INTERNATIONAL GOLDFIELDS LTD 29 January 2016 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 31 December 2015.
International Goldfields has entered into a binding Heads of Agreement (HOA) to acquire an 85% stake in Winter Garden Biosciences ("WinterGarden" or "WG"). The HOA is subject to shareholder approval and the satisfaction or waiver of a number of conditions precedent.
WinterGarden 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.
WinterGarden 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.
The Company confirmed during the previous quarter that Due Diligence associated with the transaction with WinterGarden had been successfully completed to the full satisfaction of the IGS Board.
David Tasker Director
Travis Schwertfeger Director
Jason brewer Director
COMPANY SECRETARYJane Flegg
Suite 5, 531 Hay Street
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PO Box 684
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Telephone: +61 8 9489 4837
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Web Address: www.intgold.com.au
Email Address: info@intgold.com.au
AUSTRALIAN BUSINESS NUMBER69 099 544 680
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IGS
During that quarter WinterGarden also achieved a major milestone and received confirmation that it 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.
WinterGarden also took delivery of its first 1,000 kgs of seed and commenced planting of its maiden crop for further test purposes and preparation for control work in greenhouses.
Since that time WinterGarden, with the support of IGS, has been advancing fit out of its laboratory facilities and establishing key operational infrastructure at the farm, namely security and irrigation. Winter Garden has also advanced discussions with various parties so as to enable a ramp up of farming operations over a significantly wider area soon after completion of the proposed transaction.
While delays have occurred with the transaction, all parties are working together to aim to complete early in the current Quarter.
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.
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.
During the December quarter Biogold Investment Fund wholly funded a resource definition program at the Ouro Paz Gold Project comprised of a combination of trench excavation with representative channel sampling completed on nominal 1m intervals, and RC drilling activity to verify continuity of mineralisation and improve confidence in the MRE. The exploration activity occurred within the footprint of previously reported exploration results, and included over 1,300 linear metres of trenching in 43 trenches and 2519m of drilling in 31 RC holes reported to date.
IGS will further dilute in the Ouro Paz JV in accordance with the Joint Venture Agreement once December quarter expenditure on the Ouro Paz JV is reconciled with cash calls to Latin Gold Ltd totalling USD$255,000. A cash call for the March quarter exploration activities as at the time of reporting has not been received.
The Ouro Paz Joint Venture intends to finalise the RC drilling and trenching program to improve confidence in the existing oxide resource at the Ouro Paz JV. The JV Committee will assess the final results of the program and
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.
The Company has been in proactive and positive discussions with the ASX, WinterGarden and its 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 WinterGarden 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 WinterGarden and is Uruguay activities.
WinterGarden and International Goldfields are confident of signing definitive agreements during the early stages of this current quarter, after which time a timetable to completion will become clear.
On 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 was formed to represent the interests of unsecured creditors in the chapter 11 cases. A representative of 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.
It is expected that a final outcome on IGS position in SFEG will be determined by the courts in February/ March 2016.
While the Company's main focus is now on completing the Wintergarden 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.
It is expected that a resolution to the Santa Fe matter is expected to be completed in the coming weeks, which will likely see some funds come into the company during the early stages of the next quarter. In addition to this
the Company is well advanced in discussions with funding groups regarding a funding package that would provide immediate funding to the company to sustain itself for the coming quarter, to fund expense requirements associated with completion of the Wintergarden transaction, and a large package on support of Completion of the Winter Garden transaction. It should be noted that these discussions remain confidential and incomplete. Should a binding agreement be reached it will be disclosed to shareholders via an ASX filing.
Any proposed funding would be done within the guidelines and approvals required by the ASX. 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 |
International Goldfields Limited issued this content on 29 January 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 05 February 2016 08:56:00 UTC
Original Document: http://www.intgold.com.au/IRM/PDF/2307/QuarterlyReportforPeriodEnding31December2015
