VANCOUVER, March 4 /PRNewswire/ - Guyana Frontier Mining
Corp. ("Guyana Frontier", formerly
Shoreham Resources Ltd.) has entered into a definitive private
placement and property rights agreement (the "Definitive
Agreement") with Teck Resources Limited ("Teck") of Vancouver, B.C., pursuant to which Teck has
purchased 7,000,000 units of Guyana Frontier, each a "Unit", at a
price of $0.35 per Unit for total
gross proceeds to Guyana Frontier of $2,450,000, and Guyana Frontier has granted Teck certain
rights in respect of its exploration properties located in
Guyana, South America. The
Definitive Agreement supersedes and replaces the letter agreement
between Guyana Frontier and Teck first announced by Guyana Frontier
in a news release dated January 24,
2011.
Private Placement
Pursuant to the Definitive Agreement, Guyana
Frontier issued 7,000,000 Units to Teck on a private placement
basis at a price of $0.35 per Unit,
to raise gross proceeds to Guyana Frontier of $2,450,000 (the "Placement") Each Unit
consists of one common share of Guyana Frontier and one common
share purchase warrant (a "Warrant") exercisable to acquire an
additional common share at an exercise price of $0.60 per common share for a period of two years
from the closing date of the Placement (the "Closing
Date").
All securities issued in the Placement will be
subject to a hold period under applicable securities laws which
expires four months and one day following the Closing
Date.
Technical Committee
Guyana Frontier and Teck have agreed to form a
technical committee to provide a forum to allow Teck the
opportunity to contribute to the development of continuing programs
on Guyana Frontier's properties, with Guyana Frontier having final
approval of all work.
Teck Property Rights
In consideration of the Placement:
- Guyana Frontier has agreed to spend a minimum of 80% of the
proceeds of the Placement on further exploration of its Marudi
Mountain property;
- Guyana Frontier has granted Teck the right to maintain its
percentage shareholding in Guyana
Frontier by participating in future equity financings (at a level
equal to Teck's then shareholding) for a period of two years, to be
extended for a period of two additional years (four years total)
should Teck exercise the Warrants;
- Guyana Frontier has granted Teck a right of first offer with
respect to its interest in the Marudi Mountain property;
- Guyana Frontier has agreed to grant Teck a right of first offer
with respect to its interest in the Black Banana and Sardine Hill
properties if Mulgravian Ventures Corp. ("Mulgravian") does not
exercise its option to earn a working interest from Guyana
Frontier; and
- Guyana Frontier has granted Teck the right to acquire a 51%
interest in Guyana Frontier's
interest in one of a number of Guyana Frontier's other Guyana properties (collectively, the "B
Properties"), on the terms set out below.
B Property Option
In consideration of the placement, Guyana
Frontier has granted Teck the exclusive option (the "B Property
Option") to acquire a 51% interest in Guyana Frontier's interest in one of the B
Properties. Upon the exercise of the B Property Option in
respect of any one of the B Properties, the B Property Option will
terminate and Teck will have no further rights in respect of the
other B Properties.
The B Properties consist of the Five Star,
Whana, Aunama, Masawaki, Arawini and Otomung properties. Guyana
Frontier's interest in each of the B Properties is subject to
existing option agreements with Mulgravian.
Teck may elect to exercise the option with
respect to a particular B Property up to the earlier of
December 31, 2014, or 90 days after
the date Guyana Frontier delivers a notice of completion of a
minimum of $1,500,000 of exploration
expenditures on such B Property, calculated from the date of
execution of the letter agreement, together with all the
exploration results thereof. Expenditures shall include
expenditures incurred by Mulgravian on such B Property.
If Teck wishes to exercise the B Property
Option, it must exercise, or have exercised, all of the Warrants
for gross proceeds of $4,200,000 to
Guyana Frontier within two years of the Closing Date.
If Teck elects to exercise the B Property Option
with respect to a B Property, it may acquire an undivided 51%
interest in Guyana Frontier's
interest in such property as follows:
- If the B property is under option by Guyana Frontier to
Mulgravian, and Mulgravian ceases to solely finance exploration, by
Teck financing the first $3,000,000
of required contributions of Guyana Frontier under the joint
venture with Mulgravian in respect of such B Property;
- If the B Property is not under option to a third party, by
financing the next expenditures on the property equal to 2.5 times
Guyana Frontier's or Mulgravian's expenditures on the B Property
from the date of the Letter Agreement, subject to a minimum of
$1,500,000 and a maximum of
$4,250,000 (being 2.5 times the
$1,500,000 of expenditures required
for the delivery of notice by Guyana Frontier); and
- Upon completion of the above expenditures on the B Property and
delivery of notice of such to Guyana Frontier, Teck shall have
earned a 51% interest in Guyana
Frontier's interest in the B Property. Following the exercise of
the B Property Option, Guyana Frontier and Teck will participate in
a joint venture in respect of their collective interest in the B
Property, which interest may be subject to the prior interest of
Mulgravian, if any.
A finder's fee of 300,000 common shares of
Guyana Frontier is payable to Mulgravian as finder for the
Placement.
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.
Forward Looking Statements
This news release contains forward-looking
statements that are based on Guyana Frontier's current expectations
and estimates. Forward-looking statements are frequently
characterized by words such as "plan", "expect", "project",
"intend", "believe", "anticipate", "estimate", "suggest",
"indicate" and other similar words or statements that certain
events or conditions "may" or "will" occur, and include, without
limitation, statements regarding Guyana Frontier's plans with
respect to the exploration and development of its projects. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors that could cause actual events or
results to differ materially from estimated or anticipated events
or results implied or expressed in such forward-looking statements.
Any forward-looking statement speaks only as of the date on which
it is made and, except as may be required by applicable securities
laws, Guyana Frontier disclaims any intent or obligation to update
any forward-looking statement, whether as a result of new
information, future events or results or otherwise. Forward-looking
statements are not guarantees of future performance and accordingly
undue reliance should not be put on such statements due to the
inherent uncertainty therein.
SOURCE Guyana Frontier Mining Corp.