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NovaDx, Sandstorm close Tennessee properties purchase
2013-01-02 08:09 ET - News Release
Also News Release (C-SND) Sandstorm Metals & Energy Ltd
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Mr. Daniel Roling of NovaDx reports
NOVADX AND SANDSTORM ACQUIRE ADDITIONAL REX COAL AND RELATED ASSETS IN TENNESSEE; MAXIMIZES PRODUCTIVITY AND FUTURE EXPANSION THROUGH SECOND MINE ENTRY ON REX COAL; POTENTIAL TO SIGNIFICANTLY INCREASE RESERVES, RESOURCES AND MINE LIFE; FACILITATES A QUICKER START-UP OF MINING OPERATIONS AT REX NO. 1 MINE
NovaDx Ventures Corp. and Sandstorm Metals & Energy Ltd. have completed the acquisition (previously announced on Oct. 16, 2012) of mine 12, the Turley rail load-out and the Smokey Junction preparation plant, located in Campbell and Scott counties, Tennessee. The Tennessee properties were acquired from Premium Coal Company National Coal LLC and Jacksboro Coal Company LLC for a purchase price of $8.5-million (U.S.).
The acquisition was completed through a newly incorporated company (U.S. Inc.) owned by Sandstorm. NovaDx will have full control over management and operation of U.S. and, subject to NovaDx completing financings for minimum proceeds of not less than $10-million, NovaDx will have a one-year option to acquire Sandstorm's interest in U.S. at cost. NovaDx will be responsible for the costs of any operations until the expiry of the option period. The purchase price was paid through a cash payment of $3-million (U.S.) contributed by Sandstorm, $2-million (U.S.) paid through the issuance of 4,377,675 common shares of Sandstorm and a five-year secured loan from National Coal to U.S. in the amount of $3.5-million (U.S.). The loan is secured by a first lien and security interest in the Smokey Junction preparation plant, payable in annual instalments of $700,000 (U.S.) in principal plus accrued interest at the prime rate quoted in the Wall Street Journal. U.S. may pay the outstanding principal balance plus accrued interest at any time prior to maturity without penalty. Sandstorm has the option to pay the outstanding principal balance plus accrued interest at any time through the issuance of Sandstorm common shares at the 10-day trading average prior to Sandstorm making such election. NovaDx has otherwise agreed to fund the repayment of the loan and in doing so will earn up to a 41.2-per-cent ownership interest in U.S. based on its and Sandstorm's relative contribution to the purchase price. By exercising the option and repaying the loan, NovaDx would gain a 100-per-cent interest in the Tennessee properties.
