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Gold/Mining/Energy : BGM

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From: howestreetbull9/7/2018 1:53:55 PM
   of 127
Barkerville signs $33M royalty deal with Osisko Gold

2018-09-06 08:09 ET - News Release

Mr. Chris Lodder reports


Barkerville Gold Mines Ltd. has entered into a second amended and restated royalty purchase agreement with Osisko Gold Royalties Ltd. pursuant to which Osisko will acquire from Barkerville a 1.75-per-cent net smelter return (NSR) royalty on the Cariboo property for the aggregate purchase price of $20-million in immediately available funds.

Of the purchase price payable on closing, $2-million will be kept by Barkerville in a segregated restricted account and will not be available to Barkerville until certain conditions precedent are satisfied. Those conditions precedent include the delivery to Osisko of certain waivers and consents required from third parties in connection with the royalty transaction.

Under the terms of the royalty purchase agreement, the corporation also has the option to grant Osisko an additional 1-per-cent NSR on the property for additional cash consideration of $13-million, at any point between the closing date of the royalty transaction and Dec. 31, 2018. In order to grant the option royalty and receive the additional consideration, Barkerville must have successfully satisfied the conditions precedent to the release of the restricted funds.

In the event that the corporation announces a change of control during the royalty option period, or Osisko participates in an equity financing of the corporation during the royalty option period, if the option royalty remains unexercised, Osisko will have the right to purchase the option royalty.

As part of the royalty transaction, Barkerville will grant to Osisko 10 million common share purchase warrants of the corporation. The warrants will be exchangeable for common shares of the corporation at an exercise price of 75 cents per common share for a period of 36 months following the closing of the royalty transaction. All securities issued under the royalty transaction will be subject to a hold period expiring four months and one day from the date of closing.

The gross proceeds from royalty transaction will be used by the corporation to finance exploration and studies related to the property and for general corporate purposes. The royalty transaction remains subject to the final approval of the TSX Venture Exchange.

Related-party disclosure

The royalty transaction is considered to be a related-party transaction for purposes of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions -- and Policy 5.9 -- Protection of Minority Security Holders in Special Transactions of the TSX Venture Exchange. The corporation is relying on exemptions from the formal valuation and minority shareholder approval requirements available under MI 61-101. The corporation is exempt from the formal valuation requirement in Section 5.4 of MI 61-101 in reliance on sections 5.5(a) and (b) of MI 61-101 as the fair market value of the transaction is not more than the 25 per cent of the corporation's market capitalization, and no securities of the corporation are listed or quoted for trading on prescribed stock exchanges or stock markets. Additionally, the corporation is exempt from minority shareholder approval requirement in Section 5.6 of MI 61-101 in reliance on Section 5.7(b) as the fair market value of the transaction is not more than the 25 per cent of the corporation's market capitalization. The board of directors of Barkerville approved the royalty transaction, with Sean Roosen, John Burzynski and Chris Lodder having declared a conflict of interest in, and abstaining from voting on, the matters being considered.

About Barkerville Gold Mines Ltd.

The company is focused on developing its extensive mineral rights package located in the historical Cariboo mining district of central British Columbia. Barkerville's Cariboo gold project mineral tenures cover 1,950 square kilometres along a strike length of 67 kilometres which include several past-producing placer and hardrock mines, making it one of the most well-endowed land packages in British Columbia. Since the management change in mid-2015, the company has unlocked the fundamental structural controls of gold mineralization. The company's brownfields exploration team is focused on developing and delineating a minable resource within the seven kilometres of principal project area located near the town of Wells, B.C.

We seek Safe Harbor.

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