POSITIVE REVISION OF JV AGREEMENT FOR 64NORTH PROJECT
SUMMARY
• Spend requirements for the 64 North Project reduced by mutual agreement to reflect shallower, more-cost effective drill targets
• Having successfully earnt a 30% interest in Year 1, under the new terms Resolution can now elect to:
o Earn 42% by spending a further US$0.9m and cash payment of US$100k in Year 2
o Earn 51% by spending US$2.35m, issuing 10m shares and a cash payment of US$100k in Year 3
o Earn 51% by spending US$2.35m, issuing 10m shares and a cash payment of US$100k in Year 3
o Earn 60% by spending US$2.35m, issuing 10m shares and a cash payment of US$100k in Year 4.
• The focus of exploration this year will be the multiple compelling shallow drill targets identified during the extensive groundwork of Year 1
• Cost effective shallow RAB drilling to test outcropping Sunrise Prospect is planned to start in March
• Cost effective shallow RAB drilling to test outcropping Sunrise Prospect is planned to start in March
The outcropping gold mineralisation at Sunrise Prospect and the 50-150m depth East Pogo drill targets are our focus in Alaska for 2021. Fortunately, these prospects simply don’t cost as much to test as last year’s deep diamond core drill targets, on which the deal was based. Working with our project partners Millrock Resources, we have re-cut the deal to reflect the more cost-effective shallower RAB drilling targets planned for 2021. The extensive data collected in 2020 sets the company up to test several highly prospective large scale gold drill targets at the 64North Project this year.
- Managing Director, Duncan Chessell
DETAILS
The Company executed an Option, Earn-in and Joint Venture (JV) agreement on 17 October 2019 as Northern Cobalt Ltd (ASX:N27) (former company name of Resolution Minerals Ltd) with Millrock Resources Inc. Millrock is an Alaskan based project generator company listed on the TSX-V as MRO.
Change Fee
As a change fee to the terms of the original agreement Resolution will issue Millrock (Vendor) 15 million Resolution Minerals Ltd shares as consideration within 20 business days under RML’s existing 7.1 placement capacity.
Updated Terms of the Option, Earn-in & Joint Venture agreement to earn up to an 60% on the entire project and an 80% interest on a single “best block” include:
The new terms require Resolution to make the following spend to earn-in the 64North Project and certain milestone share and cash payments;
• Year 2 - spend a further US$0.9m and cash payment of US$100k to reach 42%;
• Year 3 - spend US$2.35m, issue 10m shares and a cash payment of US$100k to reach 51%;
• Year 4 - spend US$2.35m, issue 10m shares and cash payment of US$100k to reach 60%.
• Year 4 - spend US$2.35m, issue 10m shares and cash payment of US$100k to reach 60%.
• Noting the carry forward Year 1 overspend of US$1m is taken up in the above calculations in Year 2.
Resolution can earn up to 60% of the project by sole funding exploration and making the share and cash payments set out above. Resolution may elect to form a joint venture at the completion of any stage and co-funding conditions will commence. Management is to be by committee with voting according to % interest earnt, with the party with the largest interest, holding the right to be Manager/Operator. Non-contributing parties will be diluted according to an industry standard formula (using a two times dilution rate). If any party is diluted to less than a 10% equity ownership interest their interest will revert to a 1.0% Net Smelter Return (NSR) royalty.
Right to earn up to 80% on one “Best Block”
The project is subdivided into nine blocks (West Pogo, North Pogo, East Pogo, South Pogo, LMS-X, Eagle, Shaw, Divide and Last Chance) of ground as shown Figure 2. After Resolution completes a 60% earn-in on the entire project, a joint venture will be formed over the entire project. At that point, Resolution can elect to form a specific joint venture on one block of interest, and could then earn up to 80% ownership on one block, as per the terms in the table below by loan carrying MRO to first production. Alternatively, Resolution may elect to forgo nominating a best block and co-funding conditions will commence across the entire project. Non-contributing parties will be diluted according to an industry standard formula (using a two times dilution rate).
Resolution can earn up to 60% of the project by sole funding exploration and making the share and cash payments set out above. Resolution may elect to form a joint venture at the completion of any stage and co-funding conditions will commence. Management is to be by committee with voting according to % interest earnt, with the party with the largest interest, holding the right to be Manager/Operator. Non-contributing parties will be diluted according to an industry standard formula (using a two times dilution rate). If any party is diluted to less than a 10% equity ownership interest their interest will revert to a 1.0% Net Smelter Return (NSR) royalty.
Right to earn up to 80% on one “Best Block”
The project is subdivided into nine blocks (West Pogo, North Pogo, East Pogo, South Pogo, LMS-X, Eagle, Shaw, Divide and Last Chance) of ground as shown Figure 2. After Resolution completes a 60% earn-in on the entire project, a joint venture will be formed over the entire project. At that point, Resolution can elect to form a specific joint venture on one block of interest, and could then earn up to 80% ownership on one block, as per the terms in the table below by loan carrying MRO to first production. Alternatively, Resolution may elect to forgo nominating a best block and co-funding conditions will commence across the entire project. Non-contributing parties will be diluted according to an industry standard formula (using a two times dilution rate).
Grace Period
During the sole funding earn-in period, Resolution has the right to trigger a single “grace period”, allowing for a six- month extension to meet our required minimum expenditure for a particular earn-in stage.
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