Churchill Resources Inc. reports that it has signed a definitive option agreement with Altius Resources Inc. to obtain a 100% undivided interest in some mining claims including the Florence Lake Ni-Cu-PGE property located in central Labrador next to the coastal community of Hopedale and 175 km to the south of the Voisey’s Bay mine.
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The Florence Lake Property incorporates various Raglan-type ultramafic volcanic-hosted huge and disseminated sulfide nickel showings and was last excavated by Falconbridge between 1990 and 1997. The exploration involved around 6,250 m of drilling in 45 shallow holes, with a drill core present on the property for relogging and sampling.
Option Agreement Terms
As per the Option Agreement, Churchill Resources shall have the sole option for two years to obtain an undivided 100% ownership interest in the Florence Lake Property by:
- Issuing 1,373,946 common shares in the capital of Churchill Resources (“Common Shares”) to Altius (which have been issued)
- Incurring at least $1,500,000 in exploration expenditures in two years after the execution date of the Option Agreement
- Finishing an equity financing based on a private placement for aggregate gross gains of at least $4 million (the “Private Placement”)
- After the completion of the Private Placement, issuing to Altius 7,000,000 Common Shares or such lesser number of Common Shares such that after such issuance, Altius shall not own over 19.9% of the Common Shares outstanding after the issuance of such Common Shares to Altius, on a partially diluted basis
- Offering Altius with a right of nomination to elect one nominee to Churchill’s board of directors until such time that Altius profitably owns below 9.9% of the Common Shares
- Offering Altius a pre-emptive right to take part in future equity financings of Churchill to retain its share ownership percentage interest in Churchill to a peak of 19.9% of the issued and outstanding Common Shares until such time that Altius usefully owns below 9.9% of the Common Shares
After the date that the option is deemed to have been exercised by its terms, Churchill will issue and grant to Altius a 1.6% gross sales royalty on any minerals generated from the claims comprising the Florence Lake Property.
Florence Lake Property
The Florence Lake Project consists of three map-staked licenses in two blocks, with the northern Florence Lake Block comprising Licenses 027520M (50 claims) and 032167M (151 claims) summing 5,025 ha or 50.25 km2. The southern Seahorse Lake Block includes license 032231M involving 172 claims, which encompass 4,300 ha or 43 km2. Such licenses need $78,139.00 in assessment work during the present year.
Unless differently indicated, the scientific and technical data contained in this news release has been considered and approved by Paul Sobie, P.Geo, who is a “qualified person” within the meaning of National Instrument 43-101 – Standards of Disclosure for Mineral Projects.