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Castlebar Capital Corp. (TSXV:CBAR) ("Castlebar" or the "Company") is pleased to announce that it has entered into a letter of intent dated April 25, 2024 (the "LOI") with Mosaic Minerals Corporation (CSE:MOC) ("Mosaic"). Pursuant to the LOI, Castlebar will be granted an option to acquire (the "Transaction") up to a 100% interest in the Lichen Project (the "Lichen Project" or "Property"). The Transaction is intended to be Castlebar's "Qualifying Transaction" for purposes of the TSX Venture Exchange's (the "Exchange") Capital Pool Company program.
The Lichen Project consists of 282 claims covering a total area of 15,622 hectares and is located approximately 100 km west of the Chibougamau mining camp. The property is underlain by the volcanic rocks of the Obatogamau formation intruded by stocks and plutons of intermediate composition. The volcanic belt is parallel to two known gold bearing volcanic belt, the Bachelor Lake gold area to the west and the Osisko-Windfall gold area to the south. The Nelligan Gold project and The Monster Lake Gold project are located at the eastern extremity of the volcanic belt. Numerous gold and copper showings are also found to the east and to the west of the property.
Terms of the LOI:
Pursuant to the LOI, Castlebar may acquire up to a 50% undivided interest (the "First Option") in the Lichen project from Mosaic by, among other things:
(i) make aggregate cash payments of $205,000 to Mosaic as follows:
$15,000 on the closing of Qualifying Transaction (the "Effective Date");
an additional $15,000 within six months following the Effective Date;
an additional $50,000 on or before the first anniversary of the Effective Date;
an additional $50,000 on or before the second anniversary of the Effective Date; and
an additional $75,000 on or before the third anniversary of the Effective Date; and
(ii) by issuing an aggregate of 1,350,000 shares to Mosaic as follows:
250,000 shares no later than seven days following the Effective Date;
an additional 350,000 shares on or before the first anniversary of the Effective Date;
an additional 250,000 shares on or before the second anniversary of the Effective Date; and
an additional 500,000 shares on or before the third anniversary of the Effective Date; and
(iii) by incurring at least $750,000 in qualifying expenditures on the Property as follows:
at least $150,000 in qualifying expenditures on the Property on or before the first anniversary of the Effective Date;
at least $200,000 in cumulative qualifying expenditures on the Property on or before the second anniversary of the Effective Date; and
at least $400,000 in cumulative qualifying expenditures on the Property on or before the third anniversary of the Effective Date.
Upon exercise of the First Option, Castlebar shall have forty-five (45) days to either (i) establish a joint venture with Mosaic in which each shall hold a 50% joint venture interest or (ii) exercise an additional option ("Additional Option") to acquire an additional 50% interest in the Property by making a $150,000 cash payment and issuing 1,500,000 shares to Mosaic within the forty-five (45) day period. If Castlebar exercises the Additional Option, then it will have earned 100% undivided interest in the Property free and clear of all encumbrances except for a 2% net smelter royalty to be retained by Mosaic. Castlebar may accelerate and carry forward any of the cash payments, share issuances or work expenditures.
Castlebar proposes to complete a private placement raising not less than $850,000 (the "Private Placement") to fund the phase one work program on the Lichen project and general and administrative operating expenses. Castlebar will complete a one-for-two stock split (the "Stock Split") immediately prior to closing of the Qualifying Transaction and Private Placement. The Qualifying Transaction, if completed, is an Arm's Length Qualifying Transaction. No Shareholder approval is required to complete the Qualifying Transaction. Further information in respect of the Private Placement and how the Company will meet the Exchange's Evidence of Value test will be provided in a subsequent news release.
Completion of the Transaction is subject to a number of conditions, including but not limited to, completion of due diligence by the parties, negotiation and execution of a definitive option agreement on the principal terms set forth in the LOI, Exchange acceptance, completion of the Stock Split and completion of the Private Placement. There can be no assurance that the Transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The Company has requested its common shares to be halted by the Exchange pending review of the materials for the Transaction. Trading in the common shares of the Company is expected to remain halted until the closing or termination of the Transaction. Upon completion of the Transaction, it is expected that the Company will be a Tier 2 Mining Issuer on the Exchange.
Castlebar, a capital pool company within the meaning of the policies of the Exchange, does not have any operations and has no assets other than cash. Castlebar's business is to identify and evaluate businesses and assets with a view to completing a Qualifying Transaction under the policies of the Exchange.
The Exchange has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.
