RMX-v...in the news:
Redstar granted interest option in Rubicon properties
Mon 11 Mar 2002
Mr. Steve Todoruk of Redstar Resources reports
REDSTAR OPTIONS WEST RED LAKE PROPERTY FROM RUBICON
Redstar Resources and Rubicon Minerals have signed a letter agreement
giving the company the option to earn up to a 70-per-cent interest in four
of Rubicon's properties in the western end of the Red Lake gold camp, Ont.
The West Red Lake properties consist of 226 claim units located in
prospective trends between 15 and 30 kilometres west of Goldcorp Inc.'s new
Red Lake mine in Northwestern Ontario.
To earn a 51-per-cent interest in the West Red Lake properties, the company
must issue 500,000 postconsolidated shares and make cash payments totalling
$135,000 to Rubicon, and carry out $2,575,000 in exploration within four
years. The company will also be responsible for making cash payments to the
underlying property vendors on the three properties, of which $36,000 is
firm in the first year. A 2-per-cent net smelter royalty (NSR) is held by
the underlying vendors on the Pipestone South, Pipestone North and Wolf
properties. On each property, a 1-per-cent NSR can be repurchased from the
vendor. Nominal advance royalty payments will also be due to the vendors.
On the Baird property, no NSR is held and only nominal advance royalty
payments are due.
The company will have a one-time 60-day period to elect whether to exercise
an option to earn an additional 9-per-cent interest by spending an
additional $7.5-million in work on the property over the four years
following the election.
The company will have a second option to increase its interest in the
property by a further 10-per-cent by agreeing to pay for all costs on the
property to finance a positive and bankable feasibility study, and
arranging for all project financing for a mine or mines. The second option
is subject to approval by Rubicon.
The company is also arranging a $650,000 private placement, subject to
shareholder approval and regulatory acceptance of a proposed share
consolidation to be voted on at a special meeting of the company's
shareholders on April 11, 2002. The private placement will consist of up to
5.5 million units to raise gross proceeds of $650,000. Up to 3.75 million
units will be flow-through eligible. Each unit will consist of one
postconsolidated common share and one full share purchase warrant
exercisable for two years. The price of the units will depend upon the
consolidation ratio that the shareholders and directors approve.
It is intended that the units will be priced at the discounted market
price, after taking into account the share consolidation, as set out in the
policies of the Canadian Venture Exchange. Each warrant will be exercisable
into one postconsolidated common share at an exercise price determined in
accordance with CDNX policies. Finder's fees, payable in shares or cash,
may be made to registered dealers who make introductions to placees.
A majority of the net proceeds of the $650,000 from the financing will be
used for exploration on the West Red Lake properties.
The company is also proceeding with a special shareholders meeting on April
11, 2002, at which time proposed share consolidations of 4:1, 6:1 and 8:1
will be voted upon, as well as a name change to Redstar Gold Corp.
The letter agreement with Rubicon is conditional upon the company closing
its $650,000 private placement financing which must be completed within 30
days of CDNX approval of the company's share consolidation.
Redstar is pleased to form this new partnership with Rubicon who is the
largest landowner in the Red Lake gold camp. Rubicon is currently in a
joint venture partnership with Anglogold, whereby Anglogold must spend
$5.1-million over the next five years. As well, Rubicon is earning a
60-per-cent interest in another joint venture partnership with Golden Tag
Resources Inc. In early February, Rubicon commenced a major diamond
drilling on the separate joint ventures.
Historically, over 24 million ounces of gold have been produced in the
prolific Red Lake gold camp. Current production takes place from Goldcorp's
new Red Lake mine and Placer Dome's nearby Campbell mine. |
