Osisko Mining Corporation,(TSX:OSK)(FRANKFURT:EWX) has announced that it has signed a Letter of Intent with Sparton Resources Inc. (SRI – TSX.V) to option Sparton's West Hammond Contact and Clement Lake gold properties, as well as six surrounding wholly-owned Sparton claims, all located adjacent to Osisko's Hammond Reef property near Atikokan, Ontario.
Osisko has a working right and exclusive option to acquire up to a 70% undivided interest in Sparton's gold Properties under the following terms:
- In order to maintain the option in good standing and acquire a 60% undivided interest in the Properties (the "First Option"), Osisko shall:
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Upon acquiring a 60% interest, Osisko will have the option of earning an additional 10% interest (aggregate 70% interest, or the "Second Option") by either expending an additional $6,000,000 on the Properties or funding and delivering a bankable feasibility study on or before November 10, 2016.
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Osisko may, at its sole discretion, accelerate and apply exploration and development expenditures to future years' expenditures and, accordingly, the First or Second Options may be exercised sooner.
Osisko will be the manager of the project. A management committee will be formed during the Option Period with two representatives from each party. This management committee will be responsible for reviewing programs submitted by Osisko and for approving and evaluating the results of all programs. In the event of a tie, Osisko shall have the casting vote during the Option Period. Upon acquiring a 60% or a 70% interest in the Property, a joint venture would be formed between Osisko and Sparton.
Robert Wares, Executive Vice-President and COO of Osisko, stated: "Osisko is very pleased to have the opportunity to acquire a majority interest in the Sparton gold properties. Sparton has identified several significant gold zones on these properties that offer additional potential for bulk minable gold deposits. This represents a strategic acquisition for Osisko that is located adjacent to the Hammond Reef project, where sixteen drills are currently defining and expanding the Hammond Reef gold resource. Osisko will finalize the review of available exploration data on Sparton's properties with the objective of testing favorable structures during the winter months."
The Sparton common shares to be acquired by Osisko will represent approximately 2.3 % of the outstanding common shares of Sparton before giving effect to the exercise of the warrants and approximately 3.4 % of the outstanding common shares of Sparton after giving effect to the exercise of the Osisko warrants (but before the exercise of any other warrants or convertible securities of Sparton). Osisko will acquire the Sparton common shares and warrants for investment purposes. Osisko has no present intention to increase its holdings in Sparton although it will evaluate the investment in Sparton and whether to increase or decrease its shareholdings in response to market conditions, the business and prospects of Sparton and other factors. The private placement is exempt from the prospectus and registration obligations as it is for an amount greater than $150,000.
Mr. Robert Wares, P. Geo. and Executive Vice-President of Osisko, is the Qualified Person who has reviewed this news release and is responsible for the technical information reported herein.
Source: Osisko Mining Corporation