Otis Options Oakley Project to Centerra Gold

VANCOUVER, British Columbia, March 09, 2020 (GLOBE NEWSWIRE) -- Otis Gold Corp. (“Otis” or the “Company”) (TSX-V: OOO) (OTC: OGLDF) is pleased to announce that a definitive option agreement (the "Oakley Agreement") has been executed by Centerra Gold Inc. (“Centerra”) to earn up to a 70% interest in the Oakley Property (the “Oakley Project”) in exchange for total exploration expenditures of US$7,000,000 and cash payments to Otis of US$550,000 over a 6 year period.

Highlights

• Centerra can earn a 51% interest in Oakley (the “First Option”) by incurring US$4,500,000 in exploration expenditures and by making cash payments of US$250,000 over a three-year period as follows:
  • Cash payment of US$75,000 (received) on signing and commitment to spend a minimum of US$500,000 on exploration expenditures in Year One;
  • Cash payment of US$75,000 and US$1,500,000 in exploration expenditures in Year Two; and
  • Cash payment of US$100,000 and US$2,500,000 in exploration expenditures in Year Three.
• Centerra will then have an option to acquire a further 19% of the Oakley Project, for a total of 70% (the “Second Option”), by incurring an additional US$3,000,000 in exploration expenditures and making a cash payment of US$300,000 over three years.
• During the term of the Oakley Agreement, Centerra will be the Operator of the project. Otis will act as Project Manager and will be paid 10% of the approved exploration expenditures for technical oversight and project management. 
• Subsequent to either the First Option or the Second Option, at Centerra’s option, the parties shall form a joint venture and fund expenditures going forward on a pro rata basis.
• Should Otis’ interest fall below 10% during the joint venture, that interest will automatically convert to a 2% net smelter return royalty that is not subject to a buyback provision.

Craig Lindsay, President and CEO of Otis stated: “We are very pleased to announce this partnership with Centerra Gold. While our focus remains on the growth and development of our Kilgore Project, we are excited to partner with Centerra to move this project forward and realize further value on Oakley.  Furthermore, the committed expenditure in the first year of the option agreement will likely see a drill program undertaken at Oakley in 2020. Just as importantly, this transaction has the full support of Excellon Resources Inc, which is in the process of acquiring Otis.”