Northland Resources S.A.

Northland Resources S.A.

March 22, 2011 15:58 ET

Northland Sells its Swedish Non-Ferrous Assets

LUXEMBOURG, LUXEMBOURG--(Marketwire - March 22, 2011) - Northland Resources S.A. (TSX:NAU)(FRANKFURT:NPK)(OSLO:NAUR) ("Northland" or "the Company") is pleased to announce that it has signed an agreement to sell the Company's non-ferrous projects in Sweden to Orex Minerals Inc. ("Orex"). This agreement follows the spirit and content of the Letter of Intent that was signed between the parties on October 27, 2010. The total consideration is valued at a minimum of USD 15.5 million, and includes a mix of upfront cash and shares, as well as deferred cash and share payments, guaranteed investments and a 2% Net Smelter Royalty ("NSR").

"The sale of the non-ferrous projects in Sweden, including the Barsele Gold Project, is in line with the Company's strategy to focus on the development of its iron ore deposits. The Board of Directors believes that the inherent value of the Swedish non-ferrous projects will be better developed by a team that can focus its resources and technical expertise on advancing these projects towards mining operations," said Karl-Axel Waplan, Northland's Chief Executive Officer.

Northland will receive a total of USD 5 million in cash over two years, and USD 3.5 million of Orex shares to be issued over a period of four years from the signing of the agreement. Orex has also guaranteed that a minimum USD 3 million will be spent on the non-ferrous projects in the first two years. Finally, Northland will retain a 2% NSR, which can be purchased at any time by Orex for USD 4 million in cash. Northland will also have the right to appoint a Director to the Board of Orex.

Orex is a silver and gold exploration company with projects in Mexico. It is listed on the TSX Venture Exchange, under the trading symbol REX. The Orex management team has a proven track record in exploration and company development.

The transaction is subject to the approval of relevant authorities including the TSX. A further announcement will be made upon closing. Pareto Securities AS has acted as financial advisor with respect to this transaction.

Northland is a development-stage mining company with a portfolio of iron projects in northern Sweden and Finland. Northland's Kaunisvaara Project contemplates the staged development of magnetite iron ore deposits that would provide feed to a single, multi-line processing facility in Sweden, producing a high-grade, high-quality magnetite iron concentrate. The results of the Feasibility Study on the Kaunisvaara Project were released September 27, 2010.

Karl-Axel Waplan, President & CEO, Northland Resources S.A.

Contact Information

  • Northland Resources S.A.
    Karl-Axel Waplan
    President and CEO
    +46 705 104 239
    Northland Resources S.A.
    Anders Hvide
    Executive Chairman
    +47 92 88 98 58
    Northland Resources S.A.
    Eva Kaijser
    Chief Financial Officer
    +46 70 932 09 01
    Northland Resources S.A.
    Marguerite Manshreck-Head
    Investors Relations, Canada
    + 1 647 224 7882