VANCOUVER, April 13, 2015 /PRNewswire/ - Gold Bullion Development Corp. (TSXV: GBB) (OTCPINK: GBBFF) (the "Company" or "Gold Bullion") is pleased to announce that, further to the Company's press release of March 11, 2015, Gold Bullion and Takara Resources Inc. ("Takara") (TSX.V: TKK) have entered into a definitive purchase and sale agreement (the "Agreement") for Takara to acquire certain properties of Gold Bullion situated in Ontario, through the acquisition of Gold Bullion's wholly-owned subsidiary, Castle Silver Mines Inc. ("CSM")(the "Transaction"). CSM currently owns a 100% interest in the 3,300-hectare Castle Silver Mine property, a past producer located near the northern Ontario community of Gowganda and 85km northwest of the historic Cobalt silver mining camp.
Under the terms of the Agreement, Takara will acquire all of the issued and outstanding common shares of CSM from Gold Bullion in exchange for 10,000,000 units of Takara issued in equal stages of 2,500,000 units over a 4-year period (each unit consists of one common share in the capital of Takara and one common share purchase warrant exercisable at $0.10, expiring one year from the date of issuance of the units). Gold Bullion proposes, subject to regulatory and TSX Venture Exchange approval, to distribute the units to shareholders of Gold Bullion. In addition, Gold Bullion shall be entitled to have two nominees appointed to the board of directors of Takara.
Pursuant to existing agreements currently in place, (1) Gold Bullion will retain the right to earn a 1% NSR on all CSM properties, which NSR will be distributed to shareholders of Gold Bullion in the form of dividends, payable in cash; (2) 2% of all direct costs incurred on exploration on the Castle Silver Mine property is payable to the Matachewan First Nation; and (3) the Castle Silver Mine property is subject to a sliding scale royalty on silver production payable to a previous vendor, which will start from 3% when the price of silver is US$15 or lower per troy ounce and up to 5% when the price of silver is greater than US$30 per troy ounce and a 5% gross overriding royalty on the sale of products derived from the property with a minimum annual payment of $15,000 in the form of royalties on all future production from the property.
Pursuant to the terms of the Agreement, Takara intends to complete a non-brokered private placement of up to 6,000,000 units (each, a "PP Unit") at a price of $0.05 per PP Unit for aggregate gross proceeds of up to $300,000. Each PP Unit is proposed to consist of one common share in the capital of the Company (each, a "Common Share") and one Common Share purchase warrant (each, a "Warrant"). Each Warrant will be exercisable to acquire a Common Share at a price of $0.10 per Common Share for a period of two years from the date of issuance of the PP Units. The proceeds from the private placement are expected to be used for ongoing operations and working capital purposes.
Further, pursuant to the terms of the Agreement, Takara will settle approximately $40,000 of management fees owed to current officers of Takara through the issuance of Common Shares at a price of $0.05 per Common Share, subject to TSX Venture Exchange approval.
Completion of the Transaction is subject to all requisite regulatory approvals, including the TSX Venture Exchange approval.
About Gold Bullion Development Corp.
Gold Bullion Development Corp. is a TSX Venture-listed junior natural resource company focusing on the exploration and development of its Granada Property near Rouyn-Noranda, Québec, and its high-grade Castle Silver Mine in Gowganda, Ontario. Additional information on the Company's properties is available by visiting the website at www.GoldBullionDevelopmentCorp.com and on SEDAR.com.
"Frank J. Basa"
Frank J. Basa, P.Eng.
President and Chief Executive Officer
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.
SOURCE Gold Bullion Development Corp.