Black Isle Res Corp New BLAIF

Settlement reached...

[jubbyjubber]

Black Isle Resources Corp.
408 – 837 West Hastings Street
Vancouver, B. C.
V6C 3N6
Tel: [phone]
Fax: [phone]
BLACK ISLE SETTLES ALL LITIGATION WITH REPUBLIC
Vancouver, British Columbia, March 10, 2010 – Black Isle Resources Corp. (“Black Isle” or “the
Company”) (TSX.V: BIT) (formerly known as Luzon Minerals Limited) is pleased to announce that
it has reached a settlement with Republic Gold Ltd. of Australia (“Republic”) to settle a long
running series of disputes which have previously been disclosed by the Company.
The disputes resulted in the filing of a number of legal proceedings and counterclaims as outlined
below, all of which have now been settled.
• In February 2008, Republic initiated an action in the Supreme Court of British Columbia
seeking judgment in the amount of AUD$1.93 million in connection with certain debts
purported to be owed by Black Isle to Republic.
• A second action was commenced by Republic in April 2008 in the Supreme Court of British
Columbia seeking judgment in the amount of AUD$385,000 in connection with certain
additional debts purported to be owed by Black Isle to Republic.
• A third action was commenced by John Peter Kelly (“Kelly”) in the Supreme Court of British
Columbia seeking judgment for US$60,000 in connection with certain debts purported to be
owed by Black Isle to Kelly.
The amounts in dispute have been accrued on the financial statements of Black Isle in the aggregate
amount of approximately $3,635,000.00 as at September 30, 2009.
The terms of the settlement include the following terms:
1. The settlement is subject to receipt of acceptance from the TSX Venture Exchange (the
“Exchange”) on or before April 30, 2010.
2. On receipt of approval from the Exchange, Black Isle has agreed to:
(a) issue to Republic and Kelly a total of 1,500,000 common shares of Black Isle (the
“Shares”) at deemed price of
.10 per share; and
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(b) issue to Republic a non-transferable share purchase warrant (the “Warrant”) that
will entitle Republic to purchase an additional 500,000 common shares of Black Isle
at a price of
.15 per share at any time within seven months from the date the
Shares are issued (the “Closing Date”). The terms of the Warrant will include the
restrictions on exercise set out below.
3. On the Closing Date:
(a) Black Isle, Republic and Kelly will enter into a lockup agreement which will provide
that Republic and Kelly may not trade the Shares or grant any interest in and to the
Shares to any other person for a period of one year following the Closing Date;
(b) Republic will grant an option to Donald MacDonald (“MacDonald”), the President of
Black Isle or his assignee, to purchase up to 500,000 of the Shares at a price of
.10
per share for a period of six months from the Closing Date; and
(c) Republic and Kelly (to the extent Kelly receives any portion of the Shares), will
execute a voting trust agreement in favour of MacDonald, or his replacement as
determined by the Board of Black Isle, allowing MacDonald or his replacement to
vote the Shares on behalf of present management for a period of one year from the
Closing Date.
4. The terms of the Warrant will provide that
(a) Republic shall not be entitled to exercise the Warrant if the exercise would result in
Republic and Kelly jointly owning in excess of 18.75% of the issued and outstanding
shares of Black Isle; and
(b) The term of the Warrant will be extended if, at any time during the seven month
exercise period of the Warrant, Black Isle issues a press release or files a price
reservation form disclosing the terms of a private placement or announces or enters
into an agreement that contemplates a transaction involving the issuance of shares
of Black Isle, other than a stock option agreement under its stock option plan, that is
approved by way of directors resolution and that private placement or other
transaction does not close during the initial exercise period.
5. Black Isle will execute a Consent to Judgment in the Kelly action in favour of Kelly in the
sum of Cdn$51,435.00 to be held in trust by his lawyers for one year from the Closing Date
and will be returned to Black Isle in the event the sum as determined by the conversion is
paid within one year from the Closing Date. If the judgment is not paid by that time, Kelly
will be entitled to submit the same for entry.
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The Company is pleased to have resolved these issues and looks forward to advancing the
reorganization of the Company for the benefit of shareholders. This objective has been of the focus
of management’s efforts for some time; however, with the economic conditions of the recent
months and these matters clouding the outlook this objective has been difficult to pursue.
ON BEHALF OF BLACK ISLE RESOURCES CORP.
"Donald L. MacDonald"
President and Chief Executive Officer
For further information contact Donald MacDonald at [phone] ext 6
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT
TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.