Vancouver - Kainantu Resources Ltd. ('KRL' or the 'Company') (TSX-V: KRL, FSE: 6J0) is pleased to announce that it has entered into a definitive agreement with Harmony Gold (PNG) Exploration Limited, a wholly-owned subsidiary of Harmony Gold Mining Company Limited to acquire 100% ownership of the Kili Teke Gold-Copper Project in Papua New Guinea.
Kili Teke is a significant advanced exploration porphyry gold-copper project with an existing mineral resource, and potential for further re-optimization and discoveries to increase overall value.
Highlights
KRL to acquire 100% of the Kili Teke project from HGEL: advanced exploration Au-Cu project in premier region of PNG; has an existing defined Inferred Mineral Resource of 237Mt @ 0.34% Cu (=0.8Mt Cu), 0.24g/t Au (=1.8Moz Au) and 168ppm Mo (=0.04Mt Mo), with an effective date of 30 June 2021; over 36,000m of drilling completed to date; significant exploration resource upside, with near surface, high-grade Au skarn mineralisation not yet included in the defined Mineral Resource; potential for re-optimisation, bringing Kili Teke significantly closer to production as an open-pit mine to increase economic returns; Terms of Agreement: initial cash consideration of US$1 million, payable in two instalments: US$500,000 on closing (targeted for May 31, 2022) and US$500,000 on receipt of post-closing regulatory approvals (expected in late 2022 or early 2023); KRL intends to work towards a Preliminary Economic Assessment ('PEA'), then a Feasibility Study. If KRL views the Project positively at each step, KRL to make further payments to HGEL of US$3 million and US$4 million respectively; KRL to pay HGEL a 1.5% net smelter royalty from future mine revenue; potential for Harmony to become a strategic investor in KRL under the Transaction, with HGEL to be issued warrants equal to 9.9% of the issued share capital of KRL on closing (with each warrant exercisable at C$0.28 per share or a 25% premium to the KRL 30-day VWAP to April 5, 2022).
Matthew Salthouse, CEO of KRL, commented: 'We are delighted to announce the acquisition of Kili Teke which aligns with our strategy of building shareholder returns by executing value accretive acquisitions. In this regard, our extensive due diligence indicates Kili Teke will be a transformative and accretive acquisition for KRL and will elevate our asset portfolio, adding an established gold copper resource which has potential for significant growth.'
'The Project lies on the highly prospective Papuan Fold Belt which hosts world class projects, such as Ok Tedi, Frieda River and Porgera. We look forward to exploring and developing another potential world class project for the region.'
'This transaction moves KRL from a greenfield high potential explorer into being a resource development company with upside. For a junior to achieve this after a year of listing is a testament to the team's vision on growing KRL via accretive transactions in combination with on-going field work.
HGEL has already made excellent progress to date in developing the Project, delineating an impressive copper gold resource of 800Kt copper and 1.8Moz gold; with the deposit remaining open to the southeast and down depth. Through the grant of warrants to acquire equity in KRL of up to 9.9%, HGEL has an option to engage further.'
'KRL will continue to deliver on our strategic objectives with Kili Teke a key catalyst in driving shareholder value as we develop as an Asia Pacific gold-copper mining company.'
Johannes van Heerden, CEO for Harmony South East Asia and senior executive for New Business at Harmony Gold Mining Company Limited commented: 'Harmony remains focused on permitting and delivering the much anticipated Wafi-Golpu project alongside its existing Hidden Valley mine life extension project. In addition to these on-going projects, Harmony has identified additional potential growth opportunities in and around the Hidden Valley mine. These multiple workstreams demonstrate our long-term commitment to Papua New Guinea, and will require significant investment and management resources over the next 5 years. We believe it makes strategic sense for the Kili Teke exploration project to continue with dedicated focus, allowing further value to be unlocked for all stakeholders in Papua New Guinea.'
About KRL
Kainantu Resources 'KRL' is an Asia-Pacific focused gold mining company with three highly prospective gold-copper projects, KRL South, KRL North and the May River Project. All projects are located in premier mining regions in PNG.
Both KRL North and KRL South show potential to host high-grade epithermal and porphyry mineralisation, as seen elsewhere in the high-grade Kainantu Gold District. The May River project is in close proximity to the world-renowned Frieda River Copper-Gold Project, with historical drilling indicating the potential for significant copper-gold projects. KRL has a highly experienced board and management team with a proven track record of working together in the region and an established in-country partner.
Contact:
Matthew Salthouse
Tel: + 65 8318 8125
Email: info@krl.com.sg
Disclaimer and Forward-Looking Information
Mineralization hosted on adjacent and/or nearby properties is not necessarily indicative of mineralization hosted on the Company's property. The data disclosed in this release relating to drilling results is historical in nature. This release contains forward-looking statements, which relate to future events or future performance and reflect management's current expectations and assumptions. Such forward-looking statements reflect management's current beliefs and are based on assumptions made by and information currently available to the Company. All statements, other than statements of historical fact, are forward-looking statements or information.
Forward-looking statements or information in this news release relate to, among other things: expectations regarding completion of the Acquisition and the terms thereof, including timing, the results of Preliminary Economic Assessments and Feasibility Studies, further exploration activities or development programs on the Project, receipt of necessary regulatory approvals and the formulation of plans for drill testing; the effect of the Acquisition on KRL and its portfolio; further growth of the Project; timing of the renewal of EL 2310; the ability of the Company to raise financing; the description and viability of the Project; the preparation and filing of a NI 43-101 Technical Report and the ability of the Company to deliver on its strategic objectives and create shareholder value. These forward-looking statements and information reflect the Company's current views with respect to future events and are necessarily based upon a number of assumptions that, while considered reasonable by the Company, are inherently subject to significant operational, business, economic and regulatory uncertainties and contingencies. These assumptions include; success of the Company's projects; prices for gold remaining as estimated; currency exchange rates remaining as estimated; availability of funds for the Company's projects; capital, decommissioning and reclamation estimates; prices for energy inputs, labour, materials, supplies and services (including transportation); no labour-related disruptions; no unplanned delays or interruptions in scheduled construction and production; all necessary permits, licenses and regulatory approvals are received in a timely manner and the ability to comply with environmental, health and safety laws. The foregoing list of assumptions is not exhaustive. The Company cautions the reader that forward-looking statements and information involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements or information contained in this news release and the Company has made assumptions and estimates based on or related to many of these factors. Such factors include, without limitation: fluctuations in gold prices; fluctuations in prices for energy inputs, labour, materials, supplies and services (including transportation); fluctuations in currency markets (such as the Canadian dollar versus the U.S. dollar); operational risks and hazards inherent with the business of mineral exploration; inadequate insurance, or inability to obtain insurance, to cover these risks and hazards; our ability to obtain all necessary permits, licenses and regulatory approvals in a timely manner; changes in laws, regulations and government practices, including environmental, export and import laws and regulations; legal restrictions relating to mineral exploration; increased competition in the mining industry for equipment and qualified personnel; the availability of additional capital; title matters and the additional risks identified in our filings with Canadian securities regulators on SEDAR in Canada (available at www.sedar.com). Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described, or intended. Investors are cautioned against undue reliance on forward-looking statements or information. These forward-looking statements are made as of the date hereof and, except as required under applicable securities legislation, the Company does not assume any obligation to update or revise them to reflect new events or circumstances.
SOUTH PACIFIC METALS CORP. 
