Ventures Resource Corporation today announced that Teck Corporation has agreed to invest C$4.1 million in Ventures
For Immediate Release
November 24, 1997
VSE Symbol ÿ VRS
U.S. 12G ÿ 82-4575
Morristown, New Jersey - Ventures Resource Corporation today announced that Teck Corporation has agreed to invest C$4.1 million in Ventures. In addition, Teck has been granted warrants that may increase the total investment to C$7.6 million over the next two years.
Eighty-five percent of the proceeds will be applied to Ventures' Veta block. Following the exploration phase of this agreement, Teck is entitled to select and earn a 60% interest in one project upon the completion of a feasibility study. The Veta block contains two mid-stage projects (MSPs) and 24 early stage prospects. It is located in east central Alaska to the east of the Sumitomo/Teck Pogo gold development project and covers approximately 1,500 square miles between Pogo and the Yukon border.
"This transaction provides the financing required to thoroughly explore our Veta property. Concurrently it provides Ventures with the flexibility to pursue similar arrangements with other companies on its five other property blocks," said Greg Sheardown, Ventures President and CEO. "Ventures shareholders retain the majority of the potential value created through exploration success in the block. Teck and future investment partners gain access to Ventures diversified exploration portfolio in a pro-development state with a heritage of successful mines."
In total, Ventures has exclusive mineral rights to six blocks of land in Alaska, representing over three million acres, through an agreement with Doyon, Limited. The Company's holdings include 17 MSPs and 92 early stage prospects.
Terms of the agreement include:
- Teck purchases 3,763,700 shares at C$1.10 per (C$4,140,070).
- Teck granted 1,380,000 one year share purchase warrants at C$1.25 per (C$1,725,000) and 1,267,850 two year warrants at C$1.40 per (C$1,774,990).
- If all warrants exercised, Teck entitled to designate one project and complete a bankable feasibility study at its cost.
- Upon completion of a bankable feasibility study, Teck will have earned a 60% interest in the designated project, subject to certain back in rights of Doyon, Limited.
- Teck may earn an additional 10% interest in the designated project by arranging Ventures share of construction financing.
- Teck to be granted the first right of negotiation on additional projects on the Veta block if all warrants are exercised.
- Teck's shares in Ventures are restricted from resale for two years.
- Teck is limited to selling a maximum of 250,000 shares annually after the hold period; Ventures has the right to designate a buyer for all other sales for a limited period.
- WGM Inc., the Alaskan subsidiary of Watts, Griffis and McOuat will continue to execute the exploration program that will be jointly managed by Teck and Ventures.
- The transaction is subject to normal due diligence and regulatory approval.
Ventures Resource Corporation is a North American exploration company dedicated to building shareholder value through the discovery of mineral deposits.
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