ROUYN-NORANDA, QC,
Feb. 4, 2019 /CNW Telbec/ - X-Terra Resources Inc.
(TSXV: XTT) (FRANKFURT: XTR) ("X-Terra") is pleased to
announce that it has reached an agreement with NBGold Inc. (the
"Optionor") to modify the terms and conditions of its
previously-announced exploration and option agreement (the
"Option Agreement") dated November 16, 2018 for the
acquisition of 34 mining claims comprising the Grog, Rim, Dome
and Bonanza mining properties (the "Properties") which are
located approximately 30 kilometres (direct flight) south west of
the town of Campbellton in the
Province of New Brunswick,
Canada.
Given the difficult market conditions prevailing in the capital
market for small resources exploration companies at the end of 2018
and given the strong negative reaction of certain X-Terra's
shareholders and potential investors to the significant dilution
effect of the option on X-Terra's capital, X-Terra engaged into
discussions with the Optionor and Tim
Lavoie, one of the previous optionors pursuant to the Option
Agreement, to amend the terms and conditions of the Option
Agreement.
On February 1, 2019 X-Terra and the Optionor have
entered into two sperate amended and restated exploration and
option agreements for the Properties (collectively, the
"Agreements") replacing the Option Agreement, pursuant to
which X-Terra now has an option (the "Option") to acquire a
70% undivided ownership interest (instead of a 100%) in the
Properties. One of the amended and restated exploration and option
agreement is for the Grog mining property (the "Grog
Property") while the other one is for the Rim, Dome and
Bonanza mining properties (collectively, the "Northwest
Property").
"We are very enthusiastic to have reached an agreement with
NBGold to modify the terms and conditions of the initial option
which will now allow X-Terra to move forward with this
project. The revised terms and conditions of the option will
still allow X-Terra to acquire a significant interest in the
Properties and will be less dilutive for X-Terra's shareholders,
less onerous for X-Terra and in line with market expectations" said
Michael Ferreira, President and
Chief Executive Officer of X-Terra.
X-Terra completed its due diligence over the Properties in
October 2018 which confirmed the
potential of a large disseminated gold system at Grog Brook.
Samples were collected over a length of 390 non-continuous metres
where results up to 2.94 g/t Au were obtained. The best gold values
were obtained over the Northwest Property (comprising the former
Dome, Bonanza and Rim properties) and include 1,205.06 g/t Au at
the Rim sector of the Northwest Property, 149.97 g/t Au at Bonanza
and 47.88 g/t Au at the Dome sector of the Northwest Property.
Additionally, the technical team decided to sample the Rim vein
at regular intervals at the surface over 19.9 metres to confirm if
gold mineralization is continuous. The average of the nine grab
samples returned 125.44 g/t Au over the 19.9 metres (See X-Terra
press release dated December 5, 2018
for details).
Pursuant to the Agreements, X-Terra may now acquire a 70%
undivided ownership interest in the Properties over a four-year
period by making the following payments and incurring mining
exploration expenditures as follows:
- by making cash payments to in the aggregate amount of
$250,000, a $50,000 of which is payable on the initial
payment date, which is expected to occur on or before
February 28, 2019 (the "Closing Date");
- by issuing an aggregate of 7,000,000 common shares of X-Terra
(the "Shares") to the Optionor, 2,000,000 of which will
be issued on the Closing Date and the balance will be issuable over
a period of 48 months from the signature date of the Option.
Agreement;
- by issuing an aggregate of 2,000,000 common share purchase
warrants of X-Terra (the "Warrants") to the Optionor, of
which 400,000 Warrants exercisable at price of $0.15 per share for a period of 18 months will be
issued on the Closing Date. The balance of Warrants will be
issuable over a period of 48 months from the signature date of the
Agreements (exercisable over 18 months upon issuance, all at a
price per share equal to the greater of (i) $0.125 and (ii) the Market Price (as such
term is defined in Policy 1.1 of the TSX Venture Exchange) at the
time of issuance). Each Warrant will entitle the holder
thereof to acquire one common shares of X-Terra; and
- by incurring mining exploration expenditures in an aggregate
amount of $3,100,000 over a period of
48 months on the Properties.
Upon completing all of the payments mentioned above, X-Terra
will have a 70% ownership interest in the Properties and will enter
into joint venture agreements dealing with the Properties with the
Optionor. Three of the mining claims comprising the Grog
Property are subject to a 1% net smelter return royalty payable to
the former owner of the Grog Property. The mining claims comprising
the Northwest Property are subject to a 2% net smelter return
royalty payable to the former owners of the Northwest Property. The
Optionor may, at any time, purchase 50% of the net smelter return
royalty from the former owners of the Northwest Property for
$1 million and the remaining balance
for $10 million. All royalty
payments on the Properties will be assumed by the Optionor.
Following the signature of joint venture agreements, in the event
the Optionor's interest falls below 10% in the Grog Property or the
Northwest Property, the Optionor will relinquish its interest in
such property for a 3% net smelter return royalty on such property
and in such case, the Optionor will assume all royalty payments to
the former owners of Properties. X-Terra will then have the
right to purchase, at any time, 50% of the net smelter return
royalty from the Optionor for $1.5
million.
The transactions, as amended by the Agreements are subject to
regulatory approval, including that of the TSX Venture Exchange and
are subject upon the closing of an equity private placement by
X-Terra for a minimum amount of $1.0 million. Any failure by X-Terra
to obtain regulatory approval and completing the foregoing equity
financing would result in the Agreements being terminated.
About X-Terra Resources Inc.
X-Terra Resources is a resource company focused on acquiring and
exploring precious metals and energy properties in Canada.
Forward-Looking Statements
This news release contains statements that may constitute
"forward-looking information" within the meaning of applicable
Canadian securities legislation. Forward-looking information may
include, among others, statements regarding the future plans,
costs, objectives or performance of X-Terra, or the assumptions
underlying any of the foregoing. In this news release, words such
as "may", "would", "could", "will", "likely", "believe", "expect",
"anticipate", "intend", "plan", "estimate" and similar words and
the negative form thereof are used to identify forward-looking
statements. Forward-looking statements should not be read as
guarantees of future performance or results, and will not
necessarily be accurate indications of whether, or the times at or
by which, such future performance will be achieved. No assurance
can be given that any events anticipated by the forward-looking
information will transpire or occur, including the acquisition of
the Properties, the development of the Properties, or if any of
them do so, what benefits X-Terra will derive from the
Properties. Forward-looking information is based on
information available at the time and/or management's good-faith
belief with respect to future events and are subject to known or
unknown risks, uncertainties, assumptions and other unpredictable
factors, many of which are beyond X-Terra Resources' control. These
risks, uncertainties and assumptions include, but are not limited
to, those described under "Financial Instruments" and "Risk and
Uncertainties in X Terra's Annual Report for the fiscal year ended
December 31, 2017, a copy of which is
available on SEDAR at www.sedar.com, and could cause actual events
or results to differ materially from those projected in any
forward-looking statements. X-Terra does not intend, nor does
X-Terra undertake any obligation, to update or revise any
forward-looking information contained in this news release to
reflect subsequent information, events or circumstances or
otherwise, except if required by applicable laws.
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 the release.
SOURCE X-Terra Resources Inc.