Los Angeles, California, December 15, 2020 – OTC PR WIRE – Brookmount Explorations, Inc. (OTC US: BMXI) (“Brookmount”), a Nevada incorporated company with a global gold production and development platform, is pleased to announce that it has entered into a Memorandum of Understanding (“MoU”) to acquire an Australian incorporated company, Wellington Mining & Exploration Pty. Ltd. (“Wellington”), together with mining and exploration permits within the Palmer River Gold Field situated in the Cape York Peninsular region of North Queensland for a total consideration of US$2.8 million in cash. Total area covered by the exploration and production permits is approximately 11,500 hectares of alluvial gold resource and the acquisition includes full extraction and processing infrastructure, including excavators, haulage vehicles, a trommel based gold separation facility, worker accommodation and power generation facilities. (“the Transaction”).
The tenement, (named as “Dog Leg Creek”), lies within the Palmer River Gold Field, a vast area of Cape York which contains rich tertiary gravels, deposited in ancient riverbeds and lakes which developed, over millennia, into numerous water courses containing alluvial “hosted” gold. The area was originally surveyed by Dominion Mining Ltd, an Australian listed company, in the early 1980’s with comprehensive trenching analysis yielding an average grade of 1.2 grams of gold per cubic meter of material. The Palmer basin gold is nearly pure, with an average purity of 98%, however in view of low gold prices through the 1980’s, together with the remote location and lack of adequate roads in the area, Dominion and other Australian gold miners did not pursue their tenements and they were subsequently acquired by Wellington who, in addition to the processing and accommodation facilities, have constructed a heavy-duty access road, eliminating any site access issues. Utilizing estimates of total area and depth of watercourses in Dog Leg Creek, together with average ore grades identified and a gold purity of 98%, total estimated value of remaining gold in Dog Leg Creek is just over US$100 million.
The Transaction will take the form of a purchase for US$2.8 million in cash, whereby Brookmount will acquire 100% of the shares of Wellington, together with in situ assets as described above. As part of the Transaction, Kevin Wood, a highly experienced Australian mining executive, who has been closely involved in developing and surveying the Dog Leg project, will be appointed as project General Manager with responsibilities including restarting production operations at the conclusion of the rainy season in March.
In anticipation of the Transaction, Brookmount has secured a US$500,000 fixed rate convertible funding facility, proceeds of which will be utilized, inter alia, in financing the US$350,000 in costs required to restart production. The funding has been made available by Leonite Capital LLC, a New York based investment firm. The Company is also in the process of securing the funds necessary to close the Transaction which is expected by the end of January.
In announcing the Transaction, Brett Morley, CEO of Brookmount commented as follows: “I am very pleased to report that our strategy of building a portfolio of high-quality gold assets in Australia, which we first foreshadowed several month ago is now being realized. Our objective, to complement our producing and profitable operations in Indonesia with high quality, recoverable gold reserves in Australia, will both enhance our shareholders geographic risk profile and strengthen the Company’s balance sheet in preparation for transition of our listing to a senior exchange. We are truly fortunate to have the opportunity, on this occasion, to not only acquire gold reserve, but also a producing facility which can be brought on stream shortly after closing. With an existing material throughput capacity of 70 tonnes per day and given average material ore grades, over 5,000 oz of gold per year can be generated, with a current market value of approximately US$10mm. We are also fortunate that the continued success of our Indonesian operations gives us great flexibility and enhanced resources to execute our expansion in Australia.
We believe that the addition of the highly experienced Kevin Wood to our management group is a reflection of his belief and commitment to the project and we look forward to closing this Transaction together and taking Brookmount forward in building on this promising start to our Australian expansion.”
Brookmount currently conducts its gold mining and processing operations through its Indonesian subsidiary incorporated in Sulawesi Province, Republic of Indonesia, one of Asia most dynamic and rapidly expanding economies with extensive reserves of natural resources and minerals including timber, coal, gold and hydrocarbons. The Company has also established an office in Melbourne, Australia and is actively expanding its presence in what is one of the worlds leading gold producers.
Safe Harbor Statements:
Except for the historical information contained herein, certain of the matters discussed in this communication constitute “forward-looking statements” within the meaning of the Securities Litigation Reform Act of 1995. Words such as “may,” “might,” “will,” “should,” “could,” “anticipate,” “estimate,” “expect,” “predict,” “project,” “future,” “potential,” “intend,” “seek to,” “plan,” “assume,” “believe,” “target,” “forecast,” “goal,” “objective,” “continue” or the negative of such terms or other variations thereof and words and terms of similar substance used in connection with any discussion of future plans, actions, or events identify forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding benefits of the proposed license, expected synergies, anticipated future financial and operating performance and results, including estimates of growth. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this communication. For example, the expected timing and likelihood of completion of the pending transaction, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the pending transaction that could reduce anticipated benefits or cause the parties to abandon the transaction, the ability to successfully integrate the businesses, the occurrence of any event, change or other circumstance that could give rise to the termination of the negotiations, the risk that the parties may not be able to satisfy the conditions to the proposed transaction in a timely manner or at all, risks related to disruption of management time from ongoing business operations due to the proposed transaction, the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of Brookmount’s common stock. All such factors are difficult to predict and are beyond our control. We disclaim and do not undertake any obligation to update or revise any forward-looking statement in this report, except as required by applicable law or regulations. Additionally, in order to close the transaction as outlined, the Company will need to secure additional debt or equity financing to meet the funding requirements arising from the proposed purchase.