TORONTO, ONTARIO–(Marketwire – Dec. 20, 2012) – Noront Resources Ltd. (“Noront” or the “Optionor”) (TSX VENTURE:NOT) clarifies position on Windfall Lake.
On December 17, 2012, Eagle Hill Exploration Corporation (“Eagle Hill” or the “Optionee”) issued a press release announcing that Stantec Consulting Ltd. (“Stantec”) had been awarded a contract to produce a pre-feasibility study (“PFS”) on the Windfall Lake Property (“Windfall Lake” or the “Project”). Eagle Hill’s interest in Windfall Lake is governed by the terms and conditions of an option agreement between Noront and Eagle Hill that was entered into on July 21, 2009 (“the “Option Agreement”).
In the December 17th Press Release, Eagle Hill states: “Under the terms of the Option Agreement to acquire the Windfall Lake Property, Eagle Hill must give notice of the Company’s commitment to cause the commencement of commercial production on the Property within one year of earning a 75% interest in the Windfall Lake Property (the “Notice”). Eagle Hill earned its 75% interest in the Property on April 20, 2012. In this regard, Eagle Hill has engaged Stantec to provide a mineral reserve estimate based on the results of the PFS. The results of the PFS will be available on or before April 20, 2013. Upon receipt of the reserve estimate, Eagle Hill will be in a position to deliver the Notice to the Optionor pursuant to the Option Agreement.” Eagle Hill’s press release also states “Once the obligations are satisfied, the buy-back provisions contained in the Option Agreement will be eliminated.”
Under the terms of the Option Agreement, Eagle Hill must deliver either (i) a bankable feasibility study providing for a minimum internal rate of return of 15% on the Project (the “BFS”), or (ii) commit to cause the commencement of commercial production from the Project, within one year of earning its 75% interest, which occurred on April 20, 2012. If Eagle Hill does not complete a BFS or take the project to production, then Noront will have the option to purchase back the 75% of the Project from Eagle Hill for the lesser of (i) an amount equal to the expenses incurred by Eagle Hill and (ii) $6.0 million (the “Buy-back Provisions”), The delivery of the PFS does not satisfy the above requirements and as such, Noront will continue to retain its rights under the Option Agreement, including the Buy-Back Provisions, subject to the terms and conditions of the purchase and sale agreement between Noront and Maudore Minerals Ltd. announced on December 5, 2012 (the “Noront – Maudore Agreement”).
Upon receipt of the Notice, Noront will act in accordance with the provisions of the Option Agreement and in the best interest of Noront’s shareholders, subject to the terms and conditions of the Noront – Maudore Agreement.
Furthermore, Eagle Hill stated in the December 17th press release that “Upon Eagle Hill delivering the Notice, the Optionor will then have 180 days to notify Eagle Hill if it wishes either to continue as a 25% joint venture partner (currently it is a carried partner), or to transfer 100% of the Property to Eagle Hill in exchange for a 2% NSR.
In accordance with the Option Agreement, the aforementioned 180-day period is only initiated upon the delivery of a BFS and not upon receipt of the Notice committing to the commencement of commercial production. Upon receipt of a completed BFS, Noront may elect to maintain its 25% interest in the Project. Under the terms of the Option Agreement, Noront can require Eagle Hill to fund its share of expenditures, with such advance to accrue interest at a rate of 10% per annum and re-payable from income or royalty income from the Project. It should also be noted, as per the Option Agreement that the Optionee is required to repay Noront for initial expenses incurred on the Project, established in the Option Agreement as $11.9 million. This initial expense is to be repaid from the proceeds of any operations from the Project in preference to all amounts otherwise payable other than permitted senior debt approved by Noront and current operating expenditures.
The Option Agreement will also be added to Noront’s SEDAR filings.
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.
Wesley (Wes) Hanson, President & Chief Executive Officer
FORWARD LOOKING STATEMENTS
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.
Manager, Corporate Communications