MegumaGold Continues to Expand Land Position on Moose River Anticline - Seite 2

Figure 2 is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/9345d98e-e8f3-4931 ...

MegumaGold President Theo Van der Linde stated: "We’re very pleased to come to this agreement with Genius. The Moose River anticline is a very long anticlinal trend that hosts multiple gold deposits in its eastern and central areas, which has seen very little exploration work in the west. The acquisition of this group of licenses is great real estate for MegumaGold since a large, recently defined arsenic and gold anomaly on the Company’s adjoining Touquoy West property trends directly onto the newly acquired Genius claims.”  

Terms of the Agreement

Under the terms of the agreement the Company may earn up to a 70% interest in 6 Genius mineral exploration licences by satisfying the following conditions:

• MegumaGold shall issue to the Genius within ten (10) business days from the Effective Date, an aggregate of 250,000 common shares in the capital of the Company (the “Consideration Shares”). The Consideration Shares are subject to a statutory four (4) months and one (1) day hold period. In addition to the statutory hold period, 50% of the Consideration Shares are subject to a contractual one (1) year hold period.
   
• Initial 49.9% Earn-In: In order to earn the initial 49.9% interest in the Property, MegumaGold shall, within 18 months from the Effective Date, incur initial exploration work on the Property relating to an initial exploration program made up of ground surveys to pre-drilling targeting work, totalling at least $100,000 (“Phase I Program”).
   
• Additional 20.1% Earn-In: In order to earn an additional 20.1% interest in the Property, MegumaGold shall, within 12 months from the latest date of which the Company satisfies its Initial Earn-In obligations set out above, incur or cause to be incurred, a diamond drilling program on the Property, totalling at least $150,000 (“Phase II Program”).
   
• Upon MegumaGold fully exercising the Option in its entirety to earn 70% of the Property, Genius shall have the option to convert its remaining 30% interest in the Property, into a 2% net smelter royalty (“NSR”), resulting in MegumaGold owning a 100% interest in the Property, and Genius owning a 2% NSR on the Property. The terms of the NSR shall be defined under standard industry terms and shall be set out in a net smelter royalty agreement to be negotiated between Genius and MegumaGold, which shall include, among other things, a term whereby Meguma will have an option to acquire 50% of the 2% NSR for $1.0 million, leaving Genius with a 1.0% NSR.

Review and Qualified Person