TORONTO, ONTARIO–(Marketwired – April 19, 2013) – Noront Resources Ltd. (“Noront” or the “Company”) (TSX VENTURE:NOT) today announces that an agreement (the “Amending Agreement”) has been signed between the Company and Eagle Hill Exploration Corp. (“EAG”) to amend certain provisions of the option agreement entered into between the parties on July 20, 2009 (the “Option Agreement”) in regards to the Windfall Lake Property (the “Project”).
Paul Parisotto, Interim President and CEO stated: “The Windfall Lake Property is a non-core asset of the Company and this Amending Agreement provides Eagle Hill with more time to carry out work to further advance the Project and allows Noront to maximize the value of its interest. Noront is committed to advancing its Eagle’s Nest Project and any proceeds from a possible sale of its interest in the Project will be used to further develop Eagle’s Nest.”
In accordance with the Option Agreement, EAG earned a 75% interest in the Project and the Company retains a 25% interest subject to the provisions of the Option Agreement. Upon earning its 75% interest under the Option Agreement, EAG was required to deliver either a bankable feasibility study (providing for a minimum internal rate of return of 15%) or commit to cause the commencement of commercial production (the “Delivery Requirement”) by April 20, 2013. If EAG does not complete a bankable feasibility study or take the project to production by April 20, 2013, then the Company has the option to purchase back the 75% of the Project from EAG for the lesser of (i) an amount equal to the expenses incurred by EAG and (ii) $6 million (the “Buy-Back Provisions”).
Under the provisions of the Amending Agreement, the Company has agreed to extend the Delivery Requirement date to April 20, 2016. The Company retains its rights under the Buy-Back Provisions if the Delivery Requirements are not satisfied by April 20, 2016. In consideration for the extension EAG will i) provide a financial guarantee to the Quebec government for the reclamation obligation on the Project and apply to transfer the reclamation obligation from the Company to EAG, ii) pay cash consideration to the Company of $615,000 and iii) remove the provisions in the Option Agreement requiring the Company to obtain the prior consent of EAG for the transfer of the Company’s interest in the Project.
The Amending Agreement further provides that if the Company exercises its rights under the Buy-Back Provisions and then takes the Project into production, the Company will pay to EAG the amount EAG has spent during the period from April 20, 2013 to April 20, 2016 from the proceeds of production, in priority to all amounts otherwise payable except senior debt, interest on senior debt, operating costs and $11.9 million (the Company’s previous exploration expenditures on the project).
The Company has also granted EAG a 90 day exclusivity period to negotiate the purchase of the Company’s interest in the Project.
The closing of the Amending Agreement is subject to EAG paying $615,000 in cash to the Company within 90 days from the date hereof. If EAG is unable to meet these conditions within 90 days, Noront retains its rights under the Buy-Back Provisions or if Noront does not elect to exercise the Buy-Back right, the Company’s interest in the Project will automatically increase to 30%.
In addition, the Company wishes to advise that it has signed a Termination Agreement with Maudore Minerals Limited (“Maudore”).
The Termination Agreement terminates the Purchase and Sale Agreement entered into between the parties on December 4, 2012, whereby Maudore was to acquire the Company’s 25% undivided right, title and interest in and to the Property. Accordingly, both parties are released from any further obligations under the Purchase and Sale Agreement.
About Noront: Noront Resources Ltd. is focused on development of the high-grade Eagle’s Nest nickel, copper, platinum and palladium deposit and the high-grade Blackbird chromite deposit, both of which are located in the James Bay Lowlands of Ontario in an emerging metals camp known as the Ring of Fire.
This release contains “forward-looking statements” within the meaning of applicable Canadian securities legislation, including predictions, projections and forecasts. Forward-looking statements include, but are not limited to, statements that address activities, events or developments that the Company expects or anticipates will or may occur in the future, including such things as future business strategy, competitive strengths, goals, expansion, growth of the Company’s businesses, operations, plans and with respect to exploration results, the timing and success of exploration activities generally, permitting time lines, government regulation of exploration and mining operations, environmental risks, title disputes or claims, limitations on insurance coverage, timing and possible outcome of any pending litigation and timing and results of future resource estimates or future economic studies.
Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “planning”, “planned”, “expects” or “looking forward”, “does not expect”, “continues”, “scheduled”, “estimates”, “forecasts”, “intends”, “potential”, “anticipates”, “does not anticipate”, or “belief”, or describes a “goal”, or variation of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved.
Forward-looking statements are based on a number of material factors and assumptions, including, the result of drilling and exploration activities, that contracted parties provide goods and/or services on the agreed timeframes, that equipment necessary for exploration is available as scheduled and does not incur unforeseen break downs, that no labour shortages or delays are incurred, that plant and equipment function as specified, that no unusual geological or technical problems occur, and that laboratory and other related services are available and perform as contracted. Forward-looking statements involve known and unknown risks, future events, conditions, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, prediction, projection, forecast, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the interpretation and actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of gold; possible variations in grade or recovery rates; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of exploration, as well as those factors disclosed in the Company’s publicly filed documents. Although Noront has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
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.
Chairman and Interim CEO