Vancouver, BC / ACCESSWIRE / October
21, 2014 / Far Resources Ltd. (CSE:FAT) ("Far" or "the Company")
has entered
into an option agreement effective as of October 17, 2014 (the "Option Agreement") with Redline
Minerals Inc. ("Redline"), Redline
Mining Corporation ("RMC"),
and Southwest Land & Exploration Inc. ("SWLE") (collectively, the "Optionors") to acquire up to an 80% interest in and to 105
unpatented and 2 patented mineral claims located in Sierra County, New Mexico,
U.S.A. known as the LG/Ivan and Little Granite unpatented mineral claims and
the Ivanhoe/Emporia patented mineral claims (collectively the "Property").
The Option Agreement supersedes
and replaces the binding letter of intent between the Company and Redline announced
on November 5, 2013 and sets out the terms under which Far can acquire an
initial 50% interest in the Property (the "Initial
Option") and further sets out how the Company can earn up to an additional
30% interest in the Property (the "Additional
Option") from the Optionors.
To date, the
Company has completed an initial site visit to the
Property as announced on March 17, 2014 and made cash payments to Redline
totaling $66,250. In order to exercise the Initial Option, the
Company must (1) make further cash
payments of $13,750 on November 15, 2014 and $15,000 on January 15, 2015 (or 300,000
common shares at a deemed price of $0.05 per share in lieu thereof) and (2)
make additional cash payments totaling $240,000, payable at $80,000 per year,
which the Optionors must use to keep the properties in good standing, issue a
total of 2,500,000 common shares of the Company to the Optionors with the first
tranche of 500,000 common shares due on closing and the remaining shares due in
four equal instalments of 500,000 shares each on the anniversary dates of the
Option Agreement, and incur exploration expenses of $1,000,000 over a period of
four years with $200,000 to be spent the first and second years, respectively,
and $300,000 in each subsequent year.
Upon exercise of the Initial Option, the
Company will have the further option, exercisable for a period of 90 days, to
acquire up to an additional 30% interest in the Property (the "Additional Option"), in increments
of 10% per annum, by paying an additional $80,000 per year to cover ongoing assessment/recording
fees, taxes and underlying property payments (up to $240,000 in total), issuing
an additional 500,000 common shares per year to the Optionors (up to 1,500,000
shares in total) and incurring a further $500,000 in exploration expenditures
per year (up to $1,500,000 in total) on the Property over a period of three
years.
All shares issued under the Option
Agreement will be subject to a four month and one day statutory hold period
(the "Hold Period") from the date of issuance and be subject to a five month
voluntary pooling restriction which will allow for the shares to be released
from the pool at the rate of 100,000 shares per month for five months after the
expiry of the Hold Period. The 300,000
shares which may be issued in lieu of the $15,000 cash payment described above
will not be subject to the pooling restriction, but will be subject the Hold
Period.
During the option
period, the parties will jointly undertake all exploration programs on the
Property via a technical committee to be comprised of two representatives from
the Company and one representative from the Optionors. Upon exercise of the Initial Option or, if
applicable, the Initial Option and all or part of the Additional Option, the
Company and the Optionors will enter into a joint venture agreement for the
further exploration and development of the Property with the Company as the initial
operator.
The Property is
subject to certain permitted encumbrances including a 2% net smelter return
royalty on the Ivanhoe/Emporia patented claims.
About the Company
Far Resources
Ltd. is an exploration company, publicly traded on the Canadian Securities
Exchange under the symbol FAT, focused on the identification and development of
high potential mineral opportunities in stable jurisdictions.
ON BEHALF OF THE BOARD OF DIRECTORS OF
FAR RESOURCES LTD.
Keith C. Anderson, President
The Canadian National Stock Exchange has neither approved nor disapproved the contents of this
news release and accepts no responsibility for the adequacy or accuracy hereof.
This news release contains forward-looking statements,
which relate to future events or future performance and
reflect
management's current expectations and assumptions.
Such forward -looking
statements reflect management's
current beliefs and are based on assumptions made by and information currently available to the
Company. Readers are cautioned that these forward looking statements are neither promises nor guarantees, and
are subject to risks and uncertainties that may cause future results to differ materially from those expected. Specifically, the Option Agreement is subject to
numerous conditions and there are no assurances that all conditions will be
satisfied or waived or that the acquisition of the Property will be
successfully completed on the terms and conditions contemplated herein or at
all. All of the forward-looking statements made in this news release are qualified by these cautionary statements and those in our continuous disclosure filings available on SEDAR at www.sedar.com. These forward-looking statements are made as of the date
hereof and the Company does not assume any obligation to update or revise them to reflect new events or circumstances
save as required under applicable securities legislation.
SOURCE: Far Resources Ltd.