Premium Exploration Inc. is pleased to announced that it has signed an Option and Joint Venture Agreement (the "Agreement") with Logan Resources Ltd. ("Logan") which affords Logan the option to acquire up to a 75% interest in the Idaho Gold Property.
Under the terms of the Agreement, Logan can earn a 51% interest in the Property by doing the following:
- Incurring a total of $5,000,000 in exploration, permitting and development expenditures ("Exploration Expenditures") on the Property as follows:
- $1,500,000 in Exploration Expenditures on or before 12 months from the Closing Date; and
- $3,500,000 in Exploration Expenditures on or before 36 months from the Closing Date,
- Making a cash payment of $250,000 to Premium on the Closing Date.
- Providing a secured bridge loan in the amount of $250,000 to Premium (the "Bridge Loan") on the Closing Date. The Bridge Loan shall be for a term of twenty-four (24) months (the "Maturity Date") and shall bear interest at a rate of 5% per annum, calculated and payable on the Maturity Date. Logan shall have the option, exercisable at any point up to and including the Maturity Date, to apply the principal and accrued interest amount of the Bridge Loan as credit to the Exploration Expenditures (discussed below) and have such expenditure commitment reduced by a corresponding amount.
Logan may earn a 75% interest in the Property by doing the following:
- Completing the conditions required to earn the 51% interest in the Property.
- Issuing 5,000,000 common shares of Logan to Premium.
- Incurring additional Exploration Expenditures of $3,000,000 on the Property on or before the date that is 60 months from the Closing Date.
A Joint Venture will be formed between the Premium and Logan at the time that Logan earns its 75% interest in the Property (or at the time Logan earns a 51% interest in the Property and fails to satisfy the conditions required to earn a 75% interest). Once the joint venture is formed, each of Logan and Premium will be responsible for its pro rata share of expenditures on the Property thereafter.
Closing of the transaction is subject to a number of conditions, including approval of the TSX Venture Exchange and the completion of a financing satisfactory to the Company.
Source: http://www.premiumexploration.com/