BARKSDALE ANNOUNCES OPTION TO ACQUIRE UP TO 67.5% OF PATAGONIA/SUNNYSIDE PROPERTY IN SANTA CRUZ COUNTY, ARIZONA AND CONCURRENT PRIVATE PLACEMENT FINANCING
August 15, 2017 – Vancouver, B.C. – Barksdale Capital Corp. (TSX-V: BRO.H) (“Barksdale” or the “Company”) is pleased to announce it has entered into arm’s length definitive agreements (collectively the “Definitive Agreement”) to acquire, by way of option (the “Option”) and subject to underlying royalties, up to a 67.5% undivided interest in 286 unpatented mining lode claims comprising approximately 5,223.71 acres (2,113.96 hectares) known as the Patagonia/Sunnyside property located in Santa Cruz County, Arizona (the “Sunnyside Property”) owned and/or controlled by Regal Resources USA, Inc., a Nevada subsidiary of Regal Resources Inc., a British Columbia reporting issuer (together “Regal”).
The Sunnyside Property is located approximately 80 km (~50 miles) south of Tucson, AZ and 20 km (~12 miles) northeast of Nogales, AZ. The project straddles the Harshaw (northeast), Patagonia (south) and Palmetto (northwest) mining districts and is situated in a broad northwest trending corridor of porphyry copper deposits that straddle the U.S./Mexico border from the La Caridad mine in Central Sonora, Mexico through to the Mineral Park located in northwestern Arizona.
Commenting on the Agreement, Richard Silas, President and Chief Executive Officer of Barksdale, said “Barksdale’s geological advisors believe the Sunnyside Property has the potential to host zinc mineralization similar to the adjoining Hermosa Project held by Arizona Mining Inc. Our aim is to evaluate this potential by drilling the targets we have identified in our preliminary assessment of the property.” Arizona Mining is a mineral exploration and development company focused on its 100%-owned Taylor Deposit, a carbonate replacement zinc-lead-silver deposit which is reporting a large and growing high grade resource.
The primary target consists of a large, 0.9 mile (~ 1.5 km) diameter diatreme breccia complex overlying a deep porphyry copper system in the north central part of the property along with a number of shallow (within ~ 1,000 metres of surface) porphyry Cu (and Cu-Mo) and Cu (+/- Ag) targets associated with abundant breccia pipe systems mapped throughout the property and secondary chalcocite enrichment zones as identified from limited historical drilling.
In addition, historic drill hole TCH-2 represents a potential northwesterly extension of the recently discovered Taylor base metal skarn/replacement deposit belonging to Arizona Mining located approximately 750 metres to the southeast. This core hole, drilled in the early 1970’s, intersected multiple horizons of polymetallic (Cu-Pb-Zn-Ag) replacement skarn hosted mineralization, with increased copper grades to the west indicating that the porphyry system’s source may originate from the Sunnyside Property. Highlights from TCH-2 include:
|Drill Hole TCH-2|
|Depth (ft.) From||Depth (ft.) To||Vertical Thickness (ft)||Cu%||Pb%||Zn%||Ag oz/st|
TCH-2 was drilled prior to the implementation of National Instrument 43-101 Standard of Disclosure for Mineral Projects (“NI 43-101”), has not been verified by a “qualified person” and therefore should not be relied upon. It has been presented to provide an indication of the possible mineralization within the Sunnyside Property and as a guide to future exploration.
Terms of Option
The Option is exercisable in two stages with the Company entitled to acquire an initial 51% interest in the Sunnyside Property upon making payments totaling C$2,950,000 cash ($100,000 paid) and 10,100,000 common shares to Regal and cumulative expenditures of C$6,000,000 on the property during the first two years of the Option (following receipt of all required governmental permits).
Upon acquiring an initial 51% interest in the Sunnyside Property, the Company will be entitled to increase its interest to 67.5% upon payment of an additional C$550,000 cash and 4,900,000 common shares to Regal and the expenditure of an additional C$6,000,000 on the property within a further two year period.
The following is a summary of the Option earn-in requirements:
|Period||C$ Cash||Exploration Requirement C$||Number of Shares|
|To Earn 51% Interest|
|Upon execution of Definitive Agreement||$100,000 (paid)|
|Within 3 days following conditional acceptance of TSXV||650,000||-||1,250,000|
|On or before end of Year 1 *||1,200,000||3,000,000||3,850,000|
|On or before end of Year 2||1,000,000||3,000,000||5,000,000|
|To Increase Interest to 67.5%|
|On or before end of Year 3||-||3,000,000||-|
|On or before end of Year 4||550,000||3,000,000||4,900,000|
Upon the Company earning either a 51% interest or 67.5% interest in the Sunnyside Property, the Company and Regal will enter into and participate in a joint venture for the purpose of further exploring and developing the property. The Definitive Agreement contains provision for dilution of a party’s working interest for failure to fund joint venture cash calls, subject to automatic conversion of a party’s interest into a 5% net proceeds interest (not to exceed 90% of the net amount of the party’s contributed capital) if diluted to less than 10%. Barksdale will be the operator of the Sunnyside Property during the term of the Option and, if applicable, the joint venture.
The Definitive Agreement further provides that:
The Company may terminate the Option at any time, in its discretion, subject to satisfying any accrued obligations or liabilities including reclamation requirements, as required.
The Definitive Agreement remains subject to the acceptance of the TSX Venture Exchange (the “TSXV”).
The Company also announces a non-brokered private placement of 7,000,000 common shares at a price of C$0.40 per share to raise gross proceeds of C$2,800,000 (the “Private Placement”). The net proceeds of the Private Placement will be used to make the cash payment of C$650,000 to Regal upon TSXV acceptance of the Option, fund initial exploration programs on the Sunnyside Property and the Company’s previously acquired Swales project in Elko, Nevada (see news release dated December 16, 2016) (the “Swales Project”) and for general corporate and working capital purposes. The Private Placement is subject to acceptance of the TSXV and finder’s fees in accordance with TSXV policies may be payable in connection with the Private Placement.
The Company has received independent technical reports prepared in accordance with NI 43-101 for the Sunnyside Property and the Swales Project and will file same under the Company’s profile on SEDAR following acceptance by the TSXV.
Grant of Stock Options
The Company has also granted, subject to TSXV acceptance, stock options to directors, officers and consultants of the Company to purchase up to an aggregate of 2,000,000 common shares at a price of $0.42 per share exercisable for a period of five years.
The scientific and technical content and interpretations contained in this news release have been approved by Lewis Teal, CPG 6932, a consultant to the Company and a qualified person as defined by NI 43-101, Standards of Disclosure for Mineral Projects.
ABOUT BARKSDALE CAPITAL CORP. – Barksdale Capital Corp. is focused on the acquisition and exploration of highly prospective precious and base metal projects in the United States.
Neither the 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 or accuracy of this news release.
On behalf of the Board of Directors of Barksdale Capital Corp.,
Richard Silas, President and Director
FOR FURTHER INFORMATION PLEASE CONTACT:
This news release contains forward-looking statements, which relate to future events or future performance and reflect management’s current expectations and assumptions including, but not limited to, the prospective nature of the Sunnyside Property and the proposed Private Placement and intended use of proceeds therefrom. Such forward-looking statements reflect management’s current beliefs and are based on assumptions made by and information currently available to the Company. Investors are cautioned that these forward looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected. Risk factors affecting the Company include, among others: global financial conditions and volatility of capital markets, uncertainty regarding the availability of capital including the Private Placement, fluctuations in commodity prices; title matters; risks associated with mineral exploration including the timing and availability of permits, uncertainty surrounding exploration results and environmental issues and the additional risks identified in our filings with Canadian securities regulators on SEDAR. The close proximity of the Sunnyside Property to Arizona Mining’s Hermosa project is not necessarily indicative of the zinc and other mineralization present on the Sunnyside Property. These forward-looking statements are made as of the date hereof and, except as required under applicable law, the Company does not assume any obligation to update or revise them to reflect new events or circumstances.
THIS NEWS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES AND THE COMPANY IS NOT SOLICITING AN OFFER TO BUY THE SECURITIES DESCRIBED HEREIN. THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.