KELOWNA, BC, March 15, 2013 /CNW/ - Metalex Ventures Ltd. (TSXV : MTX) ("Metalex", the "Company") is pleased to announce the
signing of the earn-in agreement with Dundee Corporation ("Dundee")
wherein Dundee or its designate can earn up to a 51% interest in the U2
and T1 kimberlite pipes (the "Project") through a four stage investment
of up to CAD$51 million.
First Right - $5 million convertible loan
As per the letter agreement signed on January 15, 2012 Dundee advanced a
$5 million interest free loan to Metalex. The funds will be used for
preparatory work for the 10,000+ ton bulk sample.
Once the amount provided under the loan has been expended, Dundee will
be deemed to have earned a 5% interest in the Project ("First
Election"), which it shall have the option to convert into Metalex
shares at $0.90 per share.
Second Right - $12.5 million to earn a further 12.5% interest
If Dundee makes the First Election, it will be committed to invest a
minimum of a further $12.5 million (in addition to the $5 million
loan), commencing one month after receipt by Metalex of the final
permitting for the 10,000+ ton bulk sample. Should Dundee and Metalex
agree on a budget of greater than $12.5 million Dundee shall earn an
additional 1% interest for each $1 million spent over and above $12.5
million ($17.5 million inclusive of the $5 million loan). Once payment
is received, Dundee will hold a minimum of a 17.5% interest in the
Project and will have earned its Second Right and may undertake its
Third Right.
Third Right - Up to $22.5 million to earn a 40% interest
Under the Third Right investment, Dundee will make a further payment to
bring its total contribution to $40 million which will bring its
interest to 40%. During this phase, Dundee will incrementally earn a
1% interest in the Project for each $1 million spent.
Fourth Right - $11 million to earn a 51% interest
Upon the Fourth Right investment of an additional $11 million ($51
million total) Dundee will have earned a 51% interest in the Project.
These funds are to be used to complete a feasibility study on the
Project. If the feasibility study is positive, Dundee will use its
reasonable commercial efforts to secure funding for the development of
the mine to commercial production within four years. Metalex's and
Dundee's respective portions of mine development costs are to be repaid
from 80% of each of their respective shares of free cash flow from the
mine.
U2 Profile
The U2 kimberlite pipe is a highly prospective diamond development
project located in the James Bay Lowlands of Ontario, near De Beers'
Victor Mine. Diamonds recovered from the U2 pipe are of exceptional
quality - with 88.8% by weight of the +1.7mm diamonds being white and
1.1% being colored. The large size of the U2 pipe shows the potential
to host a substantial tonnage.
Currently the Project is awaiting two key permits which will allow the
construction of 60 kilometers of winter road from the Victor Mine site
across to the U2 project. Though the applications were submitted to
the Ministry of Natural Resources in Cochrane for these permits on
January 30, 2012 and March 26, 2012 the permits have yet to be
received. With the winter road season rapidly coming to an end it is
highly probable that the mobilization of the equipment and supplies
needed to conduct the program will only occur during the winter of
2013/2014.
The technical information and results reported here have been reviewed
by Mr. Chad Ulansky, P.Geol., a Qualified Person under National
Instrument 43-101, who is responsible for the technical content of this
release.
The agreement with Dundee remains subject to regulatory acceptance.
Signed,
Charles Fipke
Charles Fipke
Chairman
Forward Looking Statements
Some of the statements contained herein may be forward-looking
statements which involve known and unknown risks and uncertainties.
Without limitation, statements regarding potential mineralization and
resources, exploration results, and future plans and objectives of the
Company are forward looking statements that involve various risks. The
following are important factors that could cause the Company's actual
results to differ materially from those expressed or implied by such
forward looking statements: changes in the world wide price of mineral
commodities, general market conditions, risks inherent in mineral
exploration, risks associated with development, construction and mining
operations, the uncertainty of future profitability and the uncertainty
of access to additional capital. There can be no assurance that
forward-looking statements will prove to be accurate as actual results
and future events may differ materially from those anticipated in such
statements. Metalex undertakes no obligation to update such
forward-looking statements if circumstances or management's estimates
or opinions should change. The reader is cautioned not to place undue
reliance on such forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE: Metalex Ventures Ltd.
