Well It got the Big Boys attention, Ross
Company Press Release
Barramundi Gold Ltd. Financing Agreement Executed With Newmont And Joint Venture Rights Over Longline Project Drilling Program Commencing In Early September
VANCOUVER, BC--(BUSINESS WIRE)--Aug. 31, 1999--Mr. Ewan Stoddart reports that Barramundi Gold Ltd.(Alberta Stock Exchange:BAM. - news; ``Barramundi') has executed a Heads of Agreement with Newmont Exploration of Canada Limited, a wholly owned subsidiary of Newmont Mining Corporation (NYSE:NEM - news; ``Newmont') for a private placement in Barramundi and joint venture rights over the Longline Property.
The Agreement is subject to approval of Barramundi shareholders at a meeting to be held on October 29, 1999, and to shareholders representing a majority of the shares in Barramundi committing to the transaction in advance.
The Longline Project is located in the Yukon's Tintina Gold Belt, approximately 300 km south east of the Pogo Deposit in Alaska. The project area has a significant placer gold production history in addition to exhibiting similar geological setting to many of the large-scale intrusive related discoveries in the Tintina Gold Belts.
Barramundi has carried out exploration programs at the property comprising airborne geophysics, soil geochemistry, trenching, and mapping. A major component of the exploration effort to date has been to identify the limits of a large-scale coincident geochemical and geophysical anomaly on the property. Detailed 'grid-based' exploration geochemistry and IP (induced polarisation) techniques have been used to help target a first phase of diamond drilling of up to 3,000 metres on this anomaly. This drill program is planned to commence in early September. This program will utilise drill rigs and other supplies already on site.
The Longline project is of special industry interest because of its location, intrusive related nature, gold production and the potential to be the next significant discovery in the belt. Barramundi's work has resulted in drill targets which can be immediately tested. ``Barramundi is very pleased to have such a well-respected company as Newmont as our financing partner, and we all look forward to seeing the next phase of exploration begin at Longline', Mr. Ewan Stoddart reports.
The terms of the placement are:
1. Newmont will subscribe for 1,666,667 Units in Barramundi at an
issue price of 30 cents per Unit for proceeds of C$500,000 to
Barramundi.
2. Each Unit will consist of one (1) flow-through share and
three-quarters (3/4) of a flow-through warrant. Each whole
flow-through warrant will be exercisable into a flow-through
share in Barramundi, at an exercise price of 40 cents until March
31, 2000.
3. The funds from the placement will be primarily allocated (90
percent of the funds) by Barramundi to a drilling program on the
Longline Property which will commence in early September, 1999,
with Newmont to act as operator using Newmont and Barramundi
staff.
4. Newmont will have a right of first refusal to fund future capital
raisings by Barramundi, or may participate in fundings to
maintain it's percentage interest in Barramundi.
The principal terms of the joint venture rights held by Newmont per the Letter of Agreement are:
1. Newmont will only have the right to elect to enter into a joint
venture if it exercises all of the flow- through warrants for
proceeds of a further C$500,000 to Barramundi.
2. If Newmont exercises the warrants and elects to participate in a
joint venture, then it will be required to expend C$4 million by
December 31, 2004, with a minimum expenditure of C$500,000 within
the first year after Barramundi completes it's exploration
program, to earn a 51 percent interest in the project.
Newmont will earn no interest in the project until it has
expended C$4 million. Newmont will be the operator of the Joint
Venture so long as it maintains a 50 percent or greater interest
therein.
3. Newmont may then elect to earn an 80 percent interest in the
project by spending a further C$15 million or completing a
bankable feasibility study by 2010.
4. If Newmont spends less than C$15 million, it will earn a 2
percent interest for each C$1 million expended. Newmont's
expenditures will include a payment of C$10,000 per month to
Barramundi for two years to fund Barramundi's office and
administrative costs.
5. Once Newmont has reached an 80 percent interest, Barramundi may
elect to have Newmont fund it's expenditures to the production
stage by a non-recourse loan secured over the project. If
Barramundi does not so elect, each party will be responsible for
their expenditures in proportion to their interest, or will be
diluted pro-rata based on actual and deemed expenditure on the
project. Barramundi is deemed to have incurred expenditure of
C$10 million for the purposes of the dilution calculation. If
either party is diluted to a 10 percent interest or less, then
it's interest will convert to a 1 percent net smelter royalty
interest.
6. If Barramundi elects to have Newmont fund it's expenditures to
production, then Barramundi's interest will be reduced from 20
percent to 17.5 percent. After the commencement of production, 6
percent of project net profits will be available directly to
Barramundi. The expenditures funded by Newmont plus interest at
LIBOR (London interbank offer rate) plus 2 percent, will be
repaid from the remaining 11.5 percent of Barramundi's share of
project net profit. Once the Newmont expenditures and interest
have been repaid, Barramundi will be entitled to 17.5 percent of
project net profits.
7. Newmont will receive management fees of 10 percent of exploration
expenditures, 5 percent of development expenditures and US$7 per
ounce of gold produced.
8. Newmont may elect to terminate the joint venture on 30 days
notice.
The Alberta Stock Exchange has neither approved or disapproved the contents of this release
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Contact:
Barramundi Gold
John Haley, CFO, 604/ 681-7136
604/ 681-7120 (FAX)
E-Mail johnh@barramundi.com
or
Ross Orr, CEF
Investor Relations, 416/777-0001
416/777-1254 (FAX)
E-mail borr@netcom.ca
or
Barramundi Gold
Ewan Stoddart, Chairman, 075/592-2766
075/592-2844 (FAX)
E-Mail stoddy@fan.net.au
or
Barramundi Gold
Paul Ning, Director, 075/577-3260
075/577-5830 (FAX)
ning@ausinfo.com.au |
