Clifton Star Announces an Amended Option Agreement on the Duparquet Project
| 12 Sep 2012 08:40 ET |  |
Marketwire Canada
Clifton Star Resources Inc. ("Clifton" or "The Corporation") (TSX VENTURE:CFO)(FRANKFURT:C3T) is pleased to announce that, following negotiations with the owners of the Duparquet project properties, it has reached a new agreement in principle regarding the options to purchase the remaining shares in the companies that own these properties, in which Clifton already owns a 10% interest.
Under the previous agreement Clifton had option payments of $22M on December 1st, 2012, and $30M on December 1st, 2017, in order to acquire a 100% interest in the Beattie, Donchester and Dumico properties, comprising the Duparquet property.
The General Terms of the Amended Agreement are the following: Clifton will have to make Option payments of:
-- $2M on December 1st, 2012 and issue, to the owners, 250,000 shares of Clifton.-- $10M on December 1st, 2014-- $10M on December 1st, 2015-- $15M on December 1st, 2016-- $15.2M on December 1st, 2017
If Clifton purchases all of the above options, and it exercises the option for the final purchase of the shares, it will have made payments totaling $52M to $52.2M depending on the time at which the options are exercised by Clifton. Clifton will then own a 100% interest in the properties. Clifton may exercise any or all of the options in advance of its specified date.
Other provisions were successfully negotiated, including Force Majeure, Arbitration and Change of Control or Merger situations. The Amended Agreement is in the process of being formally ratified by the companies' shareholders.
Michel Bouchard, President and CEO said: "This new deal lifts the uncertainty regarding Clifton's ability to meet the upcoming December payment. The amended deal will enable Clifton to continue to invest in the exploration and development of the Duparquet project. The option payment schedule is now attuned to the project's planned development schedule. With working capital of $11 million, Clifton has the means to take the project to the next level with the start of the recently announced PEA Study, scheduled for completion at the end of 2012."
Clifton recently released additional 2012 drilling results, and currently has two drills working on the property. The previous resource estimate released in May 2012 did not include 2012 drill holes or 2012 trenching work results. These will be included in the resource upgrade that InnovExplo is preparing, which will be used in the upcoming PEA.
Duquesne Property:
Clifton has also reached an agreement to buy back a portion of the Duquesne Property royalty. Clifton owns a 100% interest in the property, subject to a 3% NSR royalty. Clifton will pay an amount of $1M to the owners of the royalty and will buy back a 0.5% NSR interest. The remaining royalty will now be a 2.5% NSR. Yearly portions of 0.5% NSR may be bought back at the same price, starting in 2014, if specific conditions are met at that time.