Aquiline Resources Inc (AQI-V)
Thursday Jan 16 1997
The VSE has accepted for filing agreements dated November 25 1996, and
November 27 1996, whereby Hecla Mining Company can acquire from Aquiline Resources Inc, a 60% interest in Aquiline's La Jojoba project in Magdalena, Sonora, Mexico. Upon closing of the private placement described below, Hecla can exercise the option by paying Aquiline US$2.1 million up to December 31 1997. The option may be extended for up to a maximum of six months by paying Aquiline US$50,000 per month. Additional terms and consideration are as follows:
a) Hecla agrees to purchase a private placement of shares of Aquiline in the amount of US$500,000 at $1.00;
b) Hecla has 45 days, following the closing of the private placement, within which to conduct due diligence with respect to the project. If Hecla commits to proceed with the project, it will reimburse Aquiline for the December 4 1996 US$400,000 property payment, be appointed as manager of the project, and advance US$1.1 million to be applied in further development of the project, all subsequent costs will be paid according to each participant's ownership interest, and Hecla will pay 100% of the June 1997, property payment and 60% of the December 1997 property payment due in connection with the project;
c) Aquiline agrees to pay Hecla a break-up fee of US$250,000 if the
transactions contemplated in the agreements are abandoned or terminated for reasons outside of the control of Hecla. Aquiline has also agreed to indemnify Hecla, to a maximum of US$200,000, with respect to legal fees and expenses Hecla might incur as a result of any action taken to prevent the closing of the transactions contemplated by the November 25 1996, and November 27 1996, agreements;
d) Hecla has the right at any time, on 90 days notice, to terminate the joint development agreement. If Hecla exercises its termination right before exercising its right to earn a 60% interest in the project, Hecla will relinquish to Aquiline all its rights to the project;
e) Failure by Aquiline or Hecla to finance project costs in proportion to their respective interests will result in the dilution of such interests. If Aquiline's interest in the project is diluted to 10%, such interest will be converted into a 3% nsr royalty interest. |
