Saville Resources Ltd. Acquires Munn Lake Diamond Property Announces $750,000 Non-Brokered Private Placement Share Consolidation
SAVILLE RESOURCES INC.
Suite 1450 – 789 West Pender Street Vancouver, B.C.
V6C 1H2 Phone: 604-598-9804 Fax: 604-681-8240
SAVILLE RESOURCES LTD. ACQUIRES MUNN LAKE DIAMOND PROPERTY ANNOUNCES $750,000 NON-BROKERED PRIVATE PLACEMENT SHARE CONSOLIDATION
August 24, 2016 – Vancouver, BC: Saville Resources Ltd. (TSX.V:SRE) ("Saville" or the "Company") announces that it has entered into a property option agreement (the “Agreement”) dated August 24, 2016 to acquire the Munn Lake Diamond Property located in the Slave Province, Northwest Territories from DG Resource Management Ltd. (“DG Resource”) and Zimtu Capital Corp. (“Zimtu”) whereby Saville can acquire an undivided 100% interest in and to 19 mineral claims covering more than 14,000 ha (34,000 acres).
The Munn Lake Diamond Property is located approximately 35 km east of the Snap Lake Diamond Mine and 40 km northwest of the Gahcho Kué Mine scheduled to begin commencial diamond production in early 2017.
Historic Exploration Highlights
- From 1996 and 2007, SouthernEra Resources Ltd. spent at least $5.7 million* as the operator
of the diamond exploration program at Munn Lake
- Diamondiferous “Yuryi” Boulder Field**
- 226 diamonds, including 62 macro-diamonds returned from 581 Kg sample
- Boulders up to 25 m in diameter
- Diamondiferous Munn Lake Kimberlite***
- 14 diamonds including 2 macro-diamonds and 12 micro-diamonds returned from 42 kg
sample
- Drill-indicated total length of 1.3 km
- True thickness between 12 m - 0.25 m
- Four additional Kimberlite Indicator Mineral (KIM) trains on the property, sources yet to be
identified Historic Exploration Details
The “Yuryi” boulder field, “hosts spectacular pyrope garnet chemistry with over 40% of the pyropes occurring within the G-10 field, suggesting that the diamond potential of the primary kimberlite source is excellent. The ‘Yuryi’ kimberlite has returned 226 diamonds, including 62 macrodiamonds from 581 kilograms (kg) of processed kimberlite. One 0.12 carat diamond was also recovered from the sample”** (A macrodiamond has 1 dimension greater than 0.5 millimetres.)
The drill-tested Munn Lake Kimberlite varies in true thickness from 12 metres (m) to 0.25 m. A 42 kg sample, from two diamond drill core holes and one sonic drill hole, returned excellent microdiamond counts with a majority of the diamonds of very good white color and quality. 14 diamonds were noted, including 2 macrodiamonds and 12 microdiamonds. *** In addition to the indicator train that might be attributed to the diamondiferous Munn Lake Kimberlite at least four additional indicator trains with very robust kimberlitic mineral chemistry have been identified on the property. The sources for these indicator trains have yet to be been identified. **** The “North Margaret Lake Indicator Train” is approximately 300m wide by 7km in length and results suggest the definition of an up-ice cut-off point to the indicator train. Individual samples returned up to 159 indicators. **** *Kalahari Resources Inc. AIF, 10/16/2002, page 10 ** SouthernEra news release, February 18th, 1999 *** SouthernEra news release, June 8th, 1999.
**** SouthernEra news release, October 5th, 2000
Terms of the Agreement
In consideration of the grant of the option, Saville has agreed to pay to DG Resource and Zimtu an aggregate of $200,000 cash and the issuance of 6,000,000 post consolidated common shares of Saville divided equally between the Vendors as follows:
- $100,000 upon closing of a financing for gross proceeds of at least $500,000;
- issue 3,000,000 common shares upon Exchange acceptance;
- an additional $50,000 within one year of Exchange acceptance, or upon the raising of $1,000,000;
- issue an additional 2,000,000 common shares one year after the Exchange acceptance; and
• an additional $50,000 within two years of Exchange acceptance; and
- an additional 1,000,000 common shares two years of Exchange acceptance.
DG Resource and Zimtu will retain a 2% Gross Overriding Royalty (“GORR”) on all diamond production divided equally between the vendors. Saville shall be entitled at any time to purchase 1% GORR from Zimtu for $2,000,000 in respect of all minerals other than diamonds.
DG Resource and Zimtu will also retain a 2% Net Smelter Return (“NSR”) on all other production divided equally between the vendors. Saville shall be entitled to at any time purchase 1% of the NSR for $2,000,000 payable 50% to each of the vendors.
The Agreement is subject to final acceptance of the TSX -V Exchange (“Exchange”).
Share Consolidation
The Company also announces that it will be proceeding with a consolidation of its share capital as approved at the 2016 Annual and Special Meeting of shareholders held on June 29, 2016. The consolidation of the common shares of the Company on the basis of Five (5) pre-consolidation shares for one (1) post-consolidation share. The 25,891,911 common shares of the Company outstanding, would reduce to approximately 5,178,382 common shares.
Non-Brokered Private Placement
Saville has arranged a non-brokered private placement financing subject to Exchange acceptance, of up to 12,500,000 Units (“Units”) of the Company at a price of $0.06 per Unit (post-consolidation) for gross proceeds of up to $750,000. Each Unit will consist of one common share in the capital of the Company and one common purchase share warrant with each warrant exercisable into one common share at $0.10 for a period of 24 months from closing.
Proceeds of the private placements will be used to conduct exploration on the Company’s Munn Lake Diamond Property and for general working capital. Finders frees may be payable by the Company on a portion of the offering in accordance with the Exchange policies and guidelines. All of the securities issued under this offering will be subject to a hold period expiring four months from closing.
NI 43-101 Disclosure
Neil McCallum, P.Geol., Dahrouge Geological Consulting Ltd., a Qualified Person as defined by National Instrument 43-101, has reviewed the technical information in this news release.
ON BEHALF OF THE BOARD
SAVILLE RESOURCES LTD.
“Steven Chen”
President and CEO
Neither the 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.
Forward-Looking Statements
This news release contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. For example forward looking statements in this press release include and are not limited to the acquisition of the property and any reference to future work commitments; share consolidation and the proposed private placement. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that our shareholders may not approve the share consolidation, the TSXV may not approve the acquisition on the negotiated terms, creditors may not complete debt settlements, we may not raise sufficient funds to carry out our plans, changing costs for mining and processing; increased capital costs; the timing and content of upcoming work programs; geological interpretations based on current data that may change with more detailed information; potential process methods and mineral recoveries assumption based on limited test work and by comparison to what are considered analogous deposits that with further test work may not be comparable; the availability of labour, equipment and markets for the products produced; and despite the current expected viability of the project, that the minerals on our property cannot be economically mined, or that the required permits to build and operate the envisaged mine cannot be obtained. The forward-looking information contained herein is given as of the date hereof and the Company assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.