the
historical estimate as a current mineral resource. A qualified person has not
done sufficient work to classify the historical estimates as current mineral
resources or mineral reserves and the Company is not treating the historical
estimate as current mineral resources.
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Contact Gold Corp. via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 30.08.2017 - 11:58 Uhr
Sprache: Deutsch
News-ID 558295
Anzahl Zeichen: 19193
contact information:
Town:
Vancouver, British Columbia
Kategorie:
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