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Kainantu Completes Acquisition for 100% Ownership of May River Project

Vancouver, B.C. – April 3, 2023 - Kainantu Resources Ltd. (TSX-V: KRL; FSE: 6J0) (“KRL” or the “Company”), the Asia-Pacific focussed gold mining company, is pleased to announce that it has agreed to terms for the acquisition (the “Acquisition”) of the remaining 90% interest in the May River Project (the "Project") from the Hardrock Limited (“Hardrock”) vendors.

Further to the announcement of February 15, 2023, KRL has completed negotiations with Hardrock on terms favourable to all parties under a Share Sale Agreement (the “Agreement”), whereby KRL will issue shares in consideration for acquiring 90% of the Project (the “Shares”).  KRL already holds the other 10% of the Project. 

Key Terms of the Agreement: 

Matthew Salthouse, CEO of KRL, commented:

“We are delighted to announce the full Project acquisition, which will result in the 100% ownership of this highly prospective copper-gold asset.  Our work to date and historical results from the Project have proven the value and confirm the Project’s potential.  We would like to thank the Hardrock vendors for their cooperation during our strategic partnership phase and welcome them as shareholders of the Company.”

Intrinsic Value of the Project

The Project is highly prospective for gold and copper, laying adjacent to the Frieda River Project (being one of the world’s largest undeveloped copper mines).  Since entering into an agreement with Hardrock in 2021, KRL has acted as manager and conducted further studies at the Mountain Gate and Skiraisa Prospects.  These studies have supported the Company’s view on the high potential of the overall Project.  Further details of the Project are contained in earlier announcements on June 15, 2021 and September 21, 2021 (in addition to the announcement noted above). 

In relation to the acquisition, the Company views the price of C$1,440,000 as representing fair value for the remaining 90% interest in Hardrock.  This values Hardrock at C$1,600,000 million with the overall size of the tenement package of 890 km², this equates to a price of C$1,798 per km².

By comparison, the acquisition of the Company’s KRL North and KRL South projects in 2020 (as part of the CPC listing onto the TSX-V) implied a price of C$6,347 per km².  This was supported by a review of comparable transactions at this time in PNG (Report Link).  No further comparable transactions have been identified since this time. 

Since the CPC listing, the price of copper has appreciated by approximately 16.5%, with current prices of $4.09 per pound.  Gold prices have also increased by approximately 7.7%, with current prices of $1,980 per ounce.  Given the price increases in both commodities, the Company believes the price per km² is well supported and reasonable for the Acquisition.

May River Copper-Gold Project Summary

Located less than 10km west of Frieda River, the May River asset has several highly prospective targets that KRL aims to explore in short term.  Key Project prospects (Skiraisa, Foya, Eserebe, Mountain Gate and Iku Hill) are situated along a 7km long N-NW trending structural corridor, exhibiting many attributes similar to the extended mineralised system identified at the Frieda River Project (between 10 and 15km to the east);

Soil, rock chip and channel anomalies indicate the existence of porphyry style Copper-Gold mineralisation in addition to near surface structurally controlled and breccia-hosted epithermal gold veins and breccias.  Previous drilling at the Skiraisa prospect has demonstrated significant gold potential: 54m at 1.83g/t Au; 109m at 1.53g/t Au and 96m at 0.89g/t Au. Copper-in-soil anomalies of >2.5% (2,500ppm) have been reported from several areas at the Mountain Gate prospect;

More information about May River project can be accessed here.

About Kainantu Resources (KRL)

Kainantu Resources (“KRL”) is an Asia-Pacific focussed gold mining company with three highly prospective gold and 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 mineralization, 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.  KRL recently executed an agreement to acquire the Kili Teke project in the western highlands of PNG.

Kainantu Resources

Matthew Salthouse, Chief Executive Officer (Tel: + 65 8318 8125)
Callum Jones, Corporate Development Co-ordinator (Tel: + 61 450 969 697)
Email: info@krl.com.sg

Investor Relations (Jemini Capital)

Kevin Shum
Tel: +1 212 219 4670 (702)
Email: kevin@jeminicapital.com

Disclaimer and Forward-Looking Information

Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.  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. Neither the Company nor a qualified person has yet verified this data and therefore investors should not place undue reliance on such data, and no representation or warranty, express or implied, is made by the Company, its affiliated companies, or any other person as to its fairness, accuracy, completeness, or correctness. 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: formulation of plans for drill testing; and the success related to any future exploration or development programs. 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.

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