INTERNATIONAL GOLDFIELDS LTD 30 October 2015 www.intgold.com.au
International Goldfields Limited (ASX: IGS) ('IGS' or 'the Company') is pleased to provide the following commentary and Appendix 5B for the quarter ending 30 September 2015.
International Goldfields has entered into a binding Heads of Agreement (HOA) to acquire an 85% stake in Winter Garden Biosciences ('Winter Garden' or 'WG'). The HOA is subject to shareholder approval and the satisfaction or waiver of a number of conditions precedent.
Winter Garden is an emerging agriculture bioscience and biotechnology company based in Uruguay, with the aim of becoming one of the first companies in the world to legally harvest and produce non-synthetic cannabis products for the mass-market.
Uruguay is the first nation in the world to federally legalise research and development, as well as cultivation, sale and consumption of non-synthetic cannabinoids. Winter Garden, which possesses a plantation site, corporate headquarters and a laboratory in Uruguay, is able to take advantage of these new laws and regulations to become one of the first companies in the world to legally develop cannabis products.
Federal Uruguayan laws not only facilitate the legal use and research of cannabis, but also provision the use of cannabinoids containing a higher percentage of Tetrahydrocannabinol (THC), which is the psychoactive substance found within cannabis. Globally, growth and research on cannabis with a THC content of more than
.03% is prohibited. This has altered every aspect of the plant to the point that it offers almost no useful research benefits. As a result, only synthetic plants can be utilised for research and these are ineffective and inadequate for both research as well as pharma-grade medical applications.
Winter Garden is seeking to grow, research and produce cannabis plants containing a THC content of approximately 1%. The higher THC content will assist Winter Garden to develop products that will provide clinical relief for a variety of neurological ailments. The ailments which could be improved by medicinal cannabis products are wide- ranging, from depression and post-traumatic stress disorder to anti-inflammation and neuropathic pain.
Michael Edwards Chairman
David Tasker Director
Travis Schwertfeger Director
COMPANY SECRETARYJane Flegg
Ground Floor, 1 Havelock Street WEST PERTH WA 6005
PO Box 684
WEST PERTH WA 6872
Telephone: +61 8 9488 5220
Facsimile: +61 8 9324 2400
Web Address: www.intgold.com.au
Email Address: info@intgold.com.au
AUSTRALIAN BUSINESS NUMBER69 099 544 680
Advanced Share Registry Services Pty Ltd 110 Stirling Hwy
Nedlands WA 6009
Tony Dawe PPR
T: 08 9388 0944
E: Tony.Dawe@ppr.com.au
IGS
During the period International Goldfields Limited confirmed that Due Diligence associated with the transaction with Winter Garden was successfully completed to the satisfaction of the IGS board.
Another key milestone was achieved by Winter Garden during the quarter, being the confirmation that Winter Garden had obtained a range of key permits, licenses and authorisations from the federal Uruguayan government, which included the ability for Winter Garden to be able to import any and all varieties of hemp and cannabis Sativa-L (heirloom varieties), with no restrictions on cultivars and tonnage.
Within this same announcement it was confirmed that Winter Garden had taken delivery of its first 1,000 kgs of seed and commenced planting of its maiden crop and preparation for control work in greenhouses.
These milestones enabled International Goldfields to undertake final discussions with the ASX, Winter Garden and financiers regarding completion of the proposed transaction. While delays have occurred these negotiations remain ongoing and in the Company's view are nearing completion. The option agreement with Winter Garden remains in place until, at least, 31 December 2015.
GOLD EXPLORATION ACTIVITY - BRAZIL
The Ouro Paz Gold Project is located in the state of Mato Grosso, Brazil, held in Joint Venture (Ouro Paz JV) between Brazil-based operator Biogold Investment Fund and IGS's 93% held subsidiary Latin Gold Ltd, where Latin Gold Ltd holds a 20% interest in the Ouro Paz JV. The Ouro Paz Gold Project is host to a maiden Mineral Resource Estimation (MRE) of 3.4M tonne Measured & Indicated Resource averaging 2.55g/t gold, and a 5.1M tonne Inferred resource averaging 2.48g/t gold for a total of 690,000oz Au of contained metal as announced on 19 December 2013.
No exploration activities or mining production and development activities were reported during the September Quarter.
The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement dated 19 December 2013 and, in the case of estimates of Mineral Resources that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.
Subsequent to the reporting period, repayment of a funding agreement with Joint Venture partner in Brazil was completed. A funding agreement was completed to finance exploration activity completed during the 2014-15 financial year. Repayment of the debt, was made in shares in the JV entity as provided for in the financing agreement and in accordance with the Joint Venture Agreement. The majority JV partner will acquire Latin Gold Ltd's shares issued in Ouro Paz during the funding period in accordance with an agreed straight-line dilution formula.
IGS will further dilute in the Ouro Paz JV in accordance with the Joint Venture Agreement with subsequent cash calls totalling USD$255,000 for exploration activity planned for the project.
The net effect of the dilution events currently being executed will see Latin Gold Ltd's share participation to be reduced to 20% ownership in the Ouro Paz JV. (refer to ASX announcement dated 30 October 2015).
The Ouro Paz Joint Venture intends to undertake an RC drilling and trenching program to improve confidence in the existing oxide resource at the Ouro Paz JV.
IGS remains committed to the Ouro Paz Joint Venture and continues to engage regularly with Biogold Investment Fund to plan exploration activity and additional work related to advancing the project towards a decision to mine.
As detailed above, International Goldfields has been in proactive and positive discussions with the ASX, Winter Garden and financiers for some time so as to ensure the most efficient path forward for completion of the proposed transaction and while all parties are disappointed delays have occurred in relation to completion of the transaction all stakeholders remain committed to its completion.
So as to enhance the financial capabilities of the proposed transaction and ensure Winter Garden has the necessary funding to capitalise on a number of key development initiatives, the Company has been reviewing a range of transactions and funding opportunities/alternatives. The Company is confident that the financing path forward will be announced shortly with a clear and desirable outcome for Winter Garden and is Uruguay activities.
The option agreement between Winter Garden and International Goldfields remains in place and should be converted to definitive agreements during the current quarter.
Santa Fe Gold CorporationOn 26 August 2015 the Company advised that, Santa Fe Gold Corporation ('Santa Fe' or 'SFEG') and three affiliates filed voluntary chapter 11 cases pursuant to the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. In its chapter 11 filings, Santa Fe has indicated, among other things, that it intends to conduct a process to sell substantially all of the debtors' assets and, to facilitate a sale process, has entered into a debtor-in-possession loan facility with Waterton Global Value, L.P. ('Waterton') and a stalking horse purchase agreement with Waterton under which Waterton proposes to purchase the debtors' assets. The loan facility and sale process are subject to the approval of the bankruptcy court.
A committee of unsecured creditors of Santa Fe has been formed to represent the interests of unsecured creditors in the chapter 11 cases. The Company has been appointed to this committee and will work with the other members of the committee to maximise the recovery to unsecured creditors and to achieve an outcome that is in the best interests of the creditors.
IGS has 9,259,259 shares in Santa Fe and Convertible Notes worth a combined US$4 million, plus accrued interest, expiring in October 2015.
While the Company's main focus is now on completing the Winter Garden acquisition (referred to above), the Company will continue to engage with Biogold Investment Fund, JV partner to the Ouro Paz Joint Venture, to plan exploration activity and additional work related to advancing the project towards a decision to mine. The Company will also work closely with the unsecured creditors of Santa Fe to maximise the recovery to them that is in the best interests of all.
For and on behalf of the board
David Tasker Director
FOR FURTHER INFORMATION, PLEASE CONTACT: |
International Goldfields |
T: +61 8 9488 5220 |
E: info@intgold.com.au |
Professional Public Relations Tony Dawe T: +61 8 9388 0944 E: tony.dawe@ppr.com.au |
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