Again, we don't know where this is, but ICN seems to like "historic mining districts"...
Numerous companies explored the area from the 1970's until early 1991, when low silver prices brought exploration in the district to a close. Detailed historic data has not yet been acquired by the Company; however, some summary information is available. Over 200 historic drill holes established non National Instrument 43-101 compliant resources that were apparently deemed uneconomic at that time. As best as can be determined by the Company at present, all claims and other lands in the district were abandoned in 1996. ICN will endeavor to acquire more detailed historic data as well as evaluate additional land acquisition as it pursues this new opportunity.
As mentioned, the reason for keeping party and location under wraps. I suppose it won't be too difficult to figure out where the area is via Google search.
Carl Hering, President and CEO of ICN Resources, commented that, "ICN believes this to be a great new opportunity in a historic silver camp that has been ignored for some time. However, we have much work to complete, including searching for past data to fully evaluate the significance of the districts potential."
Pursuant to the terms of the Letter Agreement in order for the Company to exercise the Option and to acquire a 100% undivided interest in the Property the Company must make share and cash payments to the Vendor totaling 2,000,000 common shares (the "Common Shares") in the capital of ICN and $2,000,000 in cash payable as follows:
- upon approval by the TSX Venture Exchange (the "TSX-V") of the Letter (the "Approval Date") a payment of 150,000 common shares in the capital of ICN (the "Common Shares");
- on or before the six (6) month anniversary of the Approval Date the issuance of a further 100,000 Common Shares and a cash payment of $30,000;
- on or before the one year anniversary of the Approval Date the issuance of a further 250,000 Common Shares and a further cash payment of $50,000;
- on or before the two (2) year anniversary of the Approval Date a further 250,000 Common Shares and a further cash payment of $100,000;
- on or before the three (3) year anniversary of the Approval Date a further 250,000 Common Shares and a further cash payment of $120,000;
- on or before the four (4) year anniversary of the Approval Date a further 500,000 Common Shares and a further cash payment of $200,000;
- on or before the five (5) year anniversary of the Approval Date a further 500,000 Common Shares and a further cash payment of $250,000; and
- on or before the six (6) year anniversary of the Approval Date a further cash payment of $1,250,000.
$80,000 in cash in the next year, along with 500,000 shares. Interesting that there is no work requirement in dollars in the deal... as far as the 2,000,000 shares goes, seems like a low amount vs. 50,750,000 outstanding, again difficult to gauge without knowing what is on the property...
In addition to the foregoing, under the Letter Agreement the Vendor is entitled to a bonus in connection with ICN achieving certain project milestones tied to (i) total National Instrument 43-101 M + I resources established, (ii) a positive scoping or pre-Feasibility study and (iii) project permitting status. If the foregoing facts are satisfied, ICN would then be required to pay the Vendor an additional 1,000,000 Common Shares and an additional US$1,000,000 to US$3,000,000 in cash depending on achieving various project milestones.
Now we are up to 3,000,000 shares and up to $5,000,000 in cash. And the entire company is worth less than $8,000,000 today? Nonsense, won't last.
Under the terms of the Letter Agreement the Vendor is also entitled to a net smelter returns royalty from the Property ranging from ½% to 2% depending on underlying status of additional property the Company acquires, if any, within a defined area of interest in the district. The Letter Agreement is subject to TSX Venture Exchange approval.
And an NSR.... hmmm , now that's possibly quite lucrative... the party and ICN must really think highly of this property... also the variable NSR % might imply that other property in the area already has existing NSR's on it?
In other developments, ICN announces that it has issued 750,000 units to Lode Star Gold Inc. ("Lode Star") for an option payment on Lode Star's Goldfield Bonanza Project, as per the TSX Venture Exchange approved Definitive Agreement announced in March 2011 (see ICN News Release of March 29, 2011). Each unit consists of one Common Share and one Common Share purchase warrant, with each warrant entitling the holder to purchase one additional Common Share for a period of two years at an exercise price of
.26. The warrants issued are subject to a statutory hold period expiring on April 15, 2012.
No big surprise here... deal with Lode Star is for 3,000,000 units. Each unit is 1 share and 1 warrant. Before today, 1,000,000 units had been issued, with half the warrants at 44 cents, the other half at 25 cents. Now an additional 750,000 units issued today, with the warrants at 26 cents. Confused as to where the 26 cent figure is coming from?... from the 3-29-11 news release: "Upon the signing of the Definitive Agreement, and approval thereof from the TSX Venture Exchange, ICN will pay Lode Star US$50,000 and issue Lode Star 500,000 units (each unit consisting of one ICN common share and one full share purchase warrant with each warrant entitling the holder to purchase one additional common share of ICN for a period of two years at an exercise price equal to 110% of the average closing market price of ICN's common shares over a five consecutive day period immediately prior to the date of share issuance)." Somehow the average price must have been 23.64 cents over the last five days --- seems too high. Now we have another conspiracy theory as to why ICN has been very disinterested in keeping the stock price up, Lode Star benefits by acquiring cheaper warrants - investors also can benefit right along with Lode Star if dry powder remains...
ICN also announces that it has entered into a Loan and Share Pledge Agreement with another TSX-V company. The Company has borrowed C$500,000, for up to six (6) months at a 10% interest rate, secured against its 400,000 Paramount Gold and Silver shares. This loan allows ICN flexibility in moving forward and planning, as it awaits the final drill results for its Phase II drill program at the Goldfield Bonanza Project in Nevada (described above).
Now this is impressive. ICN chooses to not only not sell it's PZG stake during tax loss season, but also chooses not to dilute it's stock while at it's yearly lows, unlike Premium Exploration recently. Easily could have issued 2,500,000 more shares for 20 cents each and raised about $500,000. Also, who's the company? It's not PZG, they are not on the Venture. More importantly, what's interesting is that they only are asking for $500,000, they certainly must have something up their sleeve for more money in Q1 2012 because $500,000 won't accomplish very much of a Phase 3 drilling program and also pay the day-to-day costs of the company... they must be thinking that they can monetize something in their portfolio soon.... R-PG JV? Trout Creek JV? AWA JV? Sell Hog Ranch? Sell those NSR's to Paramount on Sleeper? A new Goldfield Bonanza NSR? Which leads to the final phrase...
Complete assay results are expected in January.
Now let's think about this... is ICN, with a straight face, implying that no further assays are ready by now? That those 3 cores from Church, which were complete 67 days ago (10-13-11 news release), are not done yet? Very little chance now that they are NOT being double-assayed due to super high-grade. This is obviously a strategic decision to not release any more assays in 2011... probably a smart move, due to the thought that great news will only be met with tax loss selling (which ends this Friday 12-23-11, not 12-30-11 due to 26th and 27th being holidays in Canada and the T+3 rule)
Overall, 4 big things in this news release... the Silver acquisition... interesting and surprising, yes, but hard to analyze without knowing what ICN is getting... the Lode Star issuance of units... no surprise other than the timing, could help explain the lack of desire by ICN in releasing assay news, or updating their outdated presentation and website... third thing, not diluting nor selling PZG shares, instead using a $500,000 loan by a secret fellow Venture company, intriguing in a lot of ways, I will be on the prowl on SEDAR looking for footprints and breadcrumbs from the loaner... and fourth the sandbagging of the assays until January, this is obviously a strategic move, and IF they were bad wouldn't they would want to release them this week during tax loss selling season since if IF they were great the buy volume would be overwhelmed by the tax loss sell volume ???
Disclosure: Own 301,000 shares
Please do your own due diligence before investing.