Castillian Resources Corporation (TSX VENTURE:CT) has announced that all conditions of the previously announced letter agreement with Kagera Nickel Limited (ASX:KNL) have been met.
Kagera Nickel has acquired a 100% interest in Castillian's Kagera Nickel Sulphide Project ("Kagera Project") located in northwest Tanzania. The Kagera Project comprises mineral rights to six properties totaling 860km2 in the highly prospective Kabanga-Musongati mafic-ultramafic belt. The key licences are located directly adjacent to the Kabanga Nickel Deposit, the largest undeveloped high grade nickel sulphide deposit in the world. The Kabanga Nickel Deposit is currently undergoing feasibility studies in a 50:50 joint venture between Xstrata Nickel (the operator) and Barrick Gold.
Kagera Nickel has completed a capital raising of AUS$4,000,000 that will fund exploration at the Kagera Project. Kagera Nickel has received approval to list on the Australian Stock Exchange, with trading expected to commence on October 29, 2010 (Australian time) under the symbol "KNL".
Dr. Bill Pearson, P.Geo., President & CEO of Castillian commented: "We are very pleased that this agreement has been completed and the over-subscribed capital raising by Kagera Nickel has been successful. For Castillian it is a very beneficial transaction as it will provide funds to continue exploring the Kagera Project while providing Castillian with excellent exposure to the potential upside of the project through ownership of Kagera Nickel shares. It allows us to focus on our core gold projects in particular the Hope Brook Gold Project in Newfoundland, where we are currently drilling. The agreement provides for a significant exploration program to advance the Kagera Project and significant participation for Castillian in the benefits of any important discoveries."
Under the terms of the agreement, Castillian will receive the following consideration:
- 5 million fully paid ordinary shares in Kagera Nickel;
- 7.5 million performance shares in Kagera Nickel, convertible into ordinary shares upon the drilling of 3 holes with a minimum 4 metres intersection grading at least 1% nickel within 3 years of being issued;
- 7.5 million performance shares in Kagera Nickel, convertible into ordinary shares upon the completion of an independent JORC compliant Mineral Resource estimate of not less than 5.000,000 tonnes of nickel with a grade of not less than 1% nickel insitu or equivalent within 5 years of being issued; and
- 7.5 million performance shares in Kagera Nickel, convertible into ordinary shares upon the completion of an independent JORC compliant Mineral Resource estimate of not less than 10,000,000 tonnes of nickel with a grade of not less than 1% nickel insitu or equivalent within 5 years of being issued.
As part of the agreement, Kagera Nickel has appointed two Castillian nominees to the Kagera Nickel board, Mr David Gower and Mr David Argyle, both of whom are currently directors of the Castillian.
Dr. Bill Pearson, P.Geo., President and CEO of Castillian and Mr. David Gower, P.Geo., Director, both of whom are qualified persons as defined by National Instrument 43-101, have reviewed and approved the scientific and technical content of this press release.
Source: Castillian Resources Corporation