Hello Bully
Some news of interest over the past two days:
NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: ISLAND-ARC RESOURCES CORPORATIONVSE SYMBOL: IARDECEMBER 10, 1997
Island-Arc Resources: Back Lake, NWT, Diamond ProjectInterest Greatly Increased
VANCOUVER, BRITISH COLUMBIA--Five years ago, in December of 1992,
seven public companies pooled their claims in the Back Lake area
(the "Back Lake Claims") southeast of Lac de Gras in the Northwest
Territories. Island-Arc Resources Corporation contributed 30,990
acres to the 522,182 acres pooled, giving Island-Arc a 5.93
percent interest in the Back Lake Claims.
The companies immediately granted Kennecott Canada Inc. an option
to acquire a 70 percent interest in the Back Lake Claims by making
exploration expenditures. Kennecott subsequently assigned its
rights to SouthernEra Resources Ltd., retaining the right to back
in for a 35 percent interest if a significant diamond discovery is
made on the Back Lake Claims.
By the end of 1995, SouthernEra had earned its 70 percent interest
in the Back Lake Claims, reducing Island-Arc's interest to a 1.78
percent interest which is carried to a production decision.
The six other public companies also had their interests reduced by70 percent.
Island-Arc has now concluded agreements with four of the six
companies to acquire their carried interests, as follows: /T/
Company Interest Cash Shares
Acquired
----------------------- ------------ -------- -------
Gulfside Industries Ltd. 2.69 percent $ 75,000 100,000
Ella Resources Ltd. 1.78 percent $ 62,500 85,000
International Ballater
Resources Ltd. 1.78 percent $ 62,500 85,000
Victory Resources Ltd. 0.87 percent $ 30,000 42,000
----------------------- ------------ -------- -------
Total: 7.12 percent $230,000 312,000/T/
As a result of these acquisitions, the major owners of the Back
Lake Claims are: /T/Island-Arc Resources Corporation 8.90 percent, Carried
Kalahari Resources Inc. 19.38 percent, Carried
SouthernEra Resources Ltd. 70.00 percent, Operator,
responsible for 100 percent of exploration expenditures
until a production decision is made./T/
Island-Arc has made an offer similar to the foregoing to the
remaining minority interest holder (1.72 percent), which is under
consideration. The purchase from Gulfside is subject to a net proceeds royalty
entitling Gulfside to 20 percent of the proceeds which would have
accrued to Gulfside had it not sold its interest, payable only
after recovery of all of Island-Arc's development costs plus interest.
Under the terms of the Kennecott/SouthernEra joint venture
agreement, the Operator (SouthernEra at this time) must notify the
carried partners when a Production Decision has been made. The
partners then have 120 days to notify the Operator whether they
wish to participate in the mine development by paying their
respective proportionate share of mine development costs, or, in
the alternative, accept their proportionate share of a 3 percent
gross overriding royalty ("GORR").
Significantly, if a partner elects not to participate, the other
partners may increase their interests by participating in its
stead, paying the non-participant the GORR it would otherwise be entitled to.
If a commercial diamond discovery is made on the Back Lake Claims,
and if Kennecott decides to exercise its back-in right, major
ownership would then be: /T/SouthernEra 35 percent
Kennecott 35 percentIsland-Arc 8.90 percent
Kalahari 19.38 percent/T/
With ownership of a potential mine so divided, both Island-Arc and
Kalahari's interests become very significant, especially if there
is a diamond discovery in the class of BHP/Dia Met or the even
richer Aber/Rio Tinto Diavik discovery.
The Back Lake Claims are in what was once termed "The Corridor of
Hope". They lie between BHP/Dia Met and Aber/Rio Tinto at Lac de
Gras and the Mountain Province discovery southeast of Back Lake.
Judging from news releases from SouthernEra, and from Kalahari
based on information from SouthernEra, a significant diamond
discovery may be in the making in the Munn Lake area of the Back Lake Claims.
Diamond bearing kimberlite float has been discovered and a
geophysical program and lake sediment indicator mineral sampling
program was reported as having started in early November. A
winterized camp has been installed and there is a drill on site.
Positive results from this program and from 1,700 indicator
mineral samples taken over the summer could lead to large drill
programs on the property this winter.
The mineral chemistry in eleven indicator mineral trains on the
Back Lake Claims are reported by Kalahari, based on information
from SouthernEra, to be some of the best found to date in the NWT
diamond play in terms of quantity, quality and composition.
The agreements are subject to regulatory acceptance.
ON BEHALF OF THE BOARD OF DIRECTORS OF ISLAND-ARC RESOURCES CORPORATION
Kim M. Phillips, President
NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: ISLAND-ARC RESOURCES CORPORATIONVSE SYMBOL: IARDECEMBER 11, 1997
Island-Arc Resources: Carried Interest in Back Lake
Diamond Project is Now 10.62 Percent
VANCOUVER, BRITISH COLUMBIA--Further to the news release of
December 10, 1997, Island-Arc has reached agreement with Asia
Minerals Corporation to acquire its 1.72 percent interest in the
Back Lake Claims in the Northwest Territories. Consideration to
be paid is $62,500 and 85,000 shares. This transaction completes
Island-Arc's buyouts of all the minority interests in the Back Lake Claims. /T/
Ownership is now:Island-Arc Resources Corporation 10.62 percent
Kalahari Resources Inc. 19.38 percent
SouthernEra Resources Ltd. 70.00 percent/T/
SouthernEra is Operator of the project and is responsible for all
exploration expenditures until a production decision is made on
the Back Lake Claims. Kennecott Canada Inc., from which
SouthernEra obtained its rights, has the right to back in for a 35
percent interest in the claims if a commercial diamond discovery
is made by SouthernEra on the Back Lake Claims.
Separately, Island-Arc has borrowed $65,000 from an arm's length
party and $100,000 from companies controlled by a director. The
loans have a three month term and bear interest at 10 percent per
annum. The lenders will be paid a bonus for these unsecured loans
in share purchase warrants in such number and at such price as
permitted by Exchange policies.
The acquisition agreement and issuance of the bonus warrants is
subject to regulatory acceptance. ON BEHALF OF THE BOARD OF DIRECTORS
OF ISLAND-ARC RESOURCES CORPORATION Kim M. Phillips, President
Regards |
