Benton finds partner for Goodchild project
2007-04-16 15:11 ET - News Release
Mr. Stephen Stares reports
BENTON RESOURCES CORP. (BTC, BTC-WT) AND STILLWATER MINING CORP (SWC) ENTER INTO EQUITY FINANCING AND PARTICIPATION AGREEMENT ON THE GOODCHILD NI-CU-PGE PROJECT.
Benton Resources Corp. has entered into a participation agreement with Stillwater Mining Company whereby SWC has the exclusive right to earn up to an initial 50-per-cent interest in the Goodchild and South Goodchild Ni-Cu-PGE projects. SWC can earn the 50-per-cent interest by completing three separate financings into Benton in the total amount of $6-million over a three-year period. Each financing will be priced at a 50-per-cent premium to the 20-day trailing average of Benton's share price prior to the completion of each of the three financings. SWC will have the right to take its interest to 70 per cent by incurring a further $24-million in exploration or completing a feasibility study on the Goodchild project, which ever first occurs. Benton will remain as operator for the first three years during the initial period of the agreement.
The specific terms of the agreement, which are subject to regulatory approval, are as follows.
To earn a 50 per cent interest in the Goodchild project, SWC must complete the following financings at a 50-per-cent premium to the 20-day rolling average of Benton's market share price to be determined immediately prior to the completion of each financing:
upon signing, a $1.6-million private placement of which $600,000 is to be spent on the Goodchild project and credited to SWC's initial earn-in requirements. This financing will occur immediately and has been priced at $1.24 per share;
upon the first year anniversary, a $2-million private placement of which $1-million is to be spent on the Goodchild project and credited to SWC's initial earn-in requirements; and
upon the second year anniversary, a $2.4-million private placement of which $1.4-million is to be spent on the Goodchild project and credited to SWC's initial earn-in requirements.
Upon fulfilling the requirements to earn an initial 50 per cent SWC and Benton shall form a 50/50 joint venture for the further development of the Goodchild project subject to SWC's right to earn a further 10-per-cent interest in the joint venture (to 60 per cent) by directly financing an additional $4-million in exploration expenditures over the following two-year period.
Provided it earns a 60-per-cent interest in the joint venture SWC will have the right to earn a further 10-per-cent interest in the joint venture (to 70 per cent) by directly financing over the following three-year period an additional $20-million in exploration expenditures or the completion of a feasibility study, whichever occurs first.
At Benton's sole election, following completion of the feasibility study, Benton may cause SWC to arrange total project financing for placing the Goodchild project into commercial production by granting SWC an additional 5-per-cent interest in the Goodchild project (to 75 per cent). In such case, SWC would be reimbursed for Benton's proportionate share of the financing from 80 per cent of Benton's share of net revenue from the Goodchild project with interest at the prime rate of the Royal Bank of Canada plus 1 per cent.
Benton is extremely pleased to have entered into the agreement with SWC. The significant premium to Benton's share price that SWC will be required to pay on the $6-million of financings reflects the potential of the Goodchild project to host a Ni-Cu-PGE deposit of economic proportions. Benton is currently planning a detailed airborne survey to be flown in the near future and an aggressive summer exploration program.
The Goodchild project is located approximately 15 kilometres north of Marathon, Ont., and is host to several nickel showings with grab samples assaying up to 6.72 per cent nickel (Falconbridge/Xstrata personnel). The large ultramafic intrusion measures approximately five kilometres by eight kilometres and has numerous untested airborne electromagnetic anomalies detected from a survey completed almost 20 years ago. Benton will keep its shareholders updated on developments at the Goodchild project as exploration moves forward.
Clinton Barr, PGeo, vice-president of exploration for Benton Resources, is the qualified person responsible for this release.
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