Berenguela project acquired
The deal is inked between Kappes, Cassiday and Tournigan for the Berenguela project. The exchange has halted trading while looking at some due diligence reports. (The VSE will look the deal up and down, supposedly to protect shareholders, and then at the end of it all will accept no responsibility for any approval.) The release is as follows:
Berenguela project being acquired
International Tournigan Corporation ITG
Shares issued 16,553,331 Feb 27 close $0.73
Tue 3 Mar 98
Mr Dave Bawa reports
The company has entered into an option agreement dated February 27 1998
between, among others, Tournigan and Fossores Limited, to acquire a 100%
interest in the Berenguela project in Peru.
The Berenguela project is a manganese, silver and copper mineral deposit
near Juliaca, on the altiplano of Southern Peru. The property was acquired
by the vendor in 1995 through the privatization program of Minoro Peru.
The vendor has supplied the following description of the Berenguela
project. The mineral deposit itself is a tabular body approximately 500
metres wide, 1.5km long, and 60 metres thick. There is no overburden, and
stripping ratio for mining is minimal. The orebody was mined from 1905 to
1965 and has long been recognized as a major ore deposit. Underground
workings total 17km; the primary metal recovery at that time was silver. It
was mined at an average ore grade of 25 oz per tonne. Asarco and Charter
Consolidated both drilled the property in the 1960s and completed
feasibility studies. However, the vendor believes that the Berenguela
project was not developed at that time because of political and technical
considerations. In the late 1960s the Berenguela project was nationalized
and has been unavailable for development until now.
The major highway of commerce from Peru to Bolivia - from Lima via Arequipa
and Puno - runs adjacent to the orebody. Juliaca, a town of 100,000
residents and some industry, is 50km from the Berenguela project via paved
highway. A river with sufficient water for operations and a railroad
parallel the highway and run within 5km of the Berenguela project. The
Berenguela project is in an area of rolling hills, with easy road access
and good sites for process plant and tailing ponds.
Pursuant to the terms of the agreement, Fossores granted Tournigan the
exclusive option to acquire all of the shares of Sociedad Minera
Berenguela, SA. The Berenguela company holds a 100% interest in the
Berenguela project. The agreement is subject to receipt of approval of the
VSE, which may require shareholder approval.
Upon receipt of approval from the exchange of the agreement, Tournigan will
acquire voting rights over all of the shares of the Berenguela company and
will have its nominees replace the current board of directors of the
Berenguela company. However, Tournigan will only acquires title to the
shares of the Berenguela company upon satisfying the following
requirements:
Cash Consideration
Tournigan shall pay the vendor a cash payment of US$20,000 on the last day
of each month commencing March 31 1997 until the agreement is approved by
the VSE; these payments shall later be applied against Tournigan's
obligations below.
Tournigan shall pay the vendor US$770,000 within ten days of the effective
date which shall be satisfied as follows:
a. a cash payment of US$20,000; and
b. an affiliate of the vendor shall repay to Tournigan the US$750,000
loan made by Tournigan to such affiliate in November 1997 and this
amount shall be paid to the vendor.
Share Consideration
Tournigan shall issue to the vendor up to 8,000,000 shares as follows:
1. 3,500,000 shares within 90 days of the effective date;
ii. 3,000,000 shares within 10 days of the acceptance of the feasibility
study described below by the exchange; and
iii. 1,500,000 shares within 18 months of the feasibility study acceptance
date.
Tournigan may, at its election, reduce the number of shares issuable at any
time described above by paying to the vendor before September 20 1997 a
cash payment of $1.10 in lieu of a share to a maximum reduction of
2,000,000 shares.
Feasibility Study
As soon as practical after the effective date, Tournigan shall commission
at its expense a feasibility study on the Berenguela project which is
estimated to cost approximately US$3 million and shall be completed within
30 months after the effective date.
Exploration and Feasibility Commitments
Tournigan shall have satisfied either of the following conditions:
Tournigan shall have raised at least US$2,250,000 in equity which shall be
placed in a dedicated account for the purposes of completing the
feasibility study; or
Commencing on the earlier of the effective date and July 31 1998, Tournigan
shall have spent or shall have committed to spend US$140,000 per month for
16 months on the feasibility study and on exploration, development and
maintenance of the property.
Warrant Consideration
Tournigan shall issue to the vendor a conditional warrant with the
following terms:
The conditional warrant shall become effective on the earlier of the
completion of the financing described above and the feasibility study
acceptance date.
The conditional warrant shall entitle the vendor to purchase such number of
Tournigan shares equal to one quarter of the number of Tournigan shares
outstanding on a fully diluted basis (calculated from time to time until
the earlier of the feasibility study acceptance date and expiry of the
conditional warrant) which exceed 24,000,000 Tournigan shares (as an
example, if there are 28,000,000 Tournigan shares outstanding on a fully
diluted basis, the conditional warrant shall be exercisable for 1,000,000
Tournigan shares).
The maximum number of Tournigan shares issuable upon exercise of the
conditional warrant shall be 2,000,000 Tournigan shares.
The conditional warrant shall be exercisable at $1.10 per share and expires
24 months after becoming effective.
Tournigan may elect not to satisfy any of these requirements and in such
case will forfeit its right to acquire title to the shares of the
Berenguela company.
As soon as practical after the effective date, Tournigan shall appoint two
nominees of the vendor, which shall be Don Kappes and Mike Cassiday, to the
board of directors of Tournigan. Mr Kappes and Mr Cassiday are the
principals of Kappes, Cassiday and Associates of Reno, Nevada and have been
the driving force behind the Berenguela project to date.
After acquisition of the Berenguela properly, if Tournigan elects to sell,
lease or enter into any farmout agreement relating to any or all of the
property, Tournigan shall first offer such transaction to the vendor
Tournigan is completing its due diligence of the Berenguela project and the
Berenguela company. Tournigan has retained an independent consultant to
assist with its financial and geological review of the Berenguela project
and to satisfy the requirements of the exchange.
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