Saturn Minerals Inc. is pleased to announce that further to the news release dated June 30, 2015 the Company and the Joint Venture Partner, Jaguar Resources Inc. have agreed to amend the Joint Operating Agreement initially entered into May 27, 2014.
Under the terms of the initial JOA where a party has proposed a well to be drilled on the joint lands and the other party chooses not to participate, then the non-participating party would agree to farm out 100% of their respective working interest in five (5) contiguous sections, subject to a proportionate non-convertible 1% Overriding Royalty. Under the agreed to amendment the parties have agreed to amend the non-convertible Overriding Royalty to a 3% Gross Overriding Royalty (GORR) convertible into a 10% Working Interest in the five (5) contiguous sections, for the non-participating party. The non-participating party would also be entitled to participate in a proposed well on a 50/50 basis provided that its share of the proposed costs of the well are received prior to the spud date or in accordance to the JOA.
The amendment is subject to the approval of the directors of the Company and Jaguar's board of directors and debt provider.
The Company and Jaguar have also agreed that Jaguar is indebted to the Company for funds expended by the Company on the Joint Venture. Saturn and Jaguar have agreed to the amount of the default and Jaguar has agreed to reimburse Saturn upon securing funding.
Jaguar has proposed a four (4) well drilling program for the Bannock Creek property (see news release dated June 30, 2015). The proposed drilling program contains an option to drill and additional six (6) wells. The Company has received Independent Operator Notices for the drilling program and has met with Jaguar to discuss the drilling program. Jaguar has surveyed eleven (11) locations and has to date received three (3) drilling licenses on Bannock Creek. Jaguar is working to tie up personnel, equipment and supplies for the drilling program of up to six (6) wells. Saturn would elect to participate in two wells and in particular a re-drill of the 9-5 Bannock Creek location initially undertaken by the Company in May of 2015, (see news release dated June 9, 2015).
In the event that Jaguar is unable to settle the default and secure adequate funding for the proposed drilling program, the Company has made an additional proposal to Jaguar to further amend the JOA whereby the Company would continue as operator of the joint properties and grant Jaguar the above noted GORR convertible to a 10% working interest in all future operations on the joint properties.
Jaguar has been advised by the RM of Porcupine Plains that two of the selected sites, NW 27-44-08 W2 and NW 10-44-08-W2, would have restricted access for heavy equipment until freeze up due to large amounts of precipitation in the area. The Company and Jaguar have agreed to proceed with the logistics of the proposed drilling program including a site visit to the locations to determine, among other things, ground conditions, crop status and access with the objective of initiating the drilling program as soon as ground conditions permit. The Company is of the view that access to other locations would not have the same restrictions and intends to complete the site visit and meet with the RM to determine potential dates for access.