TSC & CHX JV agreement
April 18, 2006 - Twenty-Seven Capital Corp. (TSX-V:TSC) announces the formation of Yukon Uranium Project (YUP). YUP amalgamates and expands certain rights and obligations of Cash Minerals Ltd. and Twenty-Seven Capital that were outlined in earlier agreements dated November 26, 2004 and September, 20 2005.
The YUP agreement greatly simplifies operating procedures for uranium exploration programs being conducted by Cash Minerals and Twenty-Seven Capital in Yukon. The changes provide a workable framework that will permit much larger exploration expenditures on a timely basis, which in turn will allow the companies to quickly respond to favourable results and will provide Cash Minerals the opportunity to obtain additional geological information before making major development decisions.
YUP holds interests in 11 mineral properties in various parts of Yukon, the most advanced of which are the Igor and Lumina projects. Igor features widespread copper and uranium mineralization in a discordant IOCG type breccia body while Lumina hosts numerous high grade uranium showings associated with structural zones immediately beneath a regional-scale unconformity (see www.27capitalcorp.com for more information).
Details of the YUP agreement are provided in the following paragraphs.
Twenty-Seven Capital currently owns a 100% interest in YUP through its property ownership and a $100,000 advance it has made toward 2006 exploration expenditures.
In order for Cash Minerals to earn a 50% interest in YUP, it must make $200,000 in cash payments to Twenty-Seven Capital and make exploration expenditures in YUP totalling at least $3,400,000 before December 31, 2006. Cash Minerals has the right to expend more than $3,400,000 but will not earn any additional interest for those expenditures. Twenty-Seven Capital is under no obligation to make any additional expenditures by that date and will not suffer any dilution if Cash Minerals makes additional expenditures. Both parties acknowledge that if such additional exploration expenditures are made by Cash Minerals, it benefits by obtaining additional information regarding the properties with which to make its decision concerning certain rights to earn a larger interest in one or more of the properties.
Assuming the required cash payments and work expenditures are made by December 31, 2006, Cash Minerals shall have earned its 50% interest in YUP.
On or before January 31, 2007, Cash Minerals must elect to: (1) remain at 50% and have its YUP interests transferred to a joint venture (Yukon Uranium Joint Venture - "YUJV") owned equally by it and Twenty-Seven Capital; (2) proceed to earn a 75% interest in one or more properties by immediately making a $1,000,000 cash payment for each property selected and subsequently producing a bankable feasibility study for each selected property, with all of its other YUP interests being transferred to YUJV; or, (3) defer its decision to January 31, 2008 and make additional work expenditures in YUP totalling $2,000,000 or more after electing to defer its decision and prior to December 31, 2007. If Cash Minerals elects to defer its decision, it will not earn any additional interest in YUP and Twenty-Seven Capital will not be under any obligation to make any additional expenditures or suffer any dilution because of Cash Minerals' expenditures. Both parties again acknowledge that if these additional expenditures are made Cash Minerals shall benefit by obtaining additional information regarding the properties with which to make its decision concerning its right to earn a larger interest in one or more of the properties.
If Cash Minerals does not complete the additional $2,000,000 work expenditure by December 31, 2007, its interests in YUP shall transfer to YUJV. If Cash Minerals completes the additional $2,000,000 work expenditure by December 31, 2007, it must make an election on or before January 31, 2008 to: 1) proceed to earn a 75% interest in one or more properties by immediately making a $1,000,000 cash payment for each property selected and subsequently producing a bankable feasibility study for each selected property, with all of its other interests in YUP transferring to YUJV; or, 2) decline to proceed to earn a larger interest in any property and transfer all of its interests in YUP to YUJV.
If after electing to earn a 75% interest in a property, Cash Minerals later decides that property does not warrant preparation of a bankable feasibility, the property shall be transferred to YUJV without Cash Minerals earning a larger interest in that property than it holds in YUJV. Upon formation of YUJV, each party will have a 50% interest in YUJV. If the participating interest if either party to YUJV is subsequently diluted to less than 10%, that interest will automatically be converted to a 1% net smelter return royalty interest and that party will lose all right to participate in subsequent work programs.
On January 1, 2009, the Project Area shall automatically reduce to a three kilometre area of interest surrounding each claim owned by YUJV on that date. After that date Cash Minerals and Twenty-Seven Capital shall be entitled to conduct independent exploration within the remainder of the former Project Area.
$$$
Read the shares outstanding comparison:
TSC
Shares issued: 14,194,566
Shares fully diluted: 20,201,122
Working Capital: C$2 mm current July 2006
Cash Minerals
Shares Outstanding: 60,849,964
Fully Diluted: 82,197,363
Working Capital C9.4mm end of March 2006
Looks pretty sweet for TSC. They have the land CHX has the $$$ for now. CHX might have to dilute furthur via PP to get their 75%. Any thoughts?
kc
Message 22621759
KEYWORD:CRACKER |
