Commander Resources Ltd.
TSX VENTURE : CMD

Commander Resources Ltd.

March 25, 2010 16:00 ET

Commander Agrees to Sell an Interest in Its Orion Gold Deposit

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 25, 2010) - Commander Resources Ltd. (TSX VENTURE:CMD) ("Commander") reports that it has entered into a Letter of Intent ("LOI") with BMB Capital Corp (TSX VENTURE:BMB.P) ("BMB"), a Capital Pool Company ("CPC") whereby BMB may acquire an initial 50% interest ("Initial Interest") in Commander's wholly owned Green Bay mineral property (the "Property") in Newfoundland, Canada. The LOI also provides BMB the further option of increasing its ownership in the Property to 100%. The main asset on the Property is the Orion Gold Deposit ("Orion"). The Property is also host to several gold and base metal occurrences.

The acquisition of the Initial Interest in the Property represents an Agreement in Principal, subject to TSX Venture Exchange ("TSXV") acceptance, and is intended to be BMB's Qualifying Transaction pursuant to the policies of the TSXV regarding CPC's. Currently BMB has 4.5 million shares issued and has about $500,000 in the treasury.

Transaction Details

Acquisition of Initial Interest:

Under the LOI, dated March 11, 2010 as amended March 19, 2010, BMB shall have the right to acquire the Initial Interest in the Property by issuing to Commander 12,000,000 treasury shares of BMB and by raising the amount of CDN$1 million dollars through completion of a private placement financing ("Project Financing"), such funds to be used by BMB for conducting mineral exploration activities on the Property.

BMB will have the right to acquire the Initial Interest subject to TSXV acceptance of the agreement, Project Financing having been obtained by BMB and TSXV's confirmation that trading will be resumed without the CPC designation ("Approval Date").

Once BMB has vested its Initial Interest, BMB will be responsible for funding all exploration expenditures on the Property. BMB shall commit to spending a minimum of $1 million dollars in eligible work expenditures ("Committed Expenditures") on the Property within the 18 month period following the Approval Date.

Option to Acquire Remaining Interest or form a Joint Venture:

BMB, at any time from the date of vesting its Initial Interest up to the earlier of the date BMB commences Commercial Production from the Property or a date that is before the expiry of 5 years from the date BMB vests its Initial Interest, will have the right to acquire the remaining 50% of the Property from Commander by issuing 5,000,000 treasury shares of BMB to Commander.

Once BMB has vested its Initial Interest and completed the Committed Expenditures, BMB may elect not to increase its interest to 100% in which event the parties agree that further exploration and development on the Property will be operated under a 50/50 Joint Venture ("JV") between the parties in accordance with standard industry terms. It is agreed that for the purposes of the JV, the Deemed Expenditures will be calculated based on the Actual Expenditures incurred by BMB from the Approval Date to the date of its election to form a JV. Furthermore it is agreed that at that time, Commander's Deemed Expenditures shall be calculated at 1.5 x (150%) of BMB's Actual Expenditures, but remain as a 50:50 JV. For greater clarity, should a JV be formed, Commander's 50% interest will be carried until the BMB's actual expenditures equal Commander's Deemed Expenditures.

If a JV is formed, BMB will be the initial Operator. If a party's interest is reduced to less than 10%, that party will be deemed to have assigned and conveyed its interest to the other party and in return it will receive a royalty of 10% net profits ("NPI").

Net Smelter Returns Royalty (NSR):

The Exploration Lands outside the current boundary of Orion shall be subject to a 2% net smelter returns royalty ("NSR") payable to Commander with BMB having the right to acquire 50% of the NSR for $1,000,000 at any time up to Commercial Production from the Exploration Lands.

Right of First Refusal:

Prior to acquiring 100% of the Property, Commander shall have a right of first refusal (ROFR) to purchase BMB's interest in the Property should BMB wish to dispose of all or part of its interest.

Other Conditions:

Prior to the issuance of the first 12,000,000 treasury shares, a party chosen by Commander shall be appointed the CEO, President and a director of BMB, subject to completion of necessary regulatory filings regarding this appointment. Once TSXV acceptance has been granted and trading resumes, BMB will operate all work on the Project and Commander, may, at the request of BMB provide administrative and corporate support to BMB under contract arrangements to be agreed upon.

All of the existing board members of BMB shall remain as directors of BMB following acquisition of the Initial Interest. On acquisition of the Initial Interest, Commander will be an insider of BMB.

All shares issued of BMB to Commander will be subject to a 4 month hold period and TSXV escrow restrictions.

Commander, at its expense will provide BMB with an independently prepared 43-101 report and valuation on the Property in support of the issuance of the 12,000,000 shares of BMB. Commander agrees to assist BMB to complete the planned $1,000,000 private placement.

If BMB does not acquire the Initial Interest by November 30, 2010, the option to BMB shall expire unless extended by agreement of the parties.

The LOI requires that the parties enter into a formal agreement incorporating the terms and conditions of the LOI such formal agreement to be subject to approval by TSX Venture Exchange and by the Boards of Directors of the parties and by the shareholders of BMB.

Property Details:

The primary asset on the Property is the Orion Gold Deposit ("Orion") and surrounding Exploration Lands. The Property is located 14 kilometres northwest of Springdale and 7 kilometres southwest of Kings Point, Newfoundland.

Orion lies within the extensive Hammerdown deformation corridor approximately 1,700 metres southwest of the former producing Hammerdown Gold Mine, which forms part of the Property. Based on 46 diamond drill holes completed by Commander's predecessor Company, Major General Resources in the 1990's, Orion contains a non-compliant resource* ranging from 300,000 tonnes grading 8 g/t gold (approx 80,000 contained ounces) to 740,000 tonnes grading 5 g/t gold (approx 120,000 contained ounces). Commander has commissioned an independent NI 43-101 Technical Report on Orion to qualify and categorize the previous drilling and resource data.

Recent re-evaluation of the data shows that the mineralized zone is completely open at depth in an easterly direction. As there has been no drilling below 225 metres in the plunge direction, the opportunity to locate additional gold resources at Orion is significant. Geological interpretation has also determined that potential may exist at depth between Hammerdown and Orion within the deformation corridor.

Orion is ideally located for potential near term development, four kilometres from a paved highway and directly connected by a good gravel road. Nearby, the Nugget Pond gold mill, which processed all of the Hammerdown ore, was recently acquired by Rambler Metals and is currently in operation.

*The potential quantity and grade is conceptual in nature. There has been insufficient drilling to define a mineral resource and it is uncertain if further drilling will result in delineation of a mineral resource.

Bernard Kahlert, P.Eng is the Qualified Person under NI 43-101 responsible for the work completed on the Orion deposit in the 1990's and has reviewed and approved the contents of this release.

Larry Pilgrim, P.Geo is the Qualified Person under NI 43-101 responsible for completion of the 43-101 report on the current Orion resource that will be filed with the TSX Venture Exchange as part of this agreement.

On Behalf of the Board of Directors,

Kenneth Leigh
President & CEO

Shares Issued: 90,399,516

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

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