VANCOUVER, BRITISH COLUMBIA–(Marketwired – May 23, 2017) – Pan Global Resources Inc. (“Pan Global” or the “Company”) (TSX VENTURE:PGZ) is pleased to announce the Company has entered into a Letter of Intent (LOI) with Evalam 2003 S.L. (the “Vendor”), a private Spanish company, to purchase 100% of the Vendor’s gold / copper / zinc mineral prospect in Spain, subject to a royalty as described below. The Vendor has applied for an exploration license in the provinces of Seville and Huelva, Kingdom of Spain, to conduct evaluation and mineral exploration on a mineral prospect known as the “Escacena Property”. The proposed transaction is subject to a number of conditions, including TSXV approval.
The Escacena Property
The Escacena Property covers 68 mining quadriculars or approximately 2,060 hectares in the Iberian Pyrite Belt, on the Western extension of the same trend of volcanic rocks that host large massive sulphide ore deposits at the Aznalcollar, Los Frailes and Las Cruces Mines. It is within 5km of Aznalcollar mine. The project includes an untested gravity anomaly with adjacent copper and gold mineralization. Historical channel sampling along the full length of a mine tunnel along a fault up-dip from the gravity anomaly returned 30m at an average grade of 2.06 grams per tonne gold. From information provided by the Vendor, wide-spaced drilling by Exxon on separate gravity target in the south of the property shows broad intervals of stock work copper mineralization and massive sulphide mineralization under Tertiary sedimentary cover over approximately 1.3 kilometres strike, and is open in several directions. Better intervals include, 4.68 metres at 2.94% copper, 3 metres at 3.24% copper and 2.82 metres at 2.2% copper. The area has not had any modern exploration for 30 years.
Terms of the Acquisition
The terms of the LOI provide for payment of CAD$350,000 to the Vendor and funding by the Company of $1,000,000 in exploration expenditures under the following conditions:
- Cash Payments
Subject to TSXV approval, Pan Global will make cash option payments to the Vendor as follows:
| Date | Amount | Cumulative | |||
| Issuance Date* (defined below) | $ | 30,000 | $ | 30,000 | |
| 12 months after Issuance Date | $ | 50,000 | $ | 80,000 | |
| 24 months after Issuance Date | $ | 100,000 | $ | 180,000 | |
| 36 months after Issuance Date | $ | 170,000 | $ | 350,000 | |
| Total | $ | 350,000 | |||
If Pan Global has not made the cash payments in the time and manner provided above, the Vendor may give Pan Global written of its intention to terminate the Option not less than 30 days from the date of the notice. During the notice period Pan Global may cure the default by making the cash payment, in which case the notice of termination shall be withdrawn.
- Exploration Expenditures
Subject to TSXV approval, Pan Global will incur the following exploration expenditures on or in connection with the Escacena Property:
| Date | Amount | Cumulative | |||
| 12 months after Issuance Date | $ | 200,000 | $ | 200,000 | |
| 24 months after Issuance Date | $ | 300,000 | $ | 500,000 | |
| 36 months after Issuance Date | $ | 500,000 | $ | 1,000,000 | |
| Total | $ | 1,000,000 | |||
Pan Global may at any time pay to the Vendor money in lieu of incurring Exploration Expenditures in which event Pan Global shall be deemed to have incurred additional Exploration Expenditures in the same amount as the amount of any such payment.
* “Issuance Date” shall mean the later to occur of the following events:
- Receipt of final acceptance of the transaction by the TSX Venture Exchange Inc.
- Issuance by the Sección de Minas de Seville y Huelva of the Kingdom of Spain, as applicable, of an exploration license to and conduct mineral exploration work upon the Escacena Property.
- NSR Royalty
Upon commencement of commercial production, Pan Global shall pay to the Vendor a royalty in an amount equal to a percentage of net smelter returns. The amount will be calculated quarterly based on production from the Escacena Property for the most recently completed calendar quarter, and will be 0.5% on the first 12,500 tonnes of copper equivalent and 0.75% on any amount in excess of 12,500 tonnes of copper equivalent. The royalty is subject to an aggregate lifetime maximum cap of $5,000,000.
Qualified Person
Robert Baxter (FAusIMM), a Director of Pan Global Resources and a qualified person as defined by National Instrument 43-101, has reviewed the scientific and technical information that forms the basis for this news release. Mr. Baxter is not independent of the Company.
About Pan Global Resources
Pan Global Resources Inc. is actively engaged in base and precious metal exploration in Spain, and is pursuing opportunities from exploration through to mine development.
On Behalf of the Board of Directors
Shares Issued and Outstanding: 60,085,387
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Tim Moody
President and CEO
[email protected]
INVESTOR RELATIONS
Michelle Borromeo
604-715-6845
[email protected]
