Vancouver, British Columbia — DESERT MOUNTAIN ENERGY CORP. (the “Company”) (TSX.V: DME) is pleased to announce that it has signed a binding Asset Purchase and Sale and Royalty Agreement (the “Agreement”) with Brixton Metals Corporation (TSX.V: BBB) (“Brixton”), pursuant to which it is selling all of its right, title and interest in the Yellowjacket Gold Project and related mineral tenures in the Atlin, B.C. mining camp (the “Property”) to Brixton on the terms and conditions set forth therein.
Under the terms of the Agreement, the Company has agreed to sell to Brixton and Brixton has agreed to purchase, all of the Company’s title and interest in all of its mineral claims in the Property, comprising 51 claims covering an area of approximately 28,589.76 hectares, which encompasses the permitted Yellowjacket Gold Mine in the Pine Creek Area 9 km E of Atlin, as well as other hard-rock claims in the district deemed to be highly prospective exploration targets for gold mineralization. The Company previously sold its placer mining tenures in the Atlin mining camp to Altan Mining Ltd., of Delta, B.C. (see PR dated May 8, 2018).
The Company has also agreed to release and transfer to Brixton all of the Company’s rights to: (i) the Reclamation Bonds which are held in trust by the Government of B.C. in respect of the Property, aggregating approximately $172,051; and (ii) the Mines Act Permit issued for the Yellowjacket Gold Mine, # M-235, RSBC 1996, c 293, as amended, together with certain other exploration and environmental permits relating to the Property. The Company is also transferring to Brixton all documents, data, reports, studies, drill core, assays and other technical information relating to the Property.
In consideration for all of the above, Brixton has agreed to pay to the Company on closing the sum of $50,000 in cash and to issue to the Company on closing 4,300,000 fully paid and non-assessable Common Shares of Brixton. Said Shares shall bear a legend imposing a trading restriction as follows: (i) as to 1 Million Shares, 6 months from closing; (ii) as to 1 Million Shares, 12 months from closing; (iii) as to 1 Million Shares 18 months from closing; and (iv) as to 1.3 Million Shares 24 months from closing. In addition, Brixton has agreed to pay to the Company a 1.0% net smelter returns royalty (NSR) on all ore produced from the Property in perpetuity, subject to a right of repurchase by Brixton for the sum of $1.25 Million in cash at any time up to 90 days following initial commercial production from the Property.
In a separate transaction, the Company is selling to Brixton all equipment and supplies on site for nominal consideration. Any future disposition will entail significant expenses in disassembling, loading and transportation of the equipment and supplies and disposing of waste material.
According to Irwin Olian, CEO of the Company, “We believe this sale of the Yellowjacket Gold Project and our Atlin tenures is a very favorable transaction for both the Company and Brixton. It allows the Company to devote its personnel and limited financial resources to development of its energy projects in the Southwest U.S., with immediate focus on our Heliopolis helium and oil & gas project in Arizona’s Holbrook Basin, where we now own 36,706 acres of highly prospective leases. This has become the new priority for the Company. The sale to Brixton allows the Company to retain a significant equity interest in the Property through ownership of a sizeable position in Brixton’s Common Shares as well as the 1% NSR payable to the Company. At the same time, the Company is relieved of further costs associated with exploration, development, care and maintenance of the Property. From the standpoint of Brixton, it allows Brixton to assemble and consolidate the predominant land package in the Atlin mining camp. With its excellent access to capital and strong technical team, Brixton is in a position to successfully develop the Property to achieve commercial success on a regional basis. This creates a win-win for all concerned.”
This transaction is subject to the approval of the TSX Venture Exchange and certain other terms and conditions. It has been approved by the respective Boards of Directors of both companies.
About Desert Mountain Energy
The Company is an exploratory resource company engaged in exploration and development of helium, oil & gas and mineral properties in the Southwestern United States. In addition, the Company owns the Yellowjacket Gold Project in Atlin, British Columbia, which it has recently been developing. The Company has its executive offices in Vancouver, Canada.
The Company was incorporated under the laws of the Province of British Columbia, on April 30, 2008, and was formerly named African Queen Mines Ltd. It initially received certain southern African assets in a spin off transaction related to the acquisition of Pan African Mining Corp. by Asia Thai Mining Co., Ltd.
On Behalf of the Board of Directors of Desert Mountain Energy Corp.
Chairman & CEO
For more information, contact:
President and CEO
Dubai: +971 55 997 0427
London: +44 (0) 7780 602 788
Germany: +49 (0) 21141 740411
U.K.: +44 (0) 870 490 5443
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of the information contained herein. The statements made in this press release may contain certain forward-looking statements that involve a number of risks and uncertainties. Actual events or results may differ from the Company’s expectations.