Benton Resources Inc. is pleased to announce that it has entered into a letter of intent with Nordmin Engineering Ltd. to advance towards production four of the six gold deposits at the Company's Cape Ray project located in southwest Newfoundland, should the economic viability of the project be determined.
The 04, 41, 51 and Windowglass Hill deposits are included in the LOI while the Isle Aux Morts and Big Pond deposits will be retained 100% by Benton. Pursuant to the LOI, Benton and Nordmin will form a joint venture pursuant to which Nordmin will have the right to earn up to a 50% interest in the Project through a series of expenditures and services to be provided.
Upon signing the LOI, Benton will form a wholly-owned subsidiary, ("SubCo B" for illustrative purposes) and transfer 100% of Benton's property rights in the Project to SubCo B. Nordmin may then earn up to 50% of the Project held by SubCo B by completing a series of work commitments and project milestones which advance the Project towards production as follows:
- Benton will lead the exploration effort for the Project which will be funded by Nordmin up to the completion of the Feasibility Study. This includes any infill drilling to allow the deposits to be brought up to National Instrument 43-101 status ("NI 43-101"). The necessity for further exploration will be determined and approved by the management committee;
- Nordmin will, to earn a 5% interest, make a $250,000 cash payment in two tranches to SubCo B which will go towards the current exploration program. The first tranche of $125,000 will be advanced upon signing of the LOI and the second tranche of $125,000 within six months of signing;
- Nordmin will, by August 31, 2015 to earn a further 15% interest, fund and provide the services required to complete NI 43-101 resource estimates for the 04, 41, 51, and Windowglass Hill deposits, produce a resource model, a preliminary economic assessment (PEA), complete a detailed assessment of the Geology, Mining, Metallurgy, Environmental, Engineering, Construction, Economics and Schedule for the Project;
- Nordmin will, by August 31, 2016 to earn a further 10% interest, complete the Environmental Assessment and Impact reviews, and secure the necessary permits for a mine, mill and related plant in order for the Project to move forward;
- Nordmin will, by August 31, 2017 to earn a further 10%, complete a feasibility study for the Project (detailing and advancing all of the same issues within the PEA);
- Nordmin will, by August 31, 2018 to earn a further 10% interest, complete detailed design of the mine, mill and related plant and work to arrange a minimum of 50% of the Project financing;
- Nordmin will assume operatorship of the Project upon signing;
- Nordmin will provide the procurement, project and construction management for the Project, including commissioning and start-up. The costs and fees associated with this effort will be part of the Project financing;
- Nordmin must spend a minimum of $4.5 million of expenditures and equivalent services, with any excess going towards Project development;
- Should Nordmin fail to earn a 50% interest, operatorship will revert back to Benton;
- Should Nordmin not participate in the Project development on a pro-rata basis after the earn-in period, Nordmin will suffer a standard dilution to their pro-rata interest - such clause also applies to Benton; and
- The intent is that the work proposed within the LOI will be completed in a minimum of three (3) years and a maximum of five (5) years, dependent upon market conditions or other outside and uncontrollable situations.
A formal agreement will be completed within 30 days of the signing of the LOI. If a formal agreement is not completed within the 30 day period, either party may terminate the LOI.
Benton will continue to evaluate the Company's 100% owned Isle Aux Morts and Big Pond deposits as well as investigate other gold mineralized showings such as the Sleeper Gold Zones located between the Big Pond and Windowglass Hill deposits.
Stephen Stares, Company President and CEO stated, "This LOI is monumental for Benton shareholders and the future of the Company. Attracting a partner with such a high level of technical expertise and experience in mine development as Nordmin possesses is a testament to the quality of the Cape Ray asset and its development potential. Our team has worked hard to target, acquire and consolidate the Cape Ray land position in order to bring in a quality partner with the skill set to fully develop the project. We are very excited to work with Nordmin with hopes of becoming a future gold producer in Canada".
Chris Dougherty, P.Eng., President of Nordmin commented, "Nordmin is exceedingly pleased that we have been able to establish this partnership with Benton. This is, to the best of our knowledge, the first arrangement of this type made in the mining industry here in Canada. By providing the engineering, construction and operational know-how to Benton's renowned expertise in prospecting, exploration, and geological development, we have established a formidable team that could become a model for other junior explorers. Creativity brings opportunity, and we are very pleased to be part of this opportunity".