VANCOUVER, June 19, 2014 /CNW/ - Discovery Harbour
Resources Corp. (TSXV:DHR) ("Discovery" or the "Company") announces
that Northern Shield Resources Inc. ("Northern Shield") (TSXV:NRN),
has sold its 49% interest in the Wabassi Joint Venture (the
"Wabassi JV") and its 59% interest in the joint venture for the
neighboring Max property (the "Max JV") to Great Lakes Resources
LLC ("Great Lakes"), a private US based company, and has granted
Great Lakes a first right of refusal to acquire its 100% interest
in the Storm Property (the "Storm Rights"). As a result of this
acquisition by Great Lakes, the interests in the Wabassi JV are
held by the Company (51%) and Great Lakes (49%) and the interests
in the Max JV are held by Great Lakes (59%) and by Rainy Mountain
Royalty Corp. (TSXV:RMO) (41%).
On completion of this purchase by Great Lakes, the Company was
granted an option (the "Option") by Great Lakes to acquire a 49%
interest in the Wabassi JV, a 59% interest in the Max JV and the
Storm Rights. The Option may be exercised by the Company paying
$2,605,684 plus 8% accumulated
interest thereon, compounded monthly, by June 18, 2015. If the Option is exercised by the
Company, the Company will acquire a 49% interest in the Wabassi JV
which would make the Company the 100% owner of the Wabassi
Property, a 59% interest in the Max JV and the Storm Rights, all
subject to the NRN Wabassi Royalty (as defined below) and the NRN
Max Royalty (as defined below).
As part of purchase transaction between Great Lakes and Northern
Shield, Great Lakes granted Northern Shield a 0.5% net smelter
returns royalty from the Wabassi property (the "NRN Wabassi
Royalty") and a 0.6% net smelter returns royalty from the Max
property (the "NRN Max Royalty"). Half of each of the NRN Wabassi
Royalty and NRN Max Royalty may be purchased by the royalty payor
paying $750,000 to Northern Shield at
any time on or before June 18, 2019,
or by paying $1,500,000 thereafter in
respect of each royalty.
In addition, the Company, Great Lakes and Northern Shield have
agreed with respect to each of the Wabassi JV and the Max JV, that
if Great Lakes' participating interest in each of these joint
ventures is diluted below 10% before the Option is exercised by the
Company, then: (i) the NRN Wabassi Royalty and NRN Max Royalty will
be terminated, and (ii) the 2.0% net smelter returns royalty that
would otherwise be payable to Great Lakes under the terms of the
joint venture agreements for such properties, shall be replaced
with: (a) a 1.5% net smelter returns royalty payable to Great
Lakes, which the Company shall have the pre-emptive right to reduce
from 1.5% to 0.75% by paying Great Lakes $700,000, and (b) a 0.5% net smelter returns
royalty payable to Northern Shield, which the Company shall have
the pre-emptive right to reduce from 0.5% to 0.25% by paying
Northern Shield $300,000. Also, in
connection with these transactions, the Company has granted
Northern Shield a limited non-exclusive license to use and access
the Wabassi camp in consideration for certain rental fees and
consumable fees. It is expected that the Company will continue as
operator of the Wabassi JV.
"Completion of this transaction marks the first step toward
the Company's strategic goal of consolidating the Wabassi District
under a single entity. It is important to remember that Wabassi is
not a single project, but a previously undiscovered district. We
will now turn our attention to integrating our efforts with those
of the Province of Ontario, First
Nations and private companies to develop access and infrastructure
to support development of the Ring of Fire mineral province.
The Wabassi Joint Venture holds over 12 kilometers of right of way
along southern portion of one of the proposed access routes.
Improved access is key to lowering our exploration costs and
improving the overall development profile of the Wabassi
District.," stated Bruno
Hegner, President and CEO of the Company.
Great Lakes is a private US company controlled by Richard B. Gilliam, a director and significant
shareholder of the Company. The Company's exercise of the Option
remains subject to approval of the TSX Venture Exchange ("TSXV")
and, if required, approval of the shareholders of the Company.
ON BEHALF OF THE BOARD OF DISCOVERY HARBOUR RESOURCES
CORP.
"Bruno Hegner"
Bruno Hegner
President, CEO and Director
Disclaimer for Forward-Looking Information
Except for statements of historical fact, this news release
contains certain "forward-looking information" within the meaning
of applicable securities law. Forward-looking information is
frequently characterized by words such as "plan", "expect",
"project", "intend", "believe", "anticipate", "estimate" and other
similar words, or statements that certain events or conditions
"may" occur. Forward-looking information in this press release
includes, but is not limited to, statements regarding expectations
of management regarding: (i) the Option, (ii) TSXV and shareholder
approval of the Option, (iii) the operations of the Wabassi JV and
Max JV, and (iv) the royalties related to the Wabassi property and
Max property. Although the Company believes that the expectations
reflected in the forward-looking information are reasonable, there
can be no assurance that such expectations will prove to be
correct. Such forward-looking statements are subject to risks and
uncertainties that may cause actual results, performance or
developments to differ materially from those contained in the
statements including, without limitation, the risks that: (1) the
Company may not be able to exercise the Option for any reason
whatsoever, (2) the TSXV, and if required, the shareholders of the
Company, may not approve the exercise of the Option for any reason
whatsoever, and (3) the royalties may not be paid or repurchased as
set forth in this news release for any reason whatsoever. Except as
required by law, the Company does not intend to update these
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.
SOURCE Discovery Harbour Resources Corp.