Manitou Gold Inc. Announces Acquisition of Gaffney Property
TORONTO, ONTARIO – October 1, 2013 – Manitou Gold Inc. (TSX-V: MTU) (the “Corporation” or “Manitou”) is pleased to announce that it has entered into an asset transfer agreement (the “Transfer Agreement”) with Teck Resources Limited (the “Vendor”) providing for the purchase by the Corporation of all of the Vendor’s right, title and interest in and to the property known as the Gaffney Property, in exchange for an aggregate of 1,000,000 common shares of the Corporation and 1,000,000 share purchase warrants of the Corporation, with each share purchase warrant being exercisable for a two year period to acquire one additional common share of the Corporation at an exercise price of CDN$0.50.
Also in connection with the Transfer Agreement, the Corporation and the Vendor have agreed to enter into the following net smelter return royalty (the “NSR Royalty”) agreements (collectively, the “Royalty Agreements”) in respect of mineral production from the Gaffney Property, the mineral claims known as the Gaffney Extension Property (collectively, the “Purchaser Property”) and certain additional mineral claims located in the vicinity (collectively, the “Purchaser Option Claims”) which are the subject of an option in favour of the Corporation pursuant to the option agreement between the Corporation, David Healey and Karl Bjorkman dated January 31, 2011 (the “Option Agreement”), as applicable:
- an NSR Royalty agreement pursuant to which the Vendor retains a 2% NSR Royalty on the Gaffney Property with no right of buyout;
- an NSR Royalty agreement pursuant to which the Corporation will grant to the Vendor a 0.125% NSR Royalty on the Purchaser Property (excluding the Purchaser Option Claims), with no right of buyout; and
an NSR Royalty agreement pursuant to which, conditional on the exercise by the Corporation of its option to acquire a 100% interest on the Purchaser Option Claims, among other things, the Corporation will grant to the Vendor the following:
- a 0.125% NSR Royalty on the Purchaser Option Claims;
- the right to purchase, with or without the Corporation, one half of the 2.5% NSR Royalty retained by the optionors under the Option Agreement (the “Royalty Purchase”), being a 1.25% NSR Royalty on the Purchaser Option Claims or any other properties that may be included as part of the Purchaser Option Claims (the “Purchased Royalty”); pursuant to the Option Agreement, the Royalty Purchase will be made in exchange for a cash payment of $1.25 million to the optionors (the “Cash Payment”), which, if effected by the Corporation and the Vendor, will be payable as follows: 50% by the Vendor and 50% by the Corporation. Upon completion of the Royalty Purchase, the Vendor will be entitled to 50% of the Purchased Royalty, being a 0.625% NSR Royalty, and the Corporation will be entitled to, and shall extinguish, the other 50% of the Purchased Royalty, being a 0.625% NSR Royalty; and
- the right to solely complete the Royalty Purchase in certain circumstances by making 100% of the Cash Payment and thereby receiving 100% of the Purchased Royalty, being a 1.25% NSR Royalty on the Purchaser Option Claims.
The Transfer Agreement and Royalty Agreements remain subject to, among other things, the receipt of all applicable regulatory approvals, including the approval of the TSX Venture Exchange.
The Corporation is also pleased to announce that it has adopted a fixed stock option plan (the “2013 Plan”) providing for the grant of stock options exercisable to acquire up to an aggregate of 5,384,741 common shares of the Corporation. The 2013 Plan replaces all prior stock option plans of the Corporation, and has been filed under the Corporation’s profile on SEDAR at www.sedar.com.
For further information please contact:
Todd Keast, President and CEO
Manitou Gold Inc.
(705) 222-8801 (FAX)
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.
Forward Looking Statements – Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of the Corporation, including, but not limited to the receipt of applicable regulatory approvals. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.