NEWSDuncan Park Enters Into Dome Property Option Agreement WithSphere Resources Inc.
8:20 AM ET, March 9, 2010
TORONTO, ONTARIO, Mar 09, 2010 (MARKETWIRE via COMTEX) -- Duncan ParkHoldings Corporation (DPH.H)(the "Company" or "Duncan Park") announces today that it has entered into anoption agreement (the "Option Agreement") with Sphere Resources Inc. SPH.H ("Sphere") with respect to 13 unpatented miningclaims covering 34 units in the Dome, Byshe and Hyeson Townships in Ontario'sRed Lake Gold District (the "Property").
Under the terms of the Option Agreement, which supersedes the previouslyannounced letter of intent entered into by the parties, Duncan Park would joinSphere in exploring the Property, which has been optioned by Sphere from GlobalMinerals Limited ("Global") by an agreement pursuant to which Sphere may acquirean undivided 75% interest in Global's right, title and interest in the Property(the "Global Agreement").
Sphere has granted Duncan Park the option to acquire its option to acquirethe 75% interest in the Property, subject to a 2% net smelter royalty ("NSR")held by the original property owners, one percent of which may be acquired for$1,750,000 and one percent of which is subject to a right of first refusal infavour of Sphere and Duncan Park; satisfaction of the terms of the GlobalAgreement, which are essentially the making of the payments and incurring theexploration expenses set out below and the issue to Global by Sphere of 500,000shares of Sphere each year for three years; and Sphere's right to claw back fromDuncan Park a 51% undivided interest in the Property by paying Duncan Park anamount equal to four times Duncan Park's expenditures on the Property, whichright may be exercised by Sphere within 30 days following the earn-in date. Inaddition, if Sphere, or failing it, Duncan Park, activates its option, Globalhas the right to require Sphere or Duncan Park, as the case may be, to acquireits 25% undivided interest in the Property in exchange for a 3% NSR, which NSRmay be acquired by the issue of 3,000,000 Sphere shares or 1,500,000 Duncan Parkshares.
For Duncan Park to acquire Sphere's option to acquire a 75% interest in theProperty, Duncan Park must make cash payments of $25,000 per year to Global,issue to Sphere two million Duncan Park shares per year for three years, andmake staged exploration expenditures of $75,000 in year one, $350,000 in yeartwo and $500,000 in year three. Duncan Park retains the right to accelerate thecash payments and share issuances and Duncan Park may abandon the project afteryear two with no residual interest, further spending requirements or obligationto issue Sphere the third instalment of Duncan Park shares.
The Option Agreement contemplates that Sphere will act as operator of theProperty during the option period with Duncan Park having the right to approveall work plans and budgets. It also contemplates that shortly after the earn-indate the continuing parties will enter into a joint venture agreement to carryon the exploration.
The proposed transaction remains subject to, among other things, completionof satisfactory due diligence by Duncan Park, receipt of all requisiteregulatory and other approvals, including stock exchange approvals which mayrequire the delivery of an updated National Instrument 43-101 report.