11 August 2015

International Goldfields is finalising due diligence for the acquisition of an 85% interest in Uruguay cannabis biosciences company Winter Garden Biosciences

This follows Winter Garden obtaining a range of key permits, licences and authorisations from the Uruguayan government and planting its initial hemp and cannabis crop.

This allows it to import any and all varieties of hemp and cannabis Fativa-L (heirloom varieties), with no restrictions on cultivars and tonnage.

Uruguay is the first nation in the world to fully legalise at the federal regulatory level the research & development, as well as cultivation, distribution, sale and consumption of non-synthetic cannabinoids and hemp.

Winter Garden has taken delivery of its first 1,000 kilograms of seed and commenced planting of its maiden crop and preparation for control work in greenhouses.

Initial planting has commenced over an initial 7 hectares.

It will now move to its commercial grow out and registration program with a significant number of negotiating parties who have been waiting for Winter Garden to commence its commercial agricultural and laboratory operations.

David Tasker, International Goldfields director, commented:

“Gaining the approval of all necessary licenses is a significant milestone for Winter Garden Biosciences.

“Uruguay is the first nation in the world to legalise the production and sale of non-synthetic cannabis products and Winter Garden has fully entrenched its first-mover advantage with the rapid submission and approval of these licenses.

“The approval by the Uruguayan government can also be seen as a strong commitment by local authorities to help develop new products and intellectual property in this fledgling industry.”

Julian Strauss, Winter Garden Biosciences President, added:

“This is an exciting time for Winter Garden. We are developing products which may offer substantial relief for serious conditions such as nausea, depression and posttraumatic stress disorder.

“Globally, this is a very under-researched area so there is significant health advancements and investment opportunities which can be made.”

Strategic License

The recently obtained licenses allow Winter Garden to scale up operations as part of its business plan and authorises Winter Garden:

 To harvest fibre, seeds and crops;

 To prepare the products extracted from the crop in the same area where the harvest was performed; and

 To extract oil within the facilities of the laboratory mentioned in the work plan.

First Planting

Winter Garden has taken delivery of its first 1,000 kilograms of seed and commenced the initial planting over an initial 7 hectares.

This underpins its business model moving forward, which can be significantly scaled in subsequent plantings.

Revenue will be derived from the harvesting and sales of base oils, seed extracts and fibre products.

The initial 7 hectare grow out program will move within 6 months to approximately 50 hectares following completion of IGS’ acquisition of Winter Garden.

Winter Garden has access to over 1,000 hectares of arable land which can rapidly be deployed as the company commences commercial operations.

It expects to generate returns of approximately US$550,000-600,000 per hectare.

Operations Update

Winter Garden’s laboratory building in Montevideo is now fully equipped with phytotrons and cell tissue research chambers, and is prepared to conduct first trials.

The facilities are located in the same complex as the Science Faculty of the National University of Uruguay, thus allowing the optimal synergies with respect to their cooperation agreement.

Uruguay’s laws facilitate the legal use and research cannabinoids containing a higher percentage of Tetrahydrocannabinol (THC).

This allows the company to proceed with industrial-scale research program following harvest of the initial crop and registration of valuable and unique species.

Analysis

Obtaining the permits and licenses required is a key milestone and step toward finalisation of due diligence for the Winter Garden acquisition by IGS. This is expected to be completed within a week.

It is also value accretive IGS and for the development of the Winter Garden business, as seen with first seeds planted for a maiden cannabis crop.

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