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Sultan Minerals Inc. (SUL-TSX-Venture) ("Sultan") is pleased to announce that, subject to regulatory approval, it has entered into an option agreement (the "Agreement") with Altair Ventures Inc. ("Altair") whereby Altair has an option to earn a 60% interest in Sultan's Kena Gold-Copper Property (the "Project") in British Columbia by completing $7,500,000 in Project related exploration expenditures over four years.
The Project covers approximately 7,600 hectares of mineral claims located near Nelson, British Columbia and is comprised of the Kena Gold, Gold Mountain and Copper King showings together with the historic Euphrates and Gold Cup gold mines. The Gold Mountain and Kena Gold Zones have been partially tested with 16,500 metres of drilling in 116 diamond drill holes. A preliminary, NI 43-101 compliant, resource estimate (Giroux and Dandy, June 7, 2004) shows the two zones have a combined measured and indicated resource of 541,000 ounces of gold at an average grade of 0.68 g/t gold, using a 0.3 g/t cut-off grade. There is an additional inferred resource of 557,000 ounces of gold at the same grade and cut-off. The Gold Mountain and Kena Gold zones are both open along strike and at depth with excellent resource expansion potential.
The Altair Option has a term of 4 years commencing from December 30th 2011 (the "Effective Date). The Option will terminate and be of no further force and effect if by March 30, 2012 this letter agreement has not been finally accepted by the TSX Venture Exchange (the "TSXV Acceptance").
To exercise the Option and earn its (60%) interest in the Project, Altair will:
(1)make the following cash option payments to Sultan:
(1)within 5 business days of receiving the TSXV Acceptance, $195,000;
(2)within six months from the Effective Date, an additional $200,000;
(3)within eighteen months from the Effective Date, an additional $300,000;
(4)within thirty months from the Effective Date, an additional $300,000;
(5)within forty-two months from the Effective Date, an additional $400,000; and
(6)within forty-eight months from the Effective Date, an additional $600,000,
for total cash option payments of $2,000,000 including $5,000 received on signing;
(2)issue Common shares of Altair to Sultan as follows:
(1)within 5 business days of receiving the TSXV Acceptance 1,500,000 shares
(2)within six months from the Effective Date, an additional 1,500,000 shares;
(3)within eighteen months from the Effective Date, an additional 1,500,000 shares;
(4)within thirty months from the Effective Date, an additional 1,500,000 shares; and
(5)within forty-eight months from the Effective Date, an additional 2,000,000 shares,
for a total of 8,000,000 shares; and
(3)incur Exploration Expenditures as follows:
(1)within twelve months from the Effective Date, $1,500,000;
(2)within twenty-four months from the Effective Date, an additional $2,000,000;
(3)within thirty-six months from the Effective Date, an additional $2,000,000; and
(4)within forty-eight months from the Effective Date, an additional $2,000,000,
for total Exploration Expenditures of $7,500,000.
After Altair has earned its 60% interest in the Project, Altair may elect to extend the option (the "First Option Extension Notice") and earn a 70% interest in the Project by completing a Feasibility Report within 72 months following the Effective Date. If Altair completes a Feasibility Report within 72 months of the Effective Date, then Altair may elect to earn an additional 5% interest in the Project (the "Second Option Extension Notice"), making Altair's aggregate interest in the Project 75% by electing to continue funding all of the Project development expenditures up to the achievement of Commercial Production from the Project.
In addition to the other payments provided for in the agreement, Altair will make bonus payments to Sultan as follows:
(A)If, at the end of 51 months following the Effective Date, Altair has elected not to give the First Option Extension Notice, and the Parties have then established that there are measured and indicated gold resources on the Project of not less than 2.0 million ounces at a 0.3 gram/tonne cut-off, then Altair will pay a one-time lump sum $2.0 million Reported Resource Bonus to Sultan.
(B)If, Altair elects to give the First Option Extension Notice, then at the end of 76 months following the Effective Date Altair will pay a Reported Resource Bonus to Sultan equal to the greater of:
(1)$5.00 per ounce of probable and proven mineral reserves on the Project, determined at a 0.3 gram/tonne cut-off; or
(2)a one-time lump sum amount of $2.0 million, provided that the Parties have by then established that there are measured and indicated gold resources on the Project of not less than 2.0 million ounces at a 0.3 gram/tonne cut-off.
During the term of the option, exploration programs will be developed by Altair in consultation with Sultan's geologists. Altair will manage and direct the Project exploration programs.
Mr. Arthur G. Troup, President and CEO of Sultan Minerals Inc., said: "We are very pleased to have the support of Altair Ventures Inc. in advancing the exploration and development of the Kena Project. I believe that by entering into this agreement, the Project will be moved forward to possible production in an effective and efficient manner that will benefit the shareholders of both companies."
Sultan will retain approximately 550 hectares of claims and crown granted mineral claims adjacent to the northwest corner of the Kena Project. The retained property includes the recently acquired Daylight property, the Sand property and several adjacent historic gold mines.
Arthur G. Troup, P.Eng., Geological
President and CEO
For further information please contact: Marc Lee, Investor and Corporate Communications Tel: (604) 628-0519 Fax: (604) 628-0446 Email: mlee@sultanminerals.com or info@sultanminerals.com
For further information on Sultan's projects, visit www.sultanminerals.com.
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