TORONTO, ON / ACCESSWIRE / December 6, 2018 / Kapuskasing Gold Corp. (TSX-V: KAP) ("Kapuskasing") and Ubique Minerals Limited (UBQ) ("Ubique") announce that they have signed a Letter of Intent ("LOI") which contemplates Kapuskasing granting Ubique an option to earn a 55% or greater interest in Kapuskasing's Daniel's Harbour Zinc property in western Newfoundland. The property comprises 42 claim units covering an aggregate area of 1,326 hectares, adjoining Ubique's Daniel's Harbour property to its west and making for a contiguous property area of more than 4,000 hectares.
The LOI provides the companies with a short time frame in which to complete due diligence and a definitive agreement. Pursuant to the LOI, Ubique could exercise the option by making the work and payment commitments as follows:
- On the date of signing of the definitive agreement, $10,000 cash and 500,000 shares of Ubique;
- Prior to March 9, 2019, a minimum work expenditure of $12,000 and file an assessment report;
- Prior to September 15, 2019, a minimum work expenditure of $100,000 inclusive of the $12,000 above;
- Prior to the 1 year anniversary from the definitive agreement date, $10,000 in cash and an additional 300,000 common shares of Ubique;
- Prior to February 28, 2020, make a minimum additional work expenditure of $200,000;
- Prior to the 2 year anniversary from the definitive agreement date issue an additional 200,000 common shares of Ubique;
- Prior to February 28, 2021, a minimum additional work expenditure of $300,000, of which expenditures will include any payments and commitments needed to be made to the underlying vendors of the optioned property;
- Upon Ubique having made the above expenditures and payments; Ubique will have earned a 55% interest in the property. Ubique will be granted the option to earn an additional 15% interest in the property by spending an additional $400,000 on exploration and paying the underlying vendors a cash payment of $40,000 as required by the underlying agreement with the vendors.
Upon UBQ earning either a 55% or 70% interest in the property, the companies will form a joint venture to continue exploration, or KAP may elect to grant UBQ the right to earn an additional 5% interest in the property for every additional work expenditure of $100,000 to a limit of 95% ownership by UBQ, at which time the agreement provides for KAP's interest to be converted to a 2% Net Smelter Royalty ("NSR").
UBQ will then have the right to buy back 1.75% of the NSR for $2,000,000. The underlying vendors are entitled to a NSR of 3% of which 2% may be repurchased for $2,000,000. In addition, the underlying vendors are entitled to a bonus payment in the event that the Operator delineates a National Instrument 43-101 compliant resource of a minimum of 5,000,000 tonnes of ore with a grade of at least 7% zinc.
Mr. Garry Clark P.Geo, (Exploration Manager and a director of the Company) a Qualified Person ("QP") as defined by National Instrument 43-101, has reviewed the technical content of this release.
On behalf of the Board of Directors
Kapuskasing Gold Corp.
Jonathan Armes
President & CEO
Phone 1 (416) 708-0243
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 press release.
This press release contains forward-looking statements within the meaning of applicable Canadian and U.S. securities laws and regulations, including statements regarding the future activities of the Company. Forward looking statements reflect the current beliefs and expectations of management and are identified by the use of words including "will", "anticipates", "expected to", "plans", "planned" and other similar words. Actual results may differ significantly. The achievement of the results expressed in forward-looking statements is subject to a number of risks, including those described in the Company's management discussion and analysis as filed with the Canadian securities regulatory authorities which are available at www.sedar.com. Investors are cautioned not to place undue reliance upon forward-looking statements.
SOURCE: Kapuskasing Gold Corp.