Benton Resources Inc. is pleased to announce that further to its press release dated October 6, 2014, it has fully executed its final Option and Joint Venture agreement with Nordmin Engineering Ltd. to advance four of the six gold deposits towards production at the Cape Ray project located in southwest Newfoundland.
The 04, 41, 51 and Windowglass Hill deposits (the "Project") are included in agreement while the Isle Aux Morts and Big Pond deposits will be retained 100% by Benton. Pursuant to the Agreement, Benton and Nordmin will form a joint venture pursuant to which Nordmin will earn a 50% interest in the Project through a series of expenditures and services to be provided.
Under the terms of the Agreement, Benton will form a 100% 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 is well underway advancing 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 Projects 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.
Stephen Stares, Company President and CEO stated, "Executing the final agreement with Nordmin is a extraordinary milestone for Benton shareholders, the advancement of the Cape Ray project and the future of the Company. With technical work well underway, Benton is hopeful that the Cape Ray deposits become the site of production in the future. Our team has worked hard to target, acquire and consolidate the Cape Ray land position and to bring in a quality partner with the skill set to fully develop the project. We are very excited to work with Nordmin."
Chris Dougherty, P.Eng., President of Nordmin commented, "Moving this effort forward is something that we at Nordmin are very excited about. The Cape Ray project has tremendous potential, and we are working hard with our partners to develop a strategy to move this effort forward in an efficient and expeditious way. Our goal is production, and we are now focusing on that goal."