Opawica agrees to financings with Barrick and Falconbridge
Opawica Explorations Inc OPW
Shares issued 9,148,933 Feb 11 close $1.40
Fri 12 Feb 99 News Release
Mr. Dan Clark reports:
Private Placement Unit Offering
Opawica Explorations Inc. is pleased to announce that Barrick Gold
Corporation has agreed to subscribe for one million units of Opiwaca at $1
per unit, for proceeds to Opawica of $1-million. Each unit consists of one
common share and one common share purchase warrant. Each warrant entitles
Barrick to purchase one common share of the company at $1.25 per share.
Warrants have a two-year term.
Option and Joint Venture Agreement
In addition, the principal terms of an agreement have been reached whereby
Barrick has the option to acquire up to a 70 per cent interest in any
Opawica property within the Valle del Cura - El Indio region of Argentina,
within the next three years. Opawica presently owns, or has under option,
over 150,000 hectares of properties in this region of Argentina.
Barrick may earn its 70 per cent interest, in the said Opawica properties,
by making cash and exploration expenditures in total of 250 per cent of all
costs incurred by Opawica, on a specific property, up to the date that
Barrick elects to exercise its option on such property. Opawica will carry
out a minimum $500,000 (U.S.) in exploration and property costs over the
next two field seasons on its 150,000-hectare Valle del Cura property
holdings and toward assessing other properties for possible acquisition.
The transactions noted above are subject to final documentation and
regulatory approval.
TRANSACTIONS WITH FALCONBRIDGE LIMITED
In addition, Opawica is pleased to announce that it has entered into an
agreement with Falconbridge Limited whereby the company and Falconbridge
have agreed to proceed with the following transactions:
Private Placement Unit Offering
Falconbridge has agreed to subscribe for 500,000 units of the company at $1
per unit, for proceeds to Opawica of $500,000. Each unit consists of one
common share and one common share purchase warrant. Each warrant entitles
Falconbridge to purchase one common share of the company at $1.25 per
share. warrants have a two-year term.
Chance - Whitestar Agreement
Under this agreement Falconbridge has granted Opawica an option to acquire
a 40 per cent interest in the mineral and mining rights to Falconbridge's
Chance properties referred to as Chance and Falco No. 1. These properties
are adjacent to Opawica's (100 per cent) Whitestar No. 1 and No. 2
properties and collectively the four Falconbridge-Opawica properties,
together with Falconbridge's Falco No. 2 property, form one contiguous
block of approximately three square kilometres and are situated about 1,000
metres west of Falconbridge's Kidd Creek mine (global reserve: 148 million
tonnes of 2.38 per cent Cu, 6.18 per cent Zn, and 84 grams per tonne Ag).
Opawica may earn its 40 per cent interest in the Chance and Falco No. 1
properties by paying Falconbridge, within the next 30 days, a total of
$900,000 in cash and exploration advances. In addition, the above
Chance-Whitestar agreement grants Opawica the option to earn a 40 per cent
interest in the mineral rights, below 1,000 metres, to Falco No. 2 which is
situated between Whitestar No. 1 and No. 2 and presently forms a part of
the Kidd Creek mine property. Opawica may vest its interest in the Falco
No. 2 property by incurring the first $1-million in underground development
and/or exploration, if warranted, over the next five years.
Pursuant to the current Chance-Whitestar proposed field program,
Falconbridge, as operator, has agreed to carry out $600,000 in exploration
on the five Falconbridge-Opawica properties mentioned above. Primarily, the
current program consists of up to six deep drill holes on the Chance
property. This 100 per cent Falconbridge property (10 per cent net profit
interest - Opawica) has a mineral inventory of 176,900 tonnes grading 12.8
per cent Zn, 3.24 per cent Pb and 178 grams per tonne Ag to a depth of 350
metres. The drill targets and potential at Chance and adjoining Opawica
properties lies at depth.
The Chance property has never been adequately drilled to depth. Limited
drilling on Chance in the mid-1980s lead to a geologic interpretation that
the mineralization was cut off at a depth of 380 metres. It is now
recognized that this may not be the case. The program at Chance is
scheduled to commence prior to the end of February 1999.
Further to the above cash and exploration advances to be made by Opawica to
Falconbridge, Opawica has agreed to cancel its 10 per cent net profit
interest in Chance as well as provide Falconbridge the option to earn a 60
per cent interest in Opawica's Whitestar No. 1 and No. 2 properties as well
as a 70 per cent interest in nine further properties owned or under option
by Opawica in Kidd and Carnegie Townships as outlined under the following
agreement.
Opawica - JPS and Falconbridge Agreement
Falconbridge may earn a 70 per cent interest in nine further properties,
100 per cent owned or under option by Opawica, in Kidd and Carnegie
Townships in Ontario by Falconbridge committing to a firm $300,000
expenditure consisting of $100,000 in property payments to underlying
vendors and $200,000 in exploration on these nine Opawica properties within
a two-year period. Three of these nine Opawica properties have known drill
targets and the current field program will test, by drilling, at least one
of the electromagnetic anomalies.
Joint Ventures and Miscellaneous
Upon a party earning its interest in a property under either of the above
agreements, Falconbridge and Opawica will form a joint venture and
operating agreement. Standard dilution formulas would apply and would see a
party that dilutes to a 15 per cent interest, or less, convert to a 2 per
cent net smelter return royalty. In the event that Falconbridge's interest
is diluted, Falconbridge will retain a onetime right, within a five-year
period, to reinstate its original 60 per cent interest by paying Opawica
three times its expenditures, or alternatively, elect to back into a 51 per
cent interest by reimbursing Opawica for twice its expenditures.
In addition, in the event that an economic ore reserve is outlined on any
Falconbridge-Opawica joint venture property, the parties have agreed to
bring such economic ore reserve into commercial production, on a timely
basis, using the Kidd mine and metallurgical site for all compatible ores
that originate from joint venture properties.
The above agreements are subject to the completion of final documentation
and regulatory approval.
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com
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