TomaGold to Acquire Chibougamau's West Block in Multi-Million Dollar Mining Deal

Chibougamau Independent Mines Inc. has finalized a major mining property transaction, granting TomaGold Corporation the right to acquire its West Block property in Québec through a definitive Option Agreement announced on August 11, 2023.

The West Block Transaction: Key Terms

The West Block comprises 99 claims across Barlow and McKenzie Townships and represents a significant asset transfer in the mining sector. To secure full ownership, TomaGold must fulfill a structured payment plan over five years:

Cash Obligations: TomaGold will contribute $2,650,000 in aggregate cash payments to Chibougamau, with an upfront payment of $300,000 upon agreement execution. This initial capital infusion reflects the parties’ commitment to moving the deal forward.

Share Issuance: Beyond cash, TomaGold commits to issuing 6 million shares immediately following the agreement date. Additional share issuances will follow annually over the five-year period, valued at $1,350,000 collectively and priced at the volume-weighted average trading price at each issuance date.

Operational Spending: TomaGold must invest $5,600,000 in direct exploration and development work on the West Block property, including a mandatory $600,000 expenditure in the first year alone. This spending requirement ensures active property development rather than dormant holdings.

Royalty Structure and Repurchase Rights

Chibougamau will retain a 2% Gross Metals Royalty (GMR) on all future production from the West Block. Notably, Globex Mining Enterprises Inc. (GMX-TSX) holds an equivalent 2% GMR on the same property. TomaGold has negotiated a buyout option, allowing the company to repurchase 0.5% of each royalty holder’s stake for a combined $1,500,000—$750,000 from each of Chibougamau and Globex.

The East Block: Parallel Negotiations

In a simultaneous development, Chibougamau and TomaGold entered a letter of intent (LOI) on the same date for a potential East Block acquisition. This property encompasses 127 claims spanning McKenzie, Obalski, Roy and Lemoine Townships.

The LOI grants TomaGold an exclusive 180-day window to conduct due diligence, during which Chibougamau cannot engage with competing buyers. For this exclusivity commitment, TomaGold pays Chibougamau $200,000 upfront.

Proposed Purchase Price: The indicative term sheet values the East Block transaction at $11 million total. TomaGold would pay $5 million upon definitive agreement signing, with the remaining $6 million distributed over two years. Additionally, TomaGold would issue 10 million common shares valued at $0.05 per share on the closing date.

Debt Security: The LOI provides that TomaGold will establish a first-ranking hypothec securing the cash purchase price—a mortgage-like instrument protecting Chibougamau’s payment claims.

Royalty Terms: Similar to the West Block, both Chibougamau and Globex will receive 2% GMR on East Block production, with TomaGold holding the option to buy back 0.5% of each royalty for $750,000 per tranche.

Regulatory Path Forward

TomaGold will require TSX Venture Exchange approval for the West Block Option Agreement, particularly regarding share issuances to Chibougamau. However, Chibougamau sidesteps similar approval requirements, as the West Block’s fair market value falls below 25% of the company’s total asset base and generated less than 25% of recent revenues.

The East Block transaction, should it materialize, will require regulatory approval and potentially shareholder consent. The letter of intent itself carries no binding legal force—it remains a non-binding expression of intent rather than a final contract.

Market Context

This dual-property strategy reflects TomaGold’s aggressive Québec expansion in the mining sector. The phased payment structure and performance milestones incentivize active exploration while protecting Chibougamau’s financial interests through substantial upfront and ongoing cash flows.

Forward-Looking Statement: This announcement contains forward-looking statements regarding property options and potential acquisitions. Actual outcomes may differ materially from stated expectations, with risks detailed in Chibougamau’s publicly available materials.

For further information, contact Jack Stoch, President & CEO at Chibougamau Independent Mines Inc., or visit www.chibougamaumines.com.