Churchill Resources Inc. (“Churchill” or the “Company”) is delighted to declare that it has exercised an existing option to gain a 100% interest in some mineral properties with likely diamond targets and likely nickel and lithium targets situated immediately west of the town of White River, Ontario (the “Properties”).
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On February 9th, 2017, the Company’s subsidiary entered into an option agreement (the “Option Agreement”) with Rudolph Wahl and Frederick Lowndes (together known as, the “Vendors”) to gain a 100% interest in the Properties. The interest is issued with a 2.0% net smelter royalty (“NSR”) on minerals and metals and a gross over-riding royalty (“GOR”) of 3.0% on diamonds identified on the Properties in favor of the Vendors (the “Transaction”).
1.0% of the NSR and 1.5% of the GOR may be bought back by the Company for $1.0 million and $2.0 million, respectively. The Company also holds the first right to the other royalties.
Recently, the Vendors transferred 816 mineral claims to Churchill Diamond Corporation, a subsidiary of Churchill, which bring the total property to 1,224 claims that consist of White River Project of the Company with an area of 28,700 ha.
Since getting into the Option Agreement, Churchill has issued a total of 2,850,000 common shares (“Common Shares”) to the Vendors and gained the needed cumulative exploration expenditures pertaining to the Properties. In 2017, Churchill conducted one season of exploration on the project since venturing into the Option Agreement.
We are very pleased to exercise the option at White River which features known diamond-bearing kimberlitic rocks in an extremely attractive setting just south of the Trans-Canada Highway between the towns of Marathon and White River. The property is intruded by a number of mafic-ultramafic dykes swarms including kimberlitic dykes, of which some may have magmatic nickel-copper-cobalt potential given the Tyco Project of Palladium One Mining Inc. some 30km north.
Paul Sobie, CEO, Churchill Resources Inc.
Sobie continues, "Several of the Companies’ 2017 till samples returned highly anomalous numbers of sulfide grains which will be followed up when exploration activities resume. In addition, we’ll assess the hard rock pegmatitic lithium potential of the property."
With regard to the exercise of the option to gain the Properties, Churchill has decided to settle an unpaid debt in the amount of $50,000 (the “Debt”), which denotes an annual advance royalty owning to the Vendors as per the Option Agreement terms. This is done by issuing a total of 625,000 Common Shares at a cost of $0.08/Common Share to the Vendors (the “Shares for Debt Transaction”).
To reserve the cash of the Company for ongoing operations, the Board of Directors has decided to settle the unpaid Debt by issuing Common Shares for the benefit of the Company.
Including the earlier approval of the TSX Venture Exchange (“TSXV”), closing of the Shares for Debt Transaction is subject to customary closing conditions. The Company wants to close the Shares for Debt Transaction as early as possible after receiving approval from the TSXV. From the issuance date, a statutory hold period of four months and one day will be taken by the Common Shares that will be issued after the Shares for Debt Transaction.