MONTELLO RESOURCES LTD.
P.O. Box 49057, Three Bentall Centre
Suite 1473, 595 Burrard Street
Vancouver, British Columbia V7X 1C4
Phone No. (604) 689-1799
Fax No. (604) 689-8199
FORM 27
SECURITIES ACT (ALBERTA)
MATERIAL CHANGE REPORT UNDER SECTION 118(1) OF THE ACT
1. Reporting Issuer
MONTELLO RESOURCES LTD.
Suite 1473, 595 Burrard Street
Vancouver, BC V7X 1C4
Phone No.: (604) 689-1799
2. Date of Material Change
September 8, 1998
3. Press Release
September 8, 1998 through the facilities of the Vancouver Market News Publishing, George Cross Newsletter and Canada Stockwatch (Western Edition).
4. Summary of Material Change
See attached Montello Resources Ltd. News Release dated September 8, 1998.
5. Reliance on Section 118(2) of the Act
Not Applicable
6. Omitted Information
Not Applicable
7. Senior Officers
Patrick Power, President of Montello Resources Ltd.
8. Statement of Senior Officer
The foregoing accurately discloses the material change referred to herein.
Dated at Vancouver, British Columbia on September 8, 1998.
Yours truly,
MONTELLO RESOURCES LTD.
Per: "Patrick Power"
PATRICK POWER, President
MONTELLO RESOURCES LTD.Suite 1473, Three Bentall Centre595 Burrard StreetVancouver, British ColumbiaV7X 1C4Tel: (604) 689-1799Fax: (604) 689-8199 ASE SYMBOL: MEO.YU.S. 12g # 82-1812 REDWOOD RESOURCES LTD.1500, 300-5th Avenue S.W.Calgary, AlbertaT2P 3C8Tel: (403) 266-6261Fax: (403) 261-7836ASE SYMBOL: RDW.Y
September 8, 1998
JOINT NEWS RELEASE
Montello and Redwood Sign Legend Block Option Agreement With Kennecott
Montello Resources Ltd. ("Montello") and Redwood Resources Ltd. ("Redwood") announce that the signing has taken place of the formal Legend Property Option Agreement with Kennecott Canada Exploration, Inc. ("Kennecott"). The option agreement will entitle Kennecott to earn a 60% interest in the Legend Property (70% Montello/30% Redwood) located in the province of Alberta. The Legend Property consists of approximately 1.5 million acres and is located 55 km to the northeast of the latest Ashton kimberlite pipes. All payments and private placements shall be divided 70% to Montello and 30% to Redwood. Redwood has waived its right to earn an additional 20% interest in the Legend Property.
As previously announced on July 24, 1998, pursuant to the terms of the option agreement, Kennecott must make private placements in Montello and Redwood of the cumulative amount of $275,000 on closing. The initial private placement of $275,000 shall be for 256,666 units of Montello at a price of CDN$0.75 per unit and 55,000 units of Redwood at a price of $1.50 per unit. The warrants attached to the units shall be exercisable at $1.50 for Montello and $3.00 for Redwood at any time prior to July 21, 2000. A subsequent firm private placement of $175,000 must be made on or before January 15, 1999 and a $600,000 private placement must be made upon commencement of a 10 tonne bulk sample on any kimberlite pipe on the property. The pricing of the $175,000 private placement and the $600,000 private placement shall be the 10 day trading average immediately preceding that date plus 25%. Each private placement shall consist of a common share and a share purchase warrant exercisable at a price equal to 150% of the private placement price for two years from the date of the private placement. The private placements are subject to regulatory approval.
Kennecott shall solely make all expenditures required to bring the project to a mutual decision to mine or by making exploration expenditures totalling $30 Million over seven years, whichever shall occur first. Kennecott shall expend $500,000 prior to May 30, 1999 and an additional $4,500,000 on or before May 30, 2003. Upon the commencement of commercial production from a mine located within the Property boundaries, Kennecott shall pay the additional sum of $2,000,000.
There are currently forest fires on the Legend Property. Kennecott will mobilize a drill program on anomalies previously identified on the Legend Property as soon as forest fire conditions allow.
ON BEHALF OF THE BOARD OF DIRECTORS
MONTELLO RESOURCES LTD. REDWOOD RESOURCES LTD.
Per: "Patrick Power" Per: "Gary Korzenowski"
PATRICK POWER, President GARY KORZENOWSKI, President
The Alberta Stock Exchange has neither approved nor disapproved the information contained herein.
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