June 07, 2016 10:19 ET
MONTREAL, QUEBEC–(Marketwired – June 7, 2016) – MDN Inc. (the “Company”) (TSX VENTURE:MDN) is pleased to announce that it has signed a definitive property purchase agreement (the “Agreement”) to acquire the Argor property (the “Property”) from Barrick Gold Inc., James Bay Columbium Ltd. and Goldcorp Inc. (the “Sellers”).
The Argor property is located in the James Bay Lowlands in Northern Ontario. Historic exploratory and detailed drilling totalling over 14,000 meters was completed in the 1960s. 85 holes were drilled at a maximum depth of 275 meters, in sections of 61 meters intervals along a strike of 730 meters. A historic estimate was finalized by Dr. P. Price of Canadian Bechtel Ltd in 1967 and indicated 62 million tonnes at 0.52% Nb2O5. Moreover, an exploration shaft was sunk and a 250 tonne bulk sample was extracted to subsequently be used in a pilot plant which demonstrated a high recovery rate of 78%.
Upon closing of the transaction, subject to the consent of the Province of Ontario for the transfer of the mining lease comprising the Property and the TSX Venture Exchange approval, the Sellers will transfer 100% of the asset to MDN. In consideration, MDN will issue to the Sellers 5,000,000 common shares in the capital of MDN and will pay to the Sellers a cash consideration of C$25,000.
In addition to the shares and cash consideration the Sellers retain a 2.0% net smelter returns royalty (the “Royalty”) over all minerals produced from the Property. MDN has the right to buy-back 1% of the Royalty for the sum of C$2,000,000 (in constant 2016 dollars, subject to a cap of C$3,000,000) at any time.
Moreover, the Sellers have the right to re-acquire a 51% interest in the Property (the “Back-in Right”), in case of the establishment on the Property of one or more deposits containing no less than 2 million gold ounces and/or gold equivalent ounces of resources in aggregate, upon payment by the Seller to the Buyer of 2.5 times Buyer’s expenditures incurred on the Property. The Back-In Right does not apply to the niobium content.
“We are pleased to finalise the acquisition of Argor,” said Claude Dufresne, President and CEO. “The quality of the mineral is such that we strongly believe Argor has the potential to become the second North American producer of Ferro niobium,” added Mr. Dufresne.
Claude Dufresne, Engineer, acted as the qualified person as defined in National Instrument 43-101 (“NI 43-101”). He reviewed and approved the technical and scientific content of this press release.
The historical resources estimate, the historical feasibility and the historical metallurgical testing are based on data obtained by previous operators in the 1960s. MDN has not yet undertaken the work necessary to verify or classify those historical results. Economic studies completed in the 1960s do not mean the Argor deposit would be found to be economic today. MDN is not treating the historical results as a current mineral resource nor as having been verified by a qualified person.
About MDN (TSX VENTURE:MDN)
MDN Inc. is a mining exploration and development company with properties in Quebec and in Tanzania. In Quebec, MDN holds a 72.5% interest in Crevier Minerals Inc., which owns a NI 43-101 niobium tantalum resource and 100% of the Samaqua property.
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This press release contains forward-looking statements. Such statements are not guarantees of future performance, and actual results may differ materially from those in the forward-looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements are discussed in greater detail in the Company’s most recent Annual Information Form filed on SEDAR. Investors and others who base themselves on the Company’s forward-looking statements should carefully consider the factors mentioned in the Annual Information Form, as well as the uncertainties they represent and the risk they entail. The Company believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct, and as such, the forward-looking statements in this press release should not be unduly relied upon. These statements speak only as of the date of this press release.