Vancouver,
British Columbia / ACCESSWIRE / June 18,
2014 / Aston Bay Holdings Ltd. (TSX-V: BAY) ("Aston Bay" or the
"Company") is very pleased to announce that, further to its release
of May 26, 2014 announcing a non-binding term sheet, it has now
signed a binding Memorandum of Understanding ("MOU") with a
wholly-owned subsidiary of Antofagasta plc ("Antofagasta") to
cooperatively advance the Storm Copper and Seal Zinc projects in
the territory of Nunavut ("Storm"). The MOU gives Antofagasta the
opportunity to earn up to a 70% total interest in Storm, as well as
a path to an eventual proposed joint venture.
The terms of the MOU are
as follows:
-In Phase I,
Antofagasta may spend a minimum of US$10 million in expenditures
(inclusive of a private placement (see below)) over a period of six
years, beginning on the Effective Date of the MOU, to earn in a
50.1% interest in Storm.
-Phase II provides
that Antofagasta may spend an additional US$6 million over three
years and provide a technical report in compliance with National
Instrument 43-101 demonstrating an Indicated Resource of at least
15 million tonnes of copper-bearing rock, at a 0.2% copper cut-off,
to earn an additional 19.9% interest, for a total 70% interest in
Storm.
-Phase III will
immediately follow Phase II and provides that Antofagasta will fund
all expenditures including a minimum of US$1 million per year for
the period of two years following the completion of a possible
Feasibility Study. If Antofagasta elects not to proceed during
Phase III, Aston Bay can buy back Antofagasta's interest for 130%
of expenditures that Antofagasta has funded to that point.
Alternatively, Aston Bay can maintain its 30% interest and take
control of the technical committee or board of the operating
company by paying to Antofagasta US$1 million.
-Phase IV will
commence two years after the delivery of a possible Feasibility
Study, and both Aston Bay and Antofagasta will pay their
pro rata shares of
expenditures, according to their respective interests in the Storm
project.
"We are pleased to
have attracted a well-respected and technically-driven partner that
has a track record of building and operating copper mines,"
commented Benjamin Cox, President and CEO of Aston Bay. "Our
agreement with Antofagasta will advance the Storm project without
significant dilution expected for Aston Bay's shareholders and will
leave Aston Bay with a meaningful interest in the
project."
During Phase I, as
part of and subject to the successful completion of the Offering
described below, Antofagasta will purchase such number of
non-flow-through Units of Aston Bay at CDN$0.40 that is equal to
gross proceeds of US$250,000, subject to approval by the TSX
Venture Exchange (the "Exchange"). It is a condition
of Antofagasta's purchase of shares that Aston Bay complete a
private placement of not less than US$1 million and not more than
US$2 million. Other than the private placement subscription by
Antofagasta, no expenditures in Phases I, II or III are committed
expenditures. There is no guarantee that any phase will be
completed, and if a phase is completed, there is no guarantee that
Antofagasta will exercise its right to proceed to the next
phase.
The Storm project
hosts four zones of cohesive copper mineralization that have been
identified with more than 10,000 metres (m) of core drilling. All
of the zones are located within an area of four square kilometres
and are located along a common structural corridor. Drilling
highlights include 110m of 2.45% copper starting from surface; 56m
of 3.07% copper starting at 12m below surface at the 2750N zone;
and 49m of 1.79% copper starting from surface at the
2200N zone. Please visit Aston Bay's website
(http://astonbayholdings.com/storm-copper) for more information on
the Storm project.
"Antofagasta's
involvement underscores the prospective and compelling nature of
the Storm project," said Bruce Counts, Chief Operating Officer of
Aston Bay. "Antofagasta brings technical depth and expertise to the
project and we are eager to begin exploring the property with their
group."
Commander Resources Ltd.
("Commander") has reviewed the MOU prior to its signing. The option
agreement between Commander and Aston Bay provides a path by which
Aston Bay may purchase Commander's ownership of the Storm property
after CDN$6 million of expenditures have been made, for either
CDN$15 million in cash or 20% of Aston Bay's market capitalization
at that time.
Aston Bay and
Antofagasta must enter into an earn-in agreement by December 1,
2014. If no earn-in Agreement is entered into by December 1, 2014,
the MOU will terminate and Aston Bay will be required to refund
certain expenditures to Antofagasta.
Private Placement
In connection with
the MOU transaction and subject to Exchange approval, the Company
will conduct a non-brokered private placement (the "Offering") of
non-flow-through units of Aston Bay (the "NFT Units") at a price of
CDN$0.40 per NFT Unit, and flow-through units (the "FT Units") at a
price of CDN$0.45 per FT Unit, for gross proceeds of up to
US$2,000,000.
Each NFT Unit will
consist of one common share and one common share purchase warrant
(the "NFT Warrant"). Each NFT Warrant will be exercisable into one
common share for a period of 18 months from closing of the
Offering, at a price of CDN$0.60 per share.
Each FT Unit will
consist of one "flow-through" common share and one-half common
share purchase warrant. Each such whole common share purchase
warrant (the "FT Warrant") will be exercisable into one common
(non-flow-through) share for a period of 18 months from closing of
the Offering, at a price of CDN$0.675 per share.
FT Warrants and NFT
Warrants will be subject to the Company's right to accelerate the
expiry of the same to within 30 calendar days of notice thereof if
the daily volume weighted average trading price of the common
shares of the Company on the Exchange is equal to or exceeds
CDN$1.20 over a period of 20 consecutive trading days between the
date that is four months following the closing of the Offering and
the date on which the FT Warrants and/or the NFT Warrants, as
applicable, would otherwise expire. Such notice is to be given
within five trading days of such 20-day period.
The Company intends to
use the proceeds of the Offering to conduct exploration on the
Company's Storm Project, in accordance with the MOU described
above. The Company may pay finder's fees in connection with the
private placement.
Qualified Person
The content of this news
release and the technical information that forms the basis for this
disclosure has been prepared under the supervision of Michael
Dufresne, M.Sc., P.Geol., who is the Qualified Person as defined by
NI 43-101 and a consultant to Aston Bay.
About
Aston Bay Holdings
Aston Bay Holdings Ltd.
(TSX-V: BAY) is a publicly traded mineral exploration company
focused on the 345,033-acre Storm Property located on northwest
Somerset Island, Nunavut. The property hosts the Storm Copper and
Seal Zinc prospects. Aston Bay holds the right to earn or buy up to
a 100% undivided interest in the Storm Property from Commander
Resources Ltd. (TSX-V: CMD).
On behalf of the Board
of Directors,
Benjamin Cox, Chief
Executive Officer
Telephone: (360)
262-6969
For further
information about Aston Bay Holdings Ltd or this news release,
please visit our website at
www.astonbayholdings.com.
About
Antofagasta
Antofagasta
plc is a Chilean-based copper mining company with significant
by-product production and interests in transport and water
distribution. The company has four operating copper mines: Los
Pelambres, Esperanza, El Tesoro and Michilla, which produced
721,200 tonnes of copper, 9,000 tonnes of molybdenum and 293,800
ounces of gold in 2013. Antofagasta plc also has exploration and
evaluation programmes in North America, Latin America, Europe,
Asia, Australia and Africa. The company is listed on the London
Stock Exchange and is a constituent of the FTSE-100
Index.
Neither the TSX Venture Exchange Inc. 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.
This
news release contains certain statements that may be deemed
"forward-looking statements". Forward-looking statements are
statements that are not historical facts and are generally, but not
always, identified by the words "expects", "plans", "anticipates",
"believes", "intends", "estimates", "projects", "potential" and
similar expressions, or that events or conditions "will", "would",
"may", "could" or "should" occur. Although the Company believes the
expectations expressed in such forward-looking statements are based
on reasonable assumptions, such statements are not guarantees of
future performance and actual results may differ materially from
those in forward-looking statements. Forward-looking statements are
based on the beliefs, estimates and opinions of the Company's
management on the date the statements are made. Except as required
by law, the Company undertakes no obligation to update these
forward-looking statements in the event that management's beliefs,
estimates or opinions, or
other
factors, should change.
THIS
PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR
DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED
HEREIN IN THE UNITED STATES. THESE SECURITIES HAVE NOT BEEN, AND
WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE
OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS
REGISTERED OR EXEMPT THEREFROM.
THIS
PRESS RELEASE IS NOT FOR DISTRIBUTION IN THE UNITED STATES
OR TO
U.S. NEWS AGENCIES
SOURCE: Aston Bay Holdings Ltd.
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