Business
Nuinsco announces completing a definitive agreement to sell its Rainy River property to Collingwood Capital Corp; Retains equity and royalty interest
Nuinsco announces completing a definitive agreement to sell its Rainy River property to Collingwood Capital Corp; Retains equity and royalty interest.
About this update from Nuinsco Resources Limited
[{"type":"text","content":"\n\n\n\n\nTORONTO, April 15 /CNW/ - Nuinsco Resources Limited (TSX:NWI) today\nannounced it has reached a definitive agreement to sell its Rainy River\nproperty, located in the Rainy River district of Northwestern Ontario, to\nCollingwood Capital Corp, a TSX Venture Exchange company. The sale agreement\nreplaces the letter agreement between Nuinsco and 608457 B.C. respecting the\npurchase and sale of the Rainy River property, which agreement was assigned by\n608457BC to Collingwood Capital Corp.\nNuinsco will receive total cash payments of $2.5 million, of which\n$750,000 has been paid by 608457B.C. to Nuinsco to date. Collingwood will pay\nto Nuinsco the balance of $1.75 million in seven equal quarterly installments\nof $250,000 each. The first payment is due on June 15, 2005.\nNuinsco will receive a bonus of $2.5 million on commencement of\ncommercial production or direct shipment of ore from the property. Collingwood\nwill also pay to Nuinsco a quarterly royalty of $1.00 per ton of ore produced\nfrom the property, subject to an annual Consumer Price Index adjustment.\nIn addition to the cash portion of the purchase price, Collingwood will\nissue to Nuinsco on closing a total of 549,345 common shares of Collingwood,\nat a deemed price of $1.00 per share, calculated on a subdivided basis. (has\nreceived shareholder approval to subdivide its shares on a four - for- one\nbasis. If the subdivision is completed before the completion of the purchase,\nNuinsco will receive 2,197,380 common shares at a deemed price of 25 cents\neach).\nIf Collingwood proposes to issue any additional securities in order to\nfinance the continued development of the Rainy River property, Nuinsco shall\nhave the preemptive right to participate in such financing, to a maximum of \n7 per cent thereof for a term of five years. In addition, if Collingwood\ncompletes an equity financing within 30 days following closing, Nuinsco will\nbe entitled to receive additional shares of Collingwood equal to 7 per cent of\nthat financing.\nAs security for payment of the purchase price, Collingwood will grant to\nNuinsco a first mortgage and general security interest over the interest it\nacquires in the Rainy River property and all related assets.\n\"We are pleased to complete the sale of the Rainy River property because\nNuinsco shareholders are receiving value for an i...