The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
North Arrow Minerals Inc. Jan. 25 reported an agreement has been reached to sell royalty interests in its Redemption diamond project to Umgeni Holdings International Ltd. for C$800,000.
Redemption is located in the Lac de Gras region of the Northwest Territories, roughly 32 kilometers (20 miles) southwest of the Ekati diamond mine.
"This agreement with Umgeni represents a non-dilutive hard-dollar financing that strengthens North Arrow's treasury and allows North Arrow to immediately move ahead with exploration drilling programs at both the Redemption and Pikoo diamond projects.
We expect drilling at the Pikoo project to commence in mid-February and planning is underway to conduct a drilling program at Redemption starting in mid-March," said North Arrow President and CEO Ken Armstrong.
Under the terms of the agreement, Umgeni has agreed to pay North Arrow C$800,000 to acquire: a 1.5 percent gross overriding royalty on diamonds and a 1.5 percent net smelter returns royalty on base and precious metals for three Redemption mineral claims owned by North Arrow; and a 1.25 percent GOR and 1.25 percent NSR on 12 mineral claims and five mining leases that make up the ADD claims, currently under option from Arctic Star Exploration Corp. The ADD royalties will be payable from North Arrow's ultimate interest in the claims.
Under the option agreement with Arctic Star, North Arrow can earn a 55 percent interest in the properties by spending C$5 million on exploration by July 1, 2017.
If North Arrow decides not to proceed beyond 2016 with further exploration under the option agreement with Arctic Star, Umgeni has the right to acquire North Arrow's interest in the option.
Arctic Star has consented to the granting of these 1.25 percent royalties on the ADD claims and the possible future transfer to Umgeni of North Arrow's interest in the option agreement.
Under the agreement with Umgeni, North Arrow must invest at least C$800,000 on exploration at Redemption before August 2016.
Umgeni is a private company of which Christopher Jennings, a director of North Arrow, is a beneficiary of the sole shareholder.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
Reader Comments(0)