February 23, 2023 — Silk Road Energy Inc. (TSXV: SLK), doing business under the name Record Gold, reports that it is presently initiating an independent geological report on the Grenfell gold property which is subject to an option agreement held by a private company with which it is transacting.
Record Gold Corp is commencing a NI 43-101-compliant geological report on Grenfell, a gold property located near Kirkland Lake, Ontario, in order to meet TSX Venture Exchange policy conditions in regards to non-arms length asset sales. The report is expected to be ready for regulatory submission in two weeks.
As previously disclosed (Silk Road News Release, September 7, 2022), the non-arms-length transaction with Pelangio Exploration Inc pursuant to a conveyance agreement executed on August 23, 2022, is with Record Gold Corp (“Record Gold”), an Ontario-based private exploration company. The transaction is a “related party transaction” as defined under MI 61-101 as Michael C. Judson is CEO, director and shareholder of Silk Road and President, director and shareholder of Record Gold. David Johnson is Corporate Secretary, director and shareholder of Silk Road and Corporate Secretary and shareholder of Record Gold. Dr. Paul Craig is a director and shareholder of Silk Road and a shareholder of Record Gold.
Record Gold Corp has agreed to exchange its option agreement with Pelangio Exploration Inc. (PX.V) in return 40 million shares of Silk Road at a price of $0.05 per share. Following the transaction Silk Road will have 70,871,684 issued and outstanding shares.
The Grenfell transaction requires the approval of the company’s disinterested shareholders. This vote would follow the submission of the NI 43-101-compliant geological report to the TSX Venture Exchange and shareholders.
Silk Road did receive approval for a corporate name change by the majority vote of disinterested shareholders (non-conflicted, non-insiders) following the special mailing to shareholders concluded on December 21, 2022. Following approval from the TSX Venture Exchange, the company’s new name will be Record Resources Inc.
The Grenfell gold property is comprised of 38 mining cells and eight leased claims covering an area of approximately 6.7 square kilometres and is located 10 kilometers northwest of Agnico Eagle’s Macassa Mine in Kirkland Lake Ontario. Grenfell is also located five kilometres west of Record’s Kenogami East property (see August 10, 2022 news release)
Following the conveyance of the option agreement to Record, the option agreement with Pelangio will have the following terms:
Record Gold has the right to earn an undivided 80% interest in Grenfell by completing a total of $2,000,000 in work costs or exploration expenditures to be incurred within five years and by making one-time cash payment to Pelangio.
The work costs shall be completed in accordance with the following schedule: $250,000 must spent on the property twenty-four (24) months from the date of the signing of the Agreement; $500,000 on or before the third anniversary; $750,000 on or before the fourth anniversary; and, $500,000 on or before the fifth anniversary. In addition to the work costs associated with the earn-in agreement, Record Gold shall pay to Pelangio a one-time $60,000 payment in twenty-four (24) months.
In other news, the company reports closing the first tranche of its private placement of shares. The company has issued 795,580 common shares at a price of $0.05 per share and half of a common share warrant exercisable at $0.10 per share for two years. The first tranche of this private placement raised $39,779 in proceeds before broker compensation. The company paid a commission of $700 and issued broker warrants amounting to 14,000 in connection with the financing.
The company reports that, following this financing, it will have 70,871,684 shares outstanding (this includes 40 million following the Grenfell transaction). This financing and the Grenfell transaction are both subject to TSX Venture Exchange, regulatory and board approvals.
As previously disclosed (Silk Road News Release, September 7, 2022), below is selected assay data from historic drilling on Grenfell:
Qualified Person: Edward Procyshyn, P.Geo, a qualified person in accordance with National Instrument 43-101, has reviewed and approved the technical information contained in this news release.