Metals Update 11/06/2021

Noront Resources closes $6.1-million private placement

Noront Resources Ltd. has completed its previously announced private placement financing of 21,659,385 common shares of the company at a price of 28.3 cents per common share for gross proceeds of approximately $6.1-million, excluding the Wyloo top-up shares (as defined herein).

In connection with the Private Placement, Wyloo Canada Holdings Pty Ltd. (“Wyloo Canada”) exercised its top-up right to maintain its pro rata equity interest in the Company (the “Wyloo Top-Up”) by subscribing for an additional 12,744,363 Common Shares at the Issue Price (the “Wyloo Top-Up Shares”) for additional gross proceeds of approximately $3.6 million.

Accordingly, the Company issued an aggregate of 34,403,748 Common Shares at the Issue Price for gross proceeds of approximately $9.7 million pursuant to the Private Placement and the Wyloo Top-Up.

In addition, Baosteel Resources International Co. Ltd. (“Baosteel”) has a right to maintain its pro rata equity interest in the Company by acquiring an additional 1,966,125 Common Shares at the Issue Price (the “Baosteel Top-Up Shares”) for additional gross proceeds of approximately $0.55 million. Baosteel has until July 5, 2021 to exercise its top-up right to acquire the Baosteel Top-Up Shares.

The Common Shares issued pursuant to the Private Placement were distributed in offshore jurisdictions pursuant to Ontario Securities Commission Rule 72-503 {ࡰ –} Distributions Outside Canada and, as such, will not be subject to a statutory hold period in accordance with applicable securities laws. The Wyloo Top-Up Shares are subject to a hold period of four months and one day from the date of issuance.

TD Securities Inc. acted as agent and financial advisor to Noront in connection with the Private Placement and received a cash commission equal to 3% of the gross proceeds raised from the Private Placement.

The Private Placement remains subject to the final approval of the TSX Venture Exchange (the “Exchange”).

Wyloo Canada is a “related party” of Noront as Wyloo Canada is a person that has beneficial ownership of, and control or direction over, directly or indirectly, securities of Noront carrying more than 10% of the voting rights attached to all of Noront’s outstanding voting securities. As a result, the issuance of the Wyloo Top-Up Shares is a “related party transaction” pursuant to Multilateral Instrument 61-101 {೒ –} Protection of Minority Security Holders in Special Transactions (“MI 61-101”), incorporated by reference into Policy 5.9 {൰ –} Protection of Minority Security Holders in Special Transactions of the Exchange. Noront is relying on (i) the exemption set forth in sections 5.5(a) and (b) of MI 61-101 from the formal valuation requirement, and (ii) the exemption set forth in section 5.7(a) of MI 61-101 from the “minority approval” requirement, in connection with the issuance of the Wyloo Top-Up Shares.

Garibaldi increases Otter Creek to 8,704 hectares

Garibaldi Resources Corp. has added key claims expanding the company’s Otter Creek lode gold prospect to 8,704 total hectares within the Atlin goldfields. The Otter Creek claims are located 12 kms east of Atlin in northwest British Columbia. Atlin has been a rich placer gold mining district since the Klondike gold rush from the mid 1800’s to the present day, rivalling Barkerville during the Cariboo gold rush. Until recently, the source of Atlin’s coarse gold placers had remained elusive.

The first announcement of a new lode gold discovery on Otter Creek was made by British Columbia Geological Survey (BCGS) geologists in a 2017 published paper titled “A new lode gold discovery at Otter Creek: another source for the Atlin placers.” Garibaldi had previously acquired 100% ownership of the hard rock mineral rights on the discovery section of Otter Creek. Placer operations enabled geologists to sample and map the bedrock in excavated pits before backfilling, allowing access to the BCGS geologists who published the lode gold discovery.

The Otter Creek lode gold discovery provides strong evidence that Atlin’s rich coarse crystalline gold placers are sourced from proximal high-grade gold veins rather than previously assumed eroded distal listwanite deposits. Garibaldi’s new acquisition in the Atlin Gold fields consolidates a core land package that occupies nearly the entire 10 km length of Otter Creek. Significantly, Garibaldi’s geology team considers the expanded claims package covering the Otter Creek placers as an important exploration priority. With excellent road access and infrastructure, the discovery of bonafide in-situ bedrock-hosted gold, is a remarkable find with enormous potential.

Otter Creek Project Highlights

In 2017, the British Columbia Geological Survey published a paper titled “A new lode gold discovery at Otter Creek: another source for the Atlin placers.” (BCGS paper 2017-1pg.179-193) by Mihalynuk, M.G. Zagorevski, A., Devine F.A.M., and Humphrey, E.

Placer mining uncovered significant mineralization in bedrock, resulting in multiple samples of in-situ bedrock gold along Otter Creek. Bonanza grade gold is hosted in quartz veins emplaced along structures in phyllite bedrock. The coarse gold in bedrock supports a new placer source for the Atlin gold Fields.

A large north-south trending fault, with a series of secondary faults extends along Otter Creek providing a key structural setting for lode gold deposits. Rich placer deposits have been mined along these creeks and faults since the mid 1800’s.

Otter Creek and neighboring creeks including Spruce, Birch, Pine, Ruby and Wright creeks have produced some of the largest gold nuggets discovered in British Columbia, weighing from 24 to 83 oz of gold.

Garibaldi’s Otter Creek database includes 2282 MMI samples, a compilation of 1,884 historic soil samples, 15 IP lines, 143 km of walking mag, 263 line km airborne magnetic and electromagnetic (DIGHEM) surveys.

Drill target development will utilize the historical database, bedrock exposure of gold-bearing quartz veins, geophysical data, and analysis of a 728 sample SGH survey, used successfully in Red Lake Ontario.

Steve Regoci, Garibaldi CEO, stated: Similar to the Eskay Camp, Atlin has a long history of gold mining back to the 1860’s Cariboo and klondike gold rushes. Our strategy to acquire claim groups centered in the heart of mineral rich districts in B.C. during the last downturn has been very successful. The Eskay claim group is exceeding our highest expectations, while our other projects as well as the new expanded Otter Creek have exceptional potential.”

Jeremy Hanson, Garibaldi VP Ex, stated “Otter Creek emerges as another high priority gold project in Atlin, joining the Grizzly in NW BC, Red Lion in the Quesnel Trough and ToraTora within the Spences Bridge Gold Belt (SBGB). Each of these projects are in well-endowed mineral districts with strong potential for discoveries. The company’s focus remains E&L and the Eskay claim group, however the expansion of the Atlin discovery is exciting news, reminding shareholders about our other great projects, which we’ll be updating as they’re advanced.”

Mountain Province sells $64.5-million in carats in Q2

Mountain Province Diamonds Inc. has released the results of its second quarter diamond sales and has provided an update on the company’s upside share of profits from the diamond sales agreement with Dunebridge Worldwide Ltd. dated June 11, 2020.

The company is pleased to report the completion of its sales for the quarter, with 718,549 carats sold for total proceeds of $64.5-million ($52.6-million (U.S.)), resulting in an average value of $90 per carat ($73 (U.S.) per carat). This second quarter 2021 sales result represents a 3-per-cent increase in U.S.-dollar terms relative to the 603,000 carats sold for $54.2-million ($42.7-million (U.S.) in first quarter 2021 at $71 (U.S.) per carat). The mix of diamonds sold varied across the quarters, and on a direct comparison basis, second quarter market prices are approximately 18 per cent higher than those achieved in the first quarter.

Demand in the rough diamond market is robust, supported by polished diamond price increases and buoyant jewellery retail sales in the United States and China. At its most recent sale held over the past two weeks in Antwerp, Belgium, the company saw high demand and increased customer interest across all rough diamond categories.

In addition to the company’s sales, in Q2 2021, Dunebridge also completed the sale of all diamonds purchased from the company in 2020 (see news release dated June 11, 2020, for details on the agreement). After fees and expenses, the company received $10.4-million ($7 per carat) this week, being its total share of the value uplift. The company believes this further confirms the growing demand and pricing trends in the natural rough diamond market.

The improved cash inflow from Dunebridge has resulted in the company reducing the planned $10-million (U.S.) draw on the final tranche of the Dunebridge term facility (see news release dated May 12, 2021), down to $8-million (U.S.). The lower draw on the second tranche will result in lower fees, as well as a lower interest expense.

Mountain Province president and chief executive officer Stuart Brown commented: “This is an excellent result for the company. Producers are reporting strong demand and higher diamond prices at their sales, which we have also seen with our latest offering. This is additionally supported by the results from the Dunebridge sales. We remain optimistic that as the global economy continues to recover, the current positive pricing and demand momentum throughout the diamond industry will continue and translate into improved margins for the company.”