THUNDER BAY, ON,
Feb. 19, 2014 /CNW/ - Kesselrun
Resources Ltd. (TSXV:KES) ("Kesselrun") is pleased to announce that
Kesselrun has completed the expenditures required to acquire an
undivided 10% non-diluting interest in certain mining claims,
mining patents and mining leases comprising the Goldlund Project
located near the town of Sioux Lookout,
Ontario (please see Kesselrun press release dated
November 20, 2013).
Kesselrun was required to incur aggregate exploration expenditures
on the property of $1,000,000 by
December 31, 2013.
The parties will enter into a joint venture
agreement pursuant to which Goldlund shall incur all further
expenditures on the property until it reaches commercial
production. After the commencement of commercial production,
Kesselrun and Goldlund will be obligated to contribute funds to
approved programs and budgets of the joint venture in proportion to
their respective participating interests. Goldlund will be the
initial operator of the joint venture.
At any time prior to December 31, 2015, Kesselrun shall be entitled to
transfer such interest back to Goldlund upon 15 days prior written
notice in exchange for the issuance to Kesselrun of senior
unsecured convertible debentures (the "Convertible Debentures") of
the parent company of Goldlund ("Parentco") in the principal amount
of $2,000,000. Further, at any time
after December 31, 2014 and on or
prior to December 31, 2017, Goldlund
shall have the right to require that Kesselrun transfer such
interest back to Goldlund (the "Back-In Right") upon 30 days prior
written notice to Kesselrun, in exchange for the issuance to
Kesselrun of Convertible Debentures of Parentco in the principal
amount of $2,000,000. Goldlund
shall also be entitled to exercise the Back-In Right at any time
after the earlier of (a) Kesselrun acquiring its 10% interest in
the property, and (b) January 1,
2015, in the event that Parentco is party to a business
combination transaction, upon 30 days prior written notice to
Kesselrun and payment to Kesselrun of either $2,000,000 in cash, or at the option of Goldlund,
Convertible Debentures of Parentco in the principal amount of
$2,000,000.
The Convertible Debentures of Parentco will
mature on the date which is seven years following their date of
issuance, and will earn interest at a fixed rate of 10% per annum
compounded annually. At the election of Parentco, up to 50%
of the interest may be paid by the issuance of additional
Convertible Debentures of Parentco. In the event of a
liquidity event, the principal amount and all accrued and unpaid
interest will automatically convert to common shares of Parentco or
the subsidiary of Parentco which is the subject of the liquidity
event, at a conversion price per common share that is equal to 50%
of the value of each common share as determined in the context of
such liquidity event. A liquidity event includes any of: a)
an initial public offering of common shares or units of Parentco or
a subsidiary of Parentco, b) a reverse take-over by a publicly
listed company of all the issued and outstanding shares of Parentco
or a subsidiary of Parentco, or c) the sale of a majority of the
issued and outstanding common shares of Parentco or a subsidiary of
Parentco representing a change of control. The Convertible
Debentures of Parentco will be subject to certain restrictions on
transfer, and a right of first refusal in favour of Parentco.
Subject to certain exceptions, the Convertible Debentures of
Parentco will not be redeemable prior to the third (3rd)
anniversary of the date of issuance thereof unless agreed to by the
holder, after which they will be redeemable, in cash, at the option
of Parentco at the principal amount plus all accrued and unpaid
interest.
About Kesselrun Resources Ltd.
Kesselrun Resources is a Thunder Bay,
Ontario-based mineral exploration company focused on growth
through property acquisitions and discoveries. Kesselrun's
management team possesses strong geological and exploration
expertise with particular experience in Northwest Ontario. For more information about
Kesselrun Resources, please visit www.kesselrunresources.com.
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 news release.
Forward Looking Statements - Certain
information set forth in this news release may contain
forward-looking statements that involve substantial known and
unknown risks and uncertainties. These forward-looking statements
are subject to numerous risks and uncertainties, certain of which
are beyond the control of Kesselrun, Goldlund and Parentco,
including, but not limited to the impact of general economic
conditions, industry conditions, volatility of commodity prices,
dependence upon regulatory approvals, the execution of definitive
documentation, the availability of financing and exploration risk.
Readers are cautioned that the assumptions used in the preparation
of such information, although considered reasonable at the time of
preparation, may prove to be imprecise and, as such, undue reliance
should not be placed on forward-looking statements.
SOURCE Kesselrun Resources Ltd.