InvestmentPitch Media Video Discusses Headwater Gold’s Four Separate Definitive and Earn-In Agreements with Newcrest Mining with Potential Exploration Expenditures of US$145 Million and Strategic Equity Investment

Rhea-AI Summary

Headwater Gold (OTCQB:HWAUF) has signed agreements with Newcrest Mining to explore four projects in Nevada and Oregon. Newcrest can acquire up to a 75% interest by investing US$145 million and completing Pre-Feasibility Studies, each requiring a minimum resource of 1.5 million gold equivalent ounces. A minimum commitment of US$8.5 million is stated, and Newcrest can earn a 65% stake by spending US$55 million on the Spring Peak Project and US$30 million on each of the others. Newcrest also plans to invest in a private placement, acquiring approximately 9.9% of Headwater.

Positive

• Newcrest Mining's investment is set at US$145 million, strengthening financial backing for multiple projects.
• Potential for significant resource discovery with a minimum requirement of 1.5 million gold equivalent ounces per project.
• Headwater retains upside while minimizing corporate dilution through project-specific funding.

Negative

• High dependency on Newcrest's expenditures could pose risks if funding is not fully realized.
• Newcrest's 75% stake diminishes Headwater's control over the projects.

VANCOUVER, British Columbia, Aug. 17, 2022 (GLOBE NEWSWIRE) -- Headwater Gold (CSE:HWG) (OTCQB:HWAUF) has signed four separate definitive and earn-in agreements with a wholly owned subsidiary of Newcrest Mining Limited. Newcrest will have an option to acquire up to a 75% interest individually in each of Headwater’s Agate Point, Midas North and Spring Peak Projects in Nevada, and its Mahogany Project in Oregon for cumulative exploration expenditures of US$145 million and the completion of Pre-Feasibility Studies, which include a minimum resource of 1.5 million gold or gold equivalent ounces per Project.

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Newcrest will fund a firm minimum commitment of US$8,500,000 in exploration expenditures cumulatively between the four Projects or pay the difference to Headwater.

During the staged earn-in phase, Newcrest will have the right to earn up to a 65% interest individually in each of the four Projects by sole funding exploration expenditures, inclusive of the respective Minimum Commitment, of US$55,000,000 on the Spring Peak Project, US$30,000,000 on the Agate Point Project, US$30,000,000 on the Mahogany Project, and US$30,000,000 on the Midas North Project over a 6-year period.

Newcrest can earn an additional 10% interest in each Project, bringing the total to 75% by ceding a 2% NSR to Headwater in the case of the Agate Point, Mahogany and Midas North Projects, and a 1% NSR in the case of the Spring Peak Project, subject to certain buydown rights, along with completing a Pre-Feasibility Study for each Project.

Caleb Stroup, Headwater’s President and CEO, stated: “We are extremely pleased to welcome Newcrest as a funding partner and shareholder. This transaction provides a very attractive mechanism to maintain our aggressive, discovery-focused exploration strategy across our high-quality project portfolio. The proceeds of the transaction will allow Headwater to continue self-funding our highest-priority 100% owned opportunities, while Newcrest’s project-specific funding will allow for rapid advancement of several projects which require a scale of exploration expenditure and drilling currently impractical for Headwater. Our potential carried Project interests to the completion of Pre-Feasibility Studies and back-end royalties ensure that shareholders retain significant upside on these Projects with minimum corporate dilution. We believe this transaction underscores the ability of the Headwater team to execute our business model and build significant accretive value through early-stage exploration. We look forward to working with Newcrest and will continue to develop and execute on additional priority opportunities outside of the four earn-ins.”

Newcrest Mining is one of the world’s largest gold mining companies with headquarters in Australia and operating mines in Australia, Canada, and Papau New Guinea.

Fraser MacCorquodale, Newcrest’s GM Exploration, added: “We are excited to partner with Headwater on these projects. The Great Basin is a great location for discovering high grade gold epithermal deposits. We are also pleased to partner with an experienced and technically strong management team at Headwater and leveraging the exploration capability of both teams represents an opportunity to create significant value.”

Within 15 days of signing the earn-in agreements, Newcrest will reimburse Headwater for US$613,000 in previously incurred expenses. Newcrest will also take down a non-brokered private placement of 5,446,397 shares, priced at $0.16 per share, a premium of 23% to the closing price of $0.13 on August 12th, giving Newcrest approximately 9.9% of Headwater on a non-diluted basis. Headwater plans to use the approximately $871,000 for potential project acquisitions, ongoing exploration activities on its other 100% owned properties in Idaho, Nevada and Oregon, and for general working capital.

The shares are currently up more than 40% on the day and are trading at $0.20. For more information, please refer to today’s new release or visit the company’s website www.HeadWaterGold.com, contact Caleb Stroup, President and CEO, at 775-409-3197 or by email at CStroup@HeadWaterGold.com.

For investor relations, contact Brennan Zerb, Investor Relations Manager, at 778-867-5016 or by email at BZerb@HeadWaterGold.com.

Disclaimer

The information in this InvestmentPitch Media Ltd video is for the viewers information only. Headwater Gold has paid a fee not exceeding $2,000 in cash to have its current news release produced in video format. The corporate information is based on information that is publicly available. Any information provided by InvestmentPitch Media Ltd., through its media services is not to be construed as a recommendation or suggestion or offer to buy or sell securities but is provided solely as an informational media service. InvestmentPitch Media Ltd makes no warranties or undertakings as to the accuracy or completeness of this information. All due diligence should be done by the viewer or their financial advisor. Investing in securities is speculative and carries risk.

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FAQ

What is the recent agreement between Headwater Gold and Newcrest Mining regarding HWAUF?

Headwater Gold signed agreements with Newcrest Mining for exploring four projects, allowing Newcrest to acquire up to a 75% interest by investing US$145 million.

What is the financial commitment of Newcrest Mining in the Headwater Gold projects?

Newcrest Mining has a firm minimum commitment of US$8.5 million in exploration expenditures for the four projects.

How will Newcrest Mining acquire its stake in Headwater Gold?

Newcrest can earn up to a 75% interest by funding exploration activities and completing Pre-Feasibility Studies.

What percentage of Headwater Gold will Newcrest own after the private placement?

Newcrest will acquire approximately 9.9% of Headwater Gold following the private placement.

What are the implications of the Newcrest deal for Headwater Gold shareholders?

The deal allows for significant resource exploration without heavy corporate dilution, but it may reduce Headwater's influence on project decisions.