At the same time that Montello made a deal with Kennecott -Kennecott made a deal with Intertech for a property up in the Lac Des Gras area -here it is for comparison with Montellos deal -they are reasonably similiar. Intertech is IML on VSE. JP
News Releases
VSE Symbol - IML
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July 28, 1998
OPTION TO JOINT VENTURE
Intertech Minerals Corp. (the "Company") is pleased to announce that it has entered into a Letter Agreement with Kennecott Canada Exploration Inc. ("Kennecott") pursuant to which the Company has granted Kennecott an option (the "Option") to acquire an undivided 60% interest in the DA 1-30, 36-49, 60-66 and DAA 1 mineral claims, for a total of 129,951.64 acres (collectively the "Afridi Lake Property"), in the Lac de Gras area, NWT, some 320 Km N50§E of Yellowknife. The Company holds a 100% recorded and undivided 90% beneficial interest in the claims, subject to a 5% GOR Interest and a 10% Carried interest owned by 421346 BC Ltd., the original property vendor.
Pursuant to the terms of the proposed option, Kennecott must make, upon closing, a private placement in Intertech of C$300,000. Kennecott will receive units of Intertech common stock, such units consisting of one share of common stock at a price of C$0.65 and one share purchase warrant exercisable at C$1.25 at any time prior to July 19, 2000.
As further consideration for granting the Option, Kennecott is required to make all exploration expenditures up to a total of C$25,000,000 or, bring the project to a decision to begin construction and development of a mine, whichever shall occur first. As part of this total, Kennecott has agreed to incur an expenditure of C$ 1 Million within 12 months, and C$5 Million within 5 years of signing the Option Agreement. During the earn-in period, Kennecott will manage all exploration activities; after Kennecott's interest is vested, a joint venture will be formed, with Kennecott as manager, and activities will be funded by the parties in relation to their participating interest. As manager of the joint venture, Kennecott will market all diamonds produced, by the joint venture, from within the boundaries of the Afridi Lake Property.
In addition, the Company has negotiated an agreement with 421346 BC Ltd. whereby 421346 BC Ltd. will grant to Intertech an option (the "Royalty Reduction Option") to reduce the GOR Interest from 5% to 2% and eliminate entirely the 10% Carried Interest. In consideration for granting the Royalty Reduction Option, the Company will issue to 421346 BC Ltd. a total of 1 million shares staged as follows:
300,000 shares upon signing an option/agreement with Kennecott.
300,000 shares upon completion of a bulk sample, the results of which warrant further work on the target being sampled.
400,000 shares upon the completion of a positive pre-feasibility study.
This Royalty Reduction Option may be exercised at any time up to 90 days following the day on which Intertech and Kennecott publicly announce a decision to place the property into commercial production as a mine by paying to 421346 BC Ltd the following amounts, all of which will be provided by Kennecott:
C$3 million in cash to reduce the GOR to 2% and;
C$3 million in cash to eliminate the Carried Interest.
The Royalty Reduction Option will have an initial term of 10 years with the above noted conditions. Should the option not be exercised within this time period, then Intertech will make five annual advance royalty option payments of $105,000, for a total of $525,000, to 421346 BC Ltd, with any such payments to be credited against the $6 million option exercise payment. Closing of the Option Agreement with Kennecott is subject to Intertech finalizing this agreement.
The DA and DAA claims, are strategically located in the Slave Structural Province on a 300 km long, northwest trending zone, informally referred to as the "Corridor of Hope", within which over 140 kimberlite intrusions have been discovered since late 1991. Included in this area are five kimberlite pipes that are currently being prepared for production by BHP Diamonds Inc. and DiaMet Minerals Ltd., and two very high grade pipes (+ 4.0 carats/tonne) on the Diavik project, owned by Diavik Diamond Mines Inc. and Aber Resources Ltd., which are located some 45km northwest of these claims. Diamondiferous kimberlite, in narrow dyke-like bodies, was discovered in the extreme northwest part of the property in early 1996, with the largest contained stone being a dodecahedral fragment measuring 1.12 mm x 0.83 mm x 0.24 mm.
The transaction outlined above is subject to the approval of the Vancouver Stock Exchange.
INTERTECH MINERALS CORP.
John R. Fraser
President & Director
THE VANCOUVER STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT.
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