Diamond royalty acquisition in Alberta
Ashton Mining of Canada Inc ACA
Shares issued 20,836,399 Oct 30 close $5.25
Fri 31 Oct 97 News Release
See Frontier Pacific Mining Corporation (FRP) News Release
Mr John Mirko reports
The company has taken steps to expand and diversify its mineral project
portfolio into the diamond development field by acquiring by way of an
absolute assignment agreement a 2.0% gross overriding royalty and a 2.0%
net smelter return royalty in 923 applications for metallic and industrial
mineral permits covering over 20 million acres in the province of Alberta.
This acquisition allows Frontier to participate in all revenue from any new
diamond discoveries on the properties for no cost.
Reported exploration to date carried out by 690688 Alberta, Pure Gold
Resources (T.PUG), Cayo Resources, Ashton Mining of Canada and others on
the property has resulted in the discovery of a 0.392 carat diamond in
gravels within the Edmonton project block and over 50 circular high
resolution aero-magnetic anomalies identified over the Lethbridge project
block. Four of the anomalies are proximal to the discovery site of the
Legend Diamonds of 0.14 and 0.17 carats, and the beige-green Black-Butte
diamond chip. Exploration work is expected to commence in the near term on
the Peace River-Caribou Hills project block areas.
Pursuant to the terms of the royalty agreement, Frontier is entitled to a
GORR equal to 2% of the average appraised value of all gem and industrial
diamonds produced, recovered, sorted and graded from the property free and
clear of all costs of development and operation, and subject only to
government mineral and mining taxes and royalties and the fees and expenses
of graders, to be paid to Frontier. Average appraised value means the
average of the valuations in Canadian dollars determined by two independent
graders, one appointed by the property holder and one appointed by
Frontier. Such independent graders would be duly qualified and accredited
and would sort, grade and value the diamonds in accordance with industry
standards, having regard to, but without limiting the generality of the
foregoing, the commercial demand for the diamonds, the grades of the
diamonds (gem or industrial) and the colors, sizes and clarity of the
diamonds (gem or industrial). Each independent valuator would value each
particular classification of the diamonds in accordance with the industry
price books, standards and formulas. The intention of the parties is that
the GORR is to be paid to Frontier on this basis regardless of the price or
proceeds actually received by the property holder for or in connection with
the diamonds or the manner in which a sale of the diamonds to a third party
is made, and without deduction except for the fees and the expenses payable
to the two graders, which will be paid by the property holder. The GORR
will be paid to Frontier within 30 days of each calendar quarter, based on
all diamonds from the property which were graded in that quarter. The NSR
will be calculated and paid on industry standard terms on all other
minerals produced.
CHINA Further to the news in Stockwatch dated October 28 1997, Frontier's
new vice-president of exploration, China, Antin Guo, is currently in China
finalizing the company's formulation and licensing procedures for the
Ding-Ma, Zhen'an gold mine joint venture.
CANADA AND RUSSIA
Further work on the company's Canadian portfolio of gold, copper and
uranium properties will commence in the spring of 1998 with a diamond drill
program financed by the company's joint venture partner on the Lion project
in Northern BC. Frontier has also started the investigation and detailed
assessment of a potential gold project in Russia in which a majority joint
venture interest is available. |
