TORONTO, Nov. 5 /CNW/ - Coniagas Resources Limited ("Coniagas" or the "Company") (TSX-V: "CNY") is pleased to announce the signing of a Letter Of Intent ("LOI") with Societe De Developpement De La Baie James and others (the "Optionors") to explore and develop mining claims located in Mattagami, Quebec.
The Optionors are prepared to give Coniagas the right and option (the "Option") to acquire a one hundred percent (100%) undivided right, title and interest in and to the Optionors' interest in the Property, free and clear of all Encumbrances, upon meeting certain conditions, as set out in the Letter of Intent.
The LOI is subject to board and regulatory approval and the finalization of a definitive agreement between the parties (the "Definitive Agreement") to be concluded sixty (60) days following the signature of the LOI and the approvals of the respective Boards and receipt of all regulatory approvals.
Under the terms of the LOI, Coniagas will pay $60,000 to the Optionors upon signing of the LOI, and issue, subject to regulatory approval, 500,000 common shares of Coniagas.
The LOI also provides, Coniagas will:
(a) On each of the first anniversary date and second anniversary date
of the LOI in 2008 and 2009, the Optionors shall receive
one million (1,000,000) common shares of Coniagas with a 4-month
hold period for an aggregate of 2,000,000 common shares;
(b) On the third anniversary date of the LOI in 2010, if the value of
the 2,500,000 shares mentioned in 3.2(a)(ii) and (b), based on the
weighted average trading price of the last twenty (20) Trading
Days preceding the date of issue of such shares is less than
$5,000,000, Coniagas shall pay in cash the difference to the
Optionors; and
(c) Coniagas will grant to Optionors a 2% NSR royalty on the project.
Coniagas will have the right to repurchase half of this royalty
(or 1% NSR) for a cash payment of Cdn $1 million within one year
of the completion of a positive independent feasibility study.
The closing of the transaction is expected to occur as soon as possible following board and regulatory approval and the execution of a definitive agreement.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of the content of this
release.