Salmon River concludes agreement to amend terms for acquisition of
Treppo Grande shares
VANCOUVER,
Oct. 25, 2012 /CNW/ - Salmon River Resources Ltd.
(TSX.V: SAL) (together with its subsidiaries individually
and jointly referred to as "Salmon
River" or the "Company") is pleased to announce
that it has concluded negotiations to amend the terms
of its acquisition of all the outstanding shares of Treppo
Grande Iron Pty. Ltd. ("TGI"), a private Australian company whose
principal asset is a 100% interest in five exploration tenements
referred to as the Treppo Grande Iron Ore Project (the "Project").
The tenements cover an area of approximately 403 sq. km and are
located approximately 210 km northwest of Kalgoorlie in
Western Australia, in the Yilgarn
region, an area with several operating iron ore mines. The
tenements include Mt. Manning South (E77/1208), Mt. Manning North
(E77/1209), Lake Barlee (E30/397), Riverena (E30/379) and Menzies
(P29/1895).
Under the terms of the revised Sale Agreement
(the "Agreement"), the Purchase Price for TGI shares has been
amended from the originally agreed A$100
million cash purchase price to provide for payments over
time as follows:
- Non-refundable Pre-Completion Payments of A$2 million, already paid by the Company
previously;
- A further non-refundable Pre-Completion Payment of A$4 million payable on or before 15 December 2012;
- A Completion Payment of $A21
million payable on or before 15 March
2013;
- Issuance of Salmon River
shares equivalent to 5% of the shares outstanding as at the
Completion Date and providing certain pre-emptive rights
thereafter.
In addition to the payments above, the Company
has also agreed to the following additional compensation to the
Vendor of the TGI shares on or after commencement of commercial
production:
- At commencement of commercial production, an initial
A$10 million to the Vendor;
- At commencement of commercial production (or any time
thereafter), for each additional 100 million tonnes of JORC
compliant iron ore resource grading 50% Fe or more in excess of 100
million tonnes, an additional amount of $10
million per 100 million tonnes of such JORC compliant iron
ore, up to a maximum aggregate of A$ 50
million for 500 million tonnes of ore or more;
- Following commencement of commercial production, a Royalty of
A$1.00 per dry metric tonne of all
iron ore produced and sold from the Tenements.
Salmon River
has also agreed to incur not less than $2,500,000 in exploration expenditures within the
Tenements by no later than 15 March
2013 based on a plan to be approved by the Vendor no later
than 31 October 2012.
Doug Betts,
Chairman and Acting CEO commented, "We continue to believe in the
significance of the Treppo Grande Project to the Company. The
Amending Agreement provides additional time for Salmon River to continue with its exploration
program and to complete financing arrangements necessary to ensure
the continued success of the Project. The revised terms also
provide a better basis for Salmon
River to secure future funding for development of what we
believe is a project with significant potential."
As noted previously, during the last several
months, Salmon River has also been
involved in extensive negotiations with a number of strategic and
financial investors regarding funding for payments under the terms
of the Acquisition Agreement and for the furthering of the Treppo
Grande Project. The Company continues discussions with these
potential investors.
Recent volatility in iron ore prices has created
uncertainty in the marketplace, however the Company remains
confident of the ultimate success of the project, especially given
the potential of the Treppo Grande Iron Project and the improved
acquisition terms. The TGI Sale Agreement and any financing
proposals will be subject to approval by the TSX Venture Exchange
and may require shareholder approvals. There can be no
assurance that these discussions will be successfully completed or
required approvals obtained.
ABOUT SALMON RIVER RESOURCES
LTD.
Salmon River Resources Limited (TSXv:
SAL) is a mineral exploration company engaged in the exploration
for and development of commercial deposits of iron ore in
Western Australia. It exercised
its option to acquire five tenements in the Yilgarn region of
Western Australia including the
Treppo Grande iron ore project, approximately 210 kilometres
northwest of Kalgoorlie, comprising three tenements covering
approximately 396.7 km2. Completion of the acquisition
of the tenements is subject to certain conditions, including cash
payments and issuance of shares to the Vendor. For further
information see our website at www.salmonriver.com.au.
Forward-Looking Statements:
This press release contains forward-looking
statements that are based on the beliefs of management and reflect
Salmon River's current
expectations. This press release relates to the Exercise of
the Treppo Grande Option, further exploration and future financing
requirements. The forward-looking statements are based on
certain assumptions, which could change materially in the future,
including the assumption that the current negotiations will lead to
definitive agreements, that the transactions and financings
contemplated herein will be completed, that Salmon River will be able to complete on its
exercise of the Treppo Grande option and that the Treppo Grande
property will ever be developed. By their nature,
forward-looking information involves known and unknown risks,
uncertainties and other factors that may cause actual results,
performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by
the forward-looking information. Such factors include the
risk that the definitive agreements contemplated may not be
completed, that Salmon River may
not complete the financings in the amounts contemplated and that
the Company may not complete on its exercise of the Treppo Grande
option. There can be no assurance that forward-looking
information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
statements. Accordingly, investors should not place undue
reliance on forward-looking information. Forward-looking
information is provided as of the date of this press release, and
the Company assumes no obligation to update or revise them to
reflect new events or circumstances, except as required in
accordance with applicable laws.
Statements in this release that are
forward-looking statements are subject to various risks and
uncertainties concerning the specific factors disclosed under the
heading "Risk Factors" and elsewhere in the Company's periodic
filings with Canadian securities regulatory authorities. Such
information contained herein represents management's best judgment
as of the date hereof based on information currently
available. The Company does not assume the obligation to
update any forward-looking statement.
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 Salmon River Resources Ltd.