VANCOUVER, BRITISH COLUMBIA--(Marketwired - Dec. 7, 2015) - IDM Mining Ltd. (TSX:IDM) ("IDM" or the "Company") is pleased to announce that it has entered into a Binding Term Sheet with Oban Mining Corporation (TSX:OBM) ("Oban") pursuant to which Oban has agreed to vend its extensive portfolio of precious and base metal properties located in Yukon and invest $1 million by way of a non-brokered private placement in exchange for an aggregate of 18,300,000 common shares of IDM (the "Transactions").
"IDM is excited to welcome Oban Mining as a significant shareholder," said Rob McLeod, President and CEO. "Oban's access to capital as well as mine development and exploration expertise will be welcome as we advance engineering, permitting and economic studies on IDM's flagship Red Mountain Underground Gold Project near Stewart, B.C., and we are thrilled to add their extensive Yukon portfolio to our exploration pipeline."
Michael McPhie, Executive Chairman of IDM added, "The IDM team led by our CEO, Rob McLeod, has had significant exploration success in the Yukon; with Underworld Resources, he and his exploration team discovered the White Gold deposit, leading to the largest staking rush in the Dawson Mining district since the Klondike Gold Rush. These highly prospective properties from Oban provide another great opportunity to create future shareholder value with IDM."
Oban has agreed to subscribe for 11,111,111 common shares of IDM at a price of $0.09 per share, for gross proceeds of $1 million, by way of a non-brokered private placement.
The Yukon portfolio consists of 14,310 claims covering 54 properties in 65 claim groups totaling 308,000 hectares (the "Properties"). The Properties cover multiple tectonic and metallogenic environments as well as a variety of mineral deposit styles common in Yukon. The Properties were previously held by Ryan Gold Corp. ("Ryan Gold") and its subsidiaries, and received significant exploration work, with approximately $25 million (as disclosed in Ryan Gold's 2014 year end MD&A) in expenditures incurred. The Properties have limited holding costs.
Previous work by Ryan Gold included significant exploration drill programs on two of the Properties, with tens of thousands of rock and soil samples collected during grass-roots exploration programs in several districts throughout Yukon. Additionally, geophysical surveys and geologic mapping programs have outlined many anomalous areas that have not received follow-up work.
During the coming months, IDM will compile Ryan Gold's work, and prioritize the Properties for follow-up exploration.
As consideration for Oban's Yukon portfolio, IDM will issue 7,188,889 common shares and grant a 1% net smelter royalty over the Properties to Oban. The Properties are subject to certain other underlying royalties.
Following the closing of the Transactions, Oban will own a total of 18,300,000 shares of IDM, or approximately 19.9% of the shares of the Company and will be entitled to appoint one director to the board of directors of IDM and will continue to have that nomination right for as long as it holds at least 10% of the issued and outstanding shares of IDM. Following the closing of the Transactions, Oban will also be granted the right to participate in future equity financings of IDM on a pro rata basis to its shareholding immediately prior to any such financing, for as long as it holds at least 10% of the issued and outstanding IDM shares. In addition, Oban will be granted a 30 day right of first refusal over any royalty or stream agreements that IDM proposes to enter into from time to time for as long as it holds at least 10% of the issued and outstanding shares of IDM.
The Transactions are subject to the approval of the TSX.
A finders' fee is payable on the Transactions.
ABOUT RED MOUNTAIN
IDM Mining is currently earning an option to acquire a 100% interest in the 17,125 hectare Red Mountain property, located 15 kilometers northeast of Stewart, BC. Numerous precious and base metal targets have been identified by IDM and previous operators over a 15 km by 4 km trend of strong alteration and mineralized prospects. Since discovery in 1989, in excess of $40 million has been spent on the Project including a production sized underground ramp.
The Company recently entered into the BC and Canadian Environmental Assessment process for Red Mountain and intends to be in a position to make a Final Investment Decision (FID) in early 2017.
Technical work at Red Mountain including rigorous Quality Control/Quality Assurance programs, are overseen by Rob McLeod, P.Geo, President and CEO of IDM Mining, and a Qualified Person as defined by NI 43-101. Mr. McLeod prepared and approved the technical information contained within this release.
ABOUT IDM MINING LTD.
IDM Mining Ltd. is a mineral exploration company (TSX:IDM) based in Vancouver, BC, Canada. The Company's current exploration activities are focused on precious metals in British Columbia and Yukon. Further information can be found on the Company's website at www.IDMmining.com.
ON BEHALF OF THE BOARD of IDM Mining Ltd.
Robert McLeod, President, CEO and Director
Forward-Looking Statements: Some statements in this news release contain forward-looking information or forward-looking statements for the purposes of applicable securities laws. These statements include, among others, statements with respect to proposed exploration and development activities and their timing, the completion of the Transactions, opportunities to enhance the value of the Red Mountain Project and other plans and objectives of IDM. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, among others and in addition to those described elsewhere in this release, delays in obtaining or inability to obtain required government or other regulatory approvals, permits or financing, the risk of unexpected variations in mineral resources, grade or recovery rates, of failure of plant, equipment or processes to operate as anticipated, of accidents, labor disputes, and unanticipated delays in completing other development activities, the risk that estimated costs will be higher than anticipated and the risk that the proposed mine plan and recoveries will not be achieved, equipment breakdowns and bad weather, the timing and success of future exploration and development activities, exploration and development risks, mineral resources are not as estimated, title matters, third party consents, operating hazards, metal prices, political and economic factors, competitive factors and general economic conditions. In making the forward-looking statements, the Company has applied several material assumptions including, but not limited to, the assumptions that: required approvals, permits and financing will be obtained; the proposed exploration and development will proceed as planned; with respect to mineral resource estimates, the key assumptions and parameters on which such estimates are based; that the proposed mine plan and recoveries will be achieved, that capital costs and sustaining costs will be as estimated, and that no unforeseen accident, fire, ground instability, flooding, labor disruption, equipment failure, metallurgical, environmental or other events that could delay or increase the cost of development will occur, and market fundamentals will result in sustained metals and minerals prices. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as otherwise required by applicable securities legislation.