Vancouver, British Columbia - April 16, 2012 - Musgrove Minerals Corp. ("Musgrove" or the "Company") (TSX.V: MGS) announces that it has entered into a letter of intent with Konnex Resources Inc., ("Konnex") ("LOI") whereby Konnex has been granted an option to acquire the Company's interest in its Empire Mine located in Idaho, USA.
Under the terms of the LOI, Konnex, (a private company owned 18% by Cliffs Natural Resources (CLF:NYSE)) will have the exclusive right and option to acquire the Company's rights to the Empire Mine project by: (i) paying to the company a total of $1,490,000 cash plus (ii) $350,000 of Konnex stock. Production from the Empire Mine project will remain subject to a 2.5% net smelter return royalty ("NSR") to the underlying owners as well as a 2% NSR to the Company. Certain specific terms include:
(i) a $40,000 deposit (paid) upon signing of the LOI; (ii) $200,000 payable upon the date that the TSX Venture Exchange accepts for filing a definitive agreement with respect to the option (the "Effective Date") (iii) $50,000 60 days after the Effective Date; (iv) $250,000 on the earlier of the date that Konnex completes an initial public offering or 6 months after the Effective Date; (v) $725,000 payable on the earlier of the date Konnex completes an initial public offering or 12 months after the Effective Date; and (vi) a payment of $225,000 to the Company on or before 18 months after the Effective Date. Konnex will have the right at any time up to 60 months from the Effective Date, to purchase the 2 per-cent NSR to the Company for a single $5-million lump sum payment.
Under the terms of LOI, Konnex has also agreed to complete a work program of not less than $1,000,000 within 12 months of completing its initial public offering date and to assume all property payments and commitments of the Company to the underlying owners commencing May 1, 2012.
The completion of the option is subject to a number of conditions, including but not limited to the execution of a definitive agreement, satisfactory due diligence, and the acceptance of filing by the TSX Venture Exchange. There can be no assurance that the transaction will be completed as proposed or at all.
ON BEHALF OF THE BOARD OF DIRECTORS OF
MUSGROVE MINERALS CORP.
BY ORDER OF THE BOARD
"Rana Vig"
Rana Vig
President and CEO
MUSGROVE MINERALS CORP.
About Musgrove Minerals Corp.
Musgrove Minerals Corp. www.musgroveminerals.com is a mineral-exploration resource company trading on the TSX Venture Exchange (Symbol:MGS). The Company is currently exploring advanced exploration-stage projects; the 100% interest "Empire Mine" Project; the 100% interest "Musgrove Creek" Gold Project, The Empire Mine Project is a polymetallic skarn deposit containing copper, zinc, gold and silver located in the Alder Creek Mining District in Custer County, Idaho. The mine is located on the east-facing slope of the White Knob Mountains approximately three miles west of Mackay, Idaho. The Property consists of 26 patented mining claims, six mill-site claims and 21 unpatented mining claims.
The Musgrove Project, located in the Panther Creek drainage NNW of Challis, ID, is a prospect for a disseminated gold bulk-tonnage surface project similar to the Beartrack Mine, a nearby former gold producer.
Further information: Rana Vig at (604) 633-2442, or toll free 1-800-667-1442, or via email [email protected], or by visiting our website at www.musgroveminerals.com
FORWARD LOOKING STATEMENTS This press release may contain or refer to certain forward-looking statements relating, but not limited to, Musgrove's expectations, intentions, plans and beliefs with respect to Musgrove. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "does not expect", "is expected", "budget", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or equivalents or variations, including negative variations, of such words and phrases, or state that certain actions, events or results, "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. Forward-looking statements rely on certain underlying assumptions that, if not realized, can result in such forward-looking statements not being achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of Musgrove to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Although Musgrove has attempted to identify important factors that could cause actual actions, events or results or cause actions, events or results not to be 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. Other than as required by applicable Canadian securities laws, Musgrove does not update or revise any such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Accordingly, readers should not place undue reliance on forward-looking statements.
Neither the 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