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Green Swan Capital acquires 33 mining claims in Ontario
2017-02-21 14:55 ET - News Release
Mr. Peter Clausi reports
GREEN SWAN EXPANDS PORTFOLIO
Green Swan Capital Corp. has added to its portfolio of low-cost, highly prospective mining assets in high-quality mining jurisdictions. This acquisition consists of 33 mining claim units contained within four claim blocks in Otto township in the Larder Lake mining division in Ontario.
The Otto assets lie roughly eight kilometres southwest of Kirkland Lake and proximate to the former producing Swastika mine, Ontario's first producing gold mine (1907). Infrastructure is readily available. The Otto assets can be directly accessed off the Trans-Canada Highway through the town of Swastika.
Green Swan's chief executive officer, Peter M. Clausi, said: "Our team took an undervalued forgotten cobalt/gold asset in Sudbury and created a great real shareholder value from it. We intend to do the same with the Otto assets."
The most recent work on the Otto assets was a soil geochemistry report in 2012. Gold, palladium, copper, zinc, nickel and lead values were returned. Page 11 of the Ministry of Northern Development and Mines report, "Soil Geochemistry and Prospecting on Claim Nos. 4246905, 4250913, 4251194; Otto Township; Larder Lake Mining Division, L.Currah, 2012," concluded: "Further prospecting and geochemical surveys to the northeast and a further extension along trend may be warranted. It appears that average background levels increased to the east and several anomalies occurred at the northeast boundary of the sampling area."
Green Swan has not performed any work on the Otto assets, which have been explored by third parties since 1975. Historical work has included prospecting, line cutting, limited diamond drilling, very low frequency and magnetic surveys, mapping, trenching, and soil sampling. Some, but not all, of the results from third party work are available to Green Swan. Green Swan cannot speak to the accuracy or thoroughness of historical work without further research and analysis.
Green Swan purchased the Otto assets from an arm's-length prior owner who encountered challenges advancing exploration on them. One of the difficulties was an inability to enter into economic exploration agreements with local communities including first nations. That prior owner had applied for a permit to drill from 11 to 20 pads, conduct mechanical excavation and carry out other mining-related activities, which permit has been stalled for some time in the Ontario Ministry of Northern Development and Mining. The Otto assets are on "special status" pending the resolution of the permit application, but, in Green Swan's opinion, it was highly unlikely the former owner would have been able to successfully advance its permit.
Green Swan's management has much experience in dealing with the Ontario permitting process and believes it can successfully advance the permit process with local communities, first nations and the MNDM. Green Swan is unable to state how long this process will take or what resources will be needed. However, as with its Sudbury cobalt/gold asset, Green Swan has demonstrated an ability to source and acquire lower visibility mining assets that can generate significant shareholder value.
The consideration for the acquisition is the granting of a 10-year net smelter return royalty, at 3 per cent for the first 200,000 ounces of gold and 2 per cent thereafter. During the term of the net smelter return royalty, if Green Swan files a National Instrument 43-101-compliant resource estimate of at least one million ounces of gold grading at least two grams of gold per tonne, Green Swan will, at that time, immediately owe the vendor a one-time payment of $250,000 (U.S.).
This acquisition is an exempt transaction and stock exchange approval was not required.
Green Swan intends to continue acquiring highly prospective assets in good mining jurisdictions and is focusing on cobalt acquisitions.
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