Post by
yixter on Mar 03, 2016 10:01am
Easy .10-.20 coming here!
Garrison Property Sale VANCOUVER, BRITISH COLUMBIA and TORONTO, ONTARIO--(Marketwire - May 16, 2011) - ValGold Resources Ltd. (TSX VENTURE:VAL) and Northern Gold Mining Inc. (TSX VENTURE:NGM) are pleased to announce that the companies have closed the sales agreement of the Garrison Gold Property located in north eastern Ontario. Under the terms of the sales agreement announced on April 7th 2011, Northern Gold has purchased ValGold's 100% interest in the Garrison property. TSX Venture approval of the transaction was granted on April 14, 2011. In consideration for this sale, ValGold received at the closing on Friday May 13th 2011: a cash payment of C$325,000 and a promissory note for an additional C$325,000 to be paid on or before August 13, 2011; 16 million common shares in Northern Gold ("Northern Gold Shares") giving ValGold aggregate ownership of approximately 14.8% of the issued and outstanding shares of Northern Gold on a non-diluted basis. a 2% net smelter return royalty of which (i) half (i.e. 1%) can be acquired by Northern Gold for C$5 million paid to ValGold at any time upon the earlier of thirty-six months following the date of closing and the commencement of commercial production, and (ii) the remaining 1% can be acquired for a further payment of C$10 million at any time upon the earlier of seventy-two months following the date of closing and the commencement of commercial production. For a period ending on the earlier of twenty-four months after closing or a change of control Northern Gold has a right to vote the Northern Gold Shares. In addition, Northern Gold has a right of first refusal to provide a buyer for any sale by ValGold in excess of 160,000 Northern Gold Shares in any calendar month. Under the terms of the original Garrison Option and Joint Venture Agreement, Northern Gold had the right to earn up to an undivided 80 percent interest in the Garrison Property. Northern Gold could acquire a 50 percent undivided interest in the property by making cash payments to ValGold of $1,000,000 over four years, with all or part of the payments being made in Northern Gold stock at Northern Gold's option. To earn the 50 percent interest Northern Gold was also required to complete work on the property in the amount of $4,000,000 over four years, with $500,000 to be spent on the property in the first year of the agreement and not less than $750,000 to be expended in each of the subsequent years. After earning the 50 percent interest, Northern Gold had the right to increase its interest to 80 percent by making additional cash payments of $1,000,000 over four years (again with all or part of the payments being made in Northern Gold stock at Northern Gold's option) and completing additional work on the property in the amount of $4,000,000 over four years. At the time of closing the buy-out of the Garrison Option and Joint Venture Agreement, Northern Gold was in the second year of the option agreement and had made $400,000 in payments ($200,000 in cash and the issuance of 2.2 million in shares in satisfaction of the other $200,000 payment obligation) and had incurred over $3,000,000 in exploration expenditures.