CALGARY, ALBERTA--(Marketwired - Jan. 27, 2014) - Margaux Resources Ltd. (TSX VENTURE: MRL) ("Margaux" or the "Company") is pleased to announce that it has entered into an amendment (the "Amendment") to its previously announced option agreement (the "Option Agreement") dated November 8, 2013 with Sultan Minerals Inc. ("Sultan") in respect of the Jersey-Emerald Tungsten-Zinc Property (the "Property"), located in southeastern B.C (announced November 11, 2013). The Amendment provides for an extension in the timeframe to make the installment payments required under the original Option Agreement to account for the delay the Company experienced in closing its private placement offering. The recent closing of the Company's private placement (announced January 21, 2014) allows the Company to move forward with the Option Agreement and to make the required initial payments thereunder. In addition, the trading halt on Margaux's common shares will soon be lifted, and the Company expects that trading will resume on January 29, 2014.
Under the terms of the Amendment, Margaux will have the exclusive option to acquire a 100% working interest in the Property (subject to the net smelter returns royalties ("NSRs") discussed below) by:
- making payments to Sultan of an aggregate $4.0 million, paid in several installments on or before November 8, 2016 (the "Agreement Date") as follows:
- an initial deposit of $50,000 paid previously;
- a cash payment of $150,000 on or before January 29, 2014;
- on or before the January 29, 2014, a cash payment of $300,000, to be held in trust pending receipt of TSX Venture Exchange approval for the transaction;
- on or before the first anniversary of the Agreement Date, a cash payment of $750,000;
- on or before the second anniversary of the Agreement Date, a cash payment of $1,250,000; and
- on or before the third anniversary of the Agreement Date, a cash payment of $1,500,000; and
- an initial deposit of $50,000 paid previously;
- incurring not less than $2,000,000 in expenditures on the Property on or before the third anniversary of the Agreement Date.
Margaux will use its best efforts to incur expenditures of $6,000,000 on the Property on or prior to the third anniversary of the Agreement Date.
The other terms of the Option Agreement remain unchanged, including Sultan's retention of a 1.5% NSR on the Property. For a period of 60 days following the earlier of (a) the commencement of commercial production on the Property or (b) the completion of a feasibility study on the Property, Margaux may purchase 50% of the NSR (being a 0.75% net smelter returns royalty) from Sultan for a payment to Sultan of $5.0 million. The Property is also subject to several additional NSRs, ranging from 1-2% on various areas of the Property.
As announced on January 15, 2014, the Company has appointed Mr. Edward Lawrence to the Board of Directors of the Corporation. Mr. Lawrence will act as the Corporation's "Qualified Person" under National Instrument 43-101, "Standards of Disclosure for Mineral Projects" ("NI 43-101") with respect to the technical disclosure concerning the Property.
As of the date hereof, neither the Company nor Mr. Lawrence have verified the resource estimates or the exploration information pertaining to Sultan's public disclosure regarding the Property. Sultan's resource estimates are considered historical estimates and the estimates should not be relied upon. The Company understands that no additional exploration or development work has been completed on the Property since the dates of Sultan's most recent NI 43-101 reports. In connection with seeking TSX Venture Exchange ("Exchange") approval of the Option Agreement (as discussed below), the Company expects to commission an updated NI 43-101 technical report.
Completion of the transaction is subject to a number of conditions, including receipt of final TSX Venture Exchange approval. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that any information released or received with respect to the Property may not be accurate or complete and should not be relied upon. Trading in the securities of Margaux should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
Tyler Rice, President and CFO
FORWARD LOOKING INFORMATION
This press release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the forgoing, this press release contains statements concerning the Company's expectations regarding receipt of regulatory approvals, the ability to make the required installment payments under the Option Agreement, the Company's ability to obtain a new NI 43-101 report and the timing thereof.
Forward-looking statements or information are based on a number of material factors, expectations or assumptions of Margaux which have been used to develop such statements and information but which may prove to be incorrect. Although Margaux believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because Margaux can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties.
The forward-looking statements contained in this press release are made as of the date hereof and Margaux undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
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.
Contact Information:
(403) 537 5590