PINL:HLOSF - Post by User
Post by
ventureveston Apr 26, 2010 4:04pm
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Post# 17032438
HLO way undervalued
HLO way undervalued15. SUBSEQUENT EVENTS
(a) On December 22, 2009, the Company entered into an option and joint venture agreement with Hudson
Bay Mining and Smelting Co. Limited (“HudBay”), a subsidiary of HudBay Minerals Inc., on
certain claims (the “Cold and Lost Lakes Claims”) located in the Sherridon VMS Project area, under
which HudBay has the option to earn up to a 67.5% joint venture interest in the Cold and Lost Lake
Claims. HudBay can earn an initial 51% interest by making cash payments totalling $800,000
($250,000 received) and funding exploration programs totalling at least $1,350,000, on or before
December 22, 2011, as follows:
Date
Cash
Amounts
$
Expenditure
Commitments
$
December 22, 2009 250,000 -
December 22, 2010 150,000 350,000
December 22, 2011 400,000 1,000,000
800,000 1,350,000
Upon earning its 51% interest, HudBay can increase its interests, as follows:
i) an additional 9% interest by funding and completing a feasibility study and making a cash
payment of $2,000,000, all on or before December 22, 2012; and
ii) a further 7.5% interest by making a cash payment of $2,500,000 prior to commencement of
commercial production.
If a production decision is made, HudBay will finance the Company’s proportionate share of the
development costs and will be repaid from the Company’s proportionate share of revenues.
The option agreement also provides that the Company has the right to reacquire HudBay’s interests
earned, by partially reimbursing HudBay’s total expenditures or granting HudBay a 1% NSR if the
feasibility study and application for permitting are not complete by December 22, 2013.