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Oct. 17, 2019, 11:15 a.m. EDT

Regency Gold Executes Agreement with Benton on the Thunder Bay North and Escape Lake Platinum Group Metal Properties and Change of Business

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Vancouver, British Columbia--(Newsfile Corp. - October 17, 2019) - Regency Gold Corp. /zigman2/quotes/210004492/delayed CA:RAU.H 0.00% (" Regency " or the " Company ") is pleased to announce that it has signed an arm's-length non-binding letter of intent () LOI ") dated October 11, 2019, with Benton Resources Inc. () Benton ") /zigman2/quotes/201342203/delayed CA:BEX -10.00% which sets out a proposed transaction pursuant to which Benton will grant Regency an option (the " Option ") to acquire Benton's rights to acquire, under its pre-existing agreements with Rio Tinto Exploration (Canada) Inc. (" RTEC ") () RTEC Agreement ") and Panoramic Resources Inc. () PAN ")() Pan Agreement "), a 100% right, title and interest in the Escape Lake Property () Escape Lake Property" ) and the Thunder Bay North Project (the " TBN Project "), respectively.

The TBN Project is located approximately 50km northeast of Thunder Bay within the Thunder Bay Mining Division in north-west Ontario, Canada, in the northern part of the Proterozoic Midcontinental Rift region, an important emerging Ni-Cu-PGM province. The TBN Project consists of 219 unpatented mining claims (2,551 claim units of 16 hectares) covering approximately 40,816 hectares. The 220 hectare Escape Lake Property is located within the TBN Project claim block and along the interpreted conduit system which contains/controls the Pt-Pd-Base Metal mineralization on the TBN Project. RTEC staked the Escape Lake block in 2006 and performed successive rounds of limited diamond drilling between 2010 and 2012.

Proposed Transaction

Under the terms of the LOI, Regency may exercise the Option by completing the following:

  • Issuing to Benton an aggregate of 24,615,384 common shares (the " Regency Shares ") in the capital of Regency;

  • Fulfilling the remaining terms of the RTEC Agreement that Benton has with RTEC on the Escape Lake Property;

  • Fulfilling the remaining terms of the Pan Agreement that Benton has with Pan on the TBN Project; and

  • Issuing to Benton a 0.5% net smelter return royalty from production on the Escape Lake property and a 0.5% net smelter return royalty from production on any mineral claims comprising the TBN Project that a net smelter royalty has not previously been granted.

Under the RTEC Agreement, Benton was granted the option to acquire a 100% ownership interest in Escape Lake Property, subject to a 1% net smelter return royalty to be retained by RTEC, in exchange for payment of $6 million by Benton to RTEC over a three-year period, as follows:

  • C$3 million due on signing, immediately following receipt of regulatory approval (this amount has been paid by Benton);

  • C$1 million on the first anniversary of the signing of the RTEC Agreement;

  • C$1 million on the second anniversary of the signing of the RTEC Agreement; and

  • C$1 million on the third anniversary of the signing of the RTEC Agreement.

Under the Pan Agreement, Benton was granted the right to acquire a 100% ownership interest in a subsidiary of Pan that holds the TBN Project, in exchange for payment of $9 million by Benton to Pan over a three-year period, as follows:

  • C$4.5 million due on closing of the acquisition of the TBN Project;

  • C$1.5 million on the first anniversary of the closing of the acquisition of the TBN Project;

  • C$1.5 million on the second anniversary of the closing of the acquisition of the TBN Project; and

  • C$1.5 million on the third anniversary of the closing of the acquisition of the TBN Project.

Benton has the right to make an initial payment of $250,000 (which will be credited to the purchase price) by November 3, 2019, which extends the proposed closing of the acquisition, and the initial payment of $4.5 million, by 60 days. In addition, Benton has the ability to get three additional 30-day extensions by making a $10,000 payment for each extension.

The Regency Shares to be issued will be subject to a four-month and one day "hold period" from the date of closing of the transaction and may be subject to the escrow requirements of the TSX Venture Exchange (the " TSXV "). Upon completion of the LOI, Regency will assume, be bound by and perform the obligations of Benton under the RTEC Agreement. Benton and Regency shall each have a due diligence period commencing upon the execution of the LOI and expiring 15 days thereafter. Following execution of the LOI, and subject to finalization of the terms of the transaction contemplated by the LOI, Regency will prepare and submit to Benton a definitive agreement.

Highlights

  • High-grade, near-surface Platinum Group Metals (PGM) deposits with a historical resource.

  • Excellent infrastructure, with a paved highway and established logging roads.

  • Drilling highlights on the 30,000 hectare Thunder Bay North (" TBN ") Property include historic high-grade intercepts of 46.65 m @ 10.1 g/t Platinum+Palladium+Gold (5.267g/t Pt + 4.555g/t Pd + 0.324g/t Au) with 1.62% Copper+Nickel (1.154% Cu + 0.465% Ni), incl. 13.0 m @ 33.2 g/t Pt+Pd+Au (17.305g/t Pt + 14.817g/t Pd + 1.061g/t Au) and 4.91% Cu+Ni (3.755% Cu + 1.308g/t Ni), incl. a spectacular intercept of 2.6 m @ 97.9 g/t Pt+Pd+Au (52.769g/t Pt + 41.538g/t Pd + 3.630g/t Au) and 14.9% Cu+Ni (11.599% Cu + 3.289% Ni) in drill hole BL 10-197.

  • Drilling highlights on the 220 hectare Escape Lake Property include 121.6 m @ 2.49 g/t Pt+Pd+Au (1.04g/t Pt + 1.37g/t Pd + 0.07g/t Au) and 0.86% Cu+Ni (0.52% Cu + 0.34% Ni), incl. 33.4 m of 7.28 g/t Pt+Pd+Au (3.01g/t Pt + 4.08g/t Pd + 0.19g/t Au) and 2.26% Cu+Ni (1.49% Cu + 0.77% Ni) in drill hole 12CL0009, and 162 m @ 1.42 g/t Pt+Pd+Au (0.61g/t Pt + 0.76g/t Pd + 0.06g/t Au) and 0.47% Cu+Ni (0.28% Cu + 0.19% Ni), incl. 40.67 m 4.5 g/t Pt+Pd+Au (1.92g/t Pt + 2.48g/t Pd + 0.18g/t Au) and 1.26% Cu+Ni (0.89% Cu + 0.36% Ni) in drill hole 11CL0005.

Thunder Bay North Project

The TBN Project contains the Current, Bridge and Beaver zones of which the following Historical Estimates* are defined:

/zigman2/quotes/210004492/delayed
CA : Canada: TSX Venture
$ 0.13
0.00 0.00%
Volume: 0.00
Oct. 11, 2019 1:45p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$3.57 million
Rev. per Employee
N/A
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/zigman2/quotes/201342203/delayed
CA : Canada: TSX Venture
$ 0.05
-0.0050 -10.00%
Volume: 30,000
Dec. 13, 2019 10:48a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$3.79 million
Rev. per Employee
N/A
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