Melkior Resources Signs the Option Agreement with Green Swan
Ottawa, Ontario CANADA, August 15, 2011 /FSC/ - Melkior Resources Inc. (MKR - TSX Venture), ("Melkior" or the "Company") previously announced on July 14, 2011 it had entered into a revised Letter of Intent with Green Swan Capital Corp. (GSW.H - NEX) ("Green Swan") whereby Green Swan can acquire up to a 70% interest in the mining areas commonly known as the Riverbank and Broke Back claims (together, the "Claims") from Melkior. Green Swan is a Capital Pool Company and intents to have this option to acquire up to 70% of the Claims constitute its Qualifying Transaction ("QT").
The Company is pleased to announce that the Letter of Intent has been replaced by a formal Option Agreement, which allows Green Swan to earn up to a 70% interest in the Claims, subject to a Net Smelter royalty not to exceed 2.5%. Green Swan may earn an initial 51% interest ("Option 1") in the Claims by making cash payments to Melkior of $25,000, issuing in favour of Melkior 1,500,000 common shares of Green Swan, issuing in favour of Melkior 750,000 warrants (the "Warrants"), and incurring a gross amount of $1,000,000 in eligible exploration expenditures on the Claims before December 31, 2014 (the "Work Program"). The Warrants are exercisable for a period of 12 months at a price of 15 cents per common share and for a further 12 month period at a price of 25 cents per common share, and have an acceleration clause should Green Swan's shares trade above 30 cents for 20 consecutive trading days.
If Melkior carries out any exploration activity on the Claims before the closing of the QT, then by December 31, 2011 Green Swan must reimburse Melkior for the costs of such activity, plus a 10% management fee, which reimbursement and management fee will be deducted against the Work Program.
Upon exercise of Option 1 outlined above, Green Swan will have to right to elect to proceed with Option 2, under which Green Swan would have the right to earn an additional 19% interest in the Claims by incurring additional exploration expenditures totaling a further $1,000,000 over an additional 24 month time frame. Green Swan may terminate either Option 1 or Option 2 at any time by giving 120 days' advance notice to that effect to Melkior. Green Swan's failure to give such notice will trigger a payment from Green Swan to Melkior in the amount of $25,000.
On the completion of Option 2, Green Swan will own 70% of the Claims, and an industry standard joint venture will immediately be created, pursuant to which each of Green Swan and Melkior will contribute its proportionate share of all expenditures related to the Claims. A joint venture may also be created on the occurrence of certain other JV Events, as defined and described in the Agreement.
Melkior had the right, following the completion of Option 1, but prior to Green Swan making any expenditure to complete Option 2, to advise that it wishes to immediately form a Joint Venture on a 51% Green Swan / 49% Melkior basis. The exercise of this right by Melkior is considered a JV Event in the Agreement.
From the date of the QT, Green Swan shall be the operator on the Claim and shall levy a 10% operator's fee to Melkior.
Melkior retains 100% interest on its McFaulds East Rim property where drilling is underway.
This Press Release was prepared by Jens E. Hansen, P.Eng, President of Melkior Resources Inc.
About Melkior:
Melkior is an exploration company with active exploration projects in West Timmins and the McFaulds "Ring of Fire" areas of Ontario. Melkior also holds a 49% interest in the Delta Kenty nickel-copper-platinum-palladium deposit in Ungava and has several other gold properties in Ontario and Quebec.
For more information:
Melkior Resources Inc.
Tel: 613.721.2919 ext 0
Fax: 613.680.1091
E-mail: melkior@rogers.com
Web: www.melkior.com
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This press release may contain forward-looking statements that are subject to known and unknown risks and uncertainties that could cause actual results to vary materially from targeted results. Such risks and uncertainties include those described in Melkior's periodic reports including the annual report or in the filings made by Melkior from time to time with securities regulatory authorities.
To view this release as a web page, please click on the following link:
http://www.usetdas.com/pr/melkior08152011.htm
Source: Ressources Melkior Inc. (TSXV MKR) www.melkior.com
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