BB's Stock Haven

[Kobe Ginobili]

RMES .03 LOI NEWS OUT!!!

https://finance.yahoo.com/news/red-metal-resources-signs-loi-160000177.html

Red Metal Resources signs LOI to Merge with TomaGold

CNW Group September 19, 2016Comment
THUNDER BAY, ON , Sept. 19, 2016 /CNW/ - Red Metal Resources Ltd. (RMES) ("Red Metal") is pleased to report that it has signed a Letter of Intent ("LOI") to sell, pursuant to a takeover bid, business combination or similar transaction, all of the issued and outstanding common shares of Red Metal Resources Ltd., namely 34,290,302 common shares, as well as all of the common shares of Red Metal that may be issued upon the exercise of any options, warrants or other convertible securities after the formal filing of the transaction but before its closing (the "Transaction"). The proposal would be that such Red Metal shareholders will receive in exchange an aggregate consideration of CAD$3,250,000 payable through: (i) the payment in cash of the Red Metal's debts for a maximum amount of CAD$500,000 ; and (ii) for the remainder of the aggregate consideration, the issuance of class "A" common shares of the capital stock of TomaGold at a price that is the higher between the average market price over the 20 days before the execution date of the Definitive Agreement and of CAD$0.15 , subject to a maximum price of CAD$0.20 . The parties to the transaction are at arm's length.

The LOI includes customary provisions, including non-solicitation of alternative transactions, the right to match superior proposals and the closing by TomaGold of a financing of CAD$700,000 before the closing of the Transaction. The parties have agreed to a break-up fee of CAD$175,000 (i) payable to TomaGold if Red Metal is in default of this LOI and if a superior proposal is accepted by Red Metal's shareholders, and (ii) payable to Red Metal if TomaGold does not complete the Transaction for reasons other than discovering an issue with their confirmatory due diligence.

Red Metal owns, or has the option to own, 100% of three projects (Farellon, Perth and Mateo) located in the prolific Candelaria iron oxide copper-gold (IOCG) belt of Chile's coastal Cordillera, host to Freeport McMoRan's Candelaria Mine and Anglo American's Mantoverde Mine.

Farellon property

(100% interest in six claims and option to earn a 100% interest in two claims)

The Farellon property is located 150 km southwest of Copiapo, Chile , and consists of eight mining claims totalling 1,234 hectares in the Carrizal Alto mining district, more precisely 3 km southwest of the historic Carrizal Alto mine. It is easily accessible year-round by dirt roads and is located close to power, water and a major urban centre, Copiapo, with a readily available mining workforce.

Historical records indicate that copper mining commenced at Carrizal Alto in the 1820s and continued on a significant scale, mostly by British companies, until 1891 when disastrous flooding occurred and mines closed. Historical reports indicate that the larger mines were obtaining good grades over significant widths in the bottom workings at the time of closure. It is estimated that during this period, over 3 million tonnes with grades in excess of 5% copper and widths of 8 m was extracted, including a large quantity of direct shipping mineralized material at 12% copper (Source: Ulriksen, C. (1991), Carrizal Alto Mining District, Vallenar, III Region, Chile , 7 p.).

Work completed to date on the Farellon property has been focused on a 1.6 kilometres stretch of mineralized veins hosted in a 10 to 25-metre-wide shear zone, a further 2.5 kilometres of this shear zone have been explored on surface and show similar geology and mineralization on surface as the zone that has been previously drilled. A total of 6,992 metres of drilling was completed in three programs along a 1.3 km strike length. The following table summarizes the best results obtained to date.







HOLE_ID
From
(m)
To
(m)
Length
(m)
Cu
(%)
Au
(g/t)
FAR-96-007
25
34
9
1.05
0.38
FAR-96-009
72
83
24
1.01
0.57
FAR-96-009
62
65
3
2.24
0.67
FAR-96-015
59
79
20
0.98
0.99
FAR-96-015
99
109
10
1.02
0.18
FAR-96-022
29
39
10
1.31
1.53
FAR-96-022
100
108
8
2.49
3.72
FAR-96-023
132
147
15
1.42
0.60
FAR-96-024
33
36
3
2.89
0.94
FAR-96-025
65
85
20
1.22
0.97
FAR-09-B
75
86
11
0.67
1.35
FAR-09-C
73
103
30
0.79
0.55
FAR-09-C
77
82
5
4.16
2.57
FAR-11-001
36
49
13
2.51
0.35
FAR-11-001
36
44
8
3.95
0.53
FAR-11-001
37
43
6
5.09
0.64
FAR-11-006
80
112
32
1.35
0.99
FAR-11-006
84
96
12
2.18
2.10
FAR-13-002
47
54
7
2.15
0.28


The table above shows grades and widths of mineralization which are consistent with historic drilling results and have also given valuable geological information showing multiple veins and the potential for wide zones of economic mineralization. The true width of the drill hole intersections cannot be determined from the information available, as it was RC drilling.

In 2014, Red Metal entered into a contract with a Chilean artisanal miner allowing the artisanal miner to mine on the Farellon property in return for a 10% net sales royalty. In January 2015 the artisanal miner first started selling mineralized material to ENAMI, a Chilean national mining company, and has since sold 9,953 tonnes of sulphide mineralized material grading 1.82% Cu, 6.56 g/t Ag and 0.25 g/t Au, as well as 1,813 tonnes of oxide mineralized material grading 1.56% Cu (Source:RMES Annual and Quarterly Reports).