MELFORT, SK,
March 6, 2014 /CNW/ - Hodgins
Auctioneers Inc. ("Hodgins" or the "Corporation")
(TSXV: HA) wishes to announce that it has entered into a
conditional agreement with Majesta Resources Inc. ("Majesta") to
acquire a 25% undivided interest in a group of nine contiguous
mineral claims with a combined total of 39,125 hectares (98,233
acres) ("Majesta Mineral Claims") located 230 km NW of La Ronge and 445 km north of Prince Albert, Saskatchewan. The
northeastern corner of the claims are 10 km from the Key Lake
uranium mill.
The Corporation considers the Majesta mineral
claims to be in a favourable geological setting because they are on
strike with high grade Athabasca
Basin uranium discoveries. The basin is a premier geological
district famous for the world's richest uranium deposits,
politically stable government and a well established exploration
and mining industry.
The Corporation is making this unique
acquisition because of the low cost relative to similar
transactions in the area due to the relationship between two of the
insiders of the Corporation and the party which owns the mineral
claims. The acquisition will not constitute a "Change of
Business" as defined in the TSX Venture Exchange ("TSXV") policies.
The transaction is conditional upon TSXV approval and the raising
of $350,000 by non-brokered private
placement.
The technical information in this news release
has been prepared in accordance with the Canadian regulatory
requirements set out in National Instrument 43-101 and reviewed on
behalf of the Corporation by Andrew
Gracie, P. Geo., Consulting Geoscientist, a qualified
person.
Terms of the Agreement
The Corporation is purchasing a 25% undivided
interest and acquiring two options (the "Options") to acquire up to
an additional 65% . The Corporation will be required to issue
2,000,000 common shares at a deemed price of $0.05 per share for the 25% undivided
interest. Majesta will be the operator and will conduct
all exploration activities under the terms of a joint operating
agreement. Any party failing to make cash call are subject to
dilution of their respective working interest. If any party
is diluted below an undivided 10% their interest is converted to a
0.75% net smelter royalty which can be purchased for fair market
value. The Corporation will issue additional shares to Majesta,
along with cash and required work commitments, upon exercise of the
Options as follows:
Nature of
Transaction |
Interest |
Date |
Cash or
Assumption of
Debt |
Common
Shares |
Exploration
Work
Commitments |
Total |
Purchase |
25% |
February 20, 2014 |
up to $100,000 of
debt |
2,000,000 |
$300,000 |
$400,000 |
Option #1 |
35% |
December 31,2014 |
Nil |
4,000,000 |
$400,000 |
$400,000 |
Option #2 |
30% |
December 31, 2015 |
$400,000 |
2,000,000 |
Nil |
$400,000 |
|
90% |
|
$500,000 |
8,000,000 |
$700,000 |
$1,200,000 |
The Corporation has not acquired a valuation of
the claims. Majesta, a Saskatchewan corporation, staked the claims in
2008 at a cost of $83,000. The annual
expenditure required to maintain the claims is approximately
$350,000 per year. Majesta has
maintained the claims for more than 5 years. In part, by spending
their own money, and by having others carry out exploration
on the claims. In 2010, Majesta entered into an option
agreement with Kirrin Resources Inc. which traded on the TSXV
under the symbol "KYM". Kirrin spent approximately $1,300,000 on the property and then did not raise
further funds to continue exploration and maintain its rights under
the option agreement.
Interest of Insiders in Majesta
Grant Hodgins and
Barrie Jung are officers and
directors of the Corporation. Grant
Hodgins and Barrie Jung,
directly or indirectly, own 33.8% of the issued (12,948,500) and
outstanding shares of the Corporation. Grant Hodgins is an officer and director of
Majesta. Grant Hodgins and
Barrie Jung own 33.66% of the common
shares of Majesta.
Randy Studer is a
director and officer of Majesta. Randy Studer, directly or indirectly, and
together with family members own 64.79% of the common shares of
Majesta. Randy Studer lives in
La Ronge, Saskatchewan, and his
primary occupation for 35 years has been conducting exploration
work for mining companies, through a legal entity called Durama
Enterprises Limited. Randy Studer
was a director and president of a publicly owned mining exploration
company on the TSXV from 1995 to 2006 (Explor Resources Inc.
"EXS"). Mr. Studer will not become an officer and director of the
Corporation. Mr. Studer will not become a control person of
the Corporation.
Majesta Mineral Claims
Majesta holds 100% interest in the Majesta
Mineral Claims, as listed in the following table.
Claim
number |
Area
(Hectares) |
Map Sheet
NTS |
Recording
Date |
Anniversary |
Annual
Assessment |
Assessment
Credit |
Assessment
Required
2014 |
S-110101 |
4001 |
74G-1 |
25/04/2007 |
25/04/2014 |
$60,015 |
$0 |
$60,015 |
S-110715 |
3495 |
74G-1, 74H-4 |
25/04/2007 |
25/04/2014 |
$52,425 |
$0 |
$52,425 |
S-110716 |
5398 |
74G-1 |
25/04/2007 |
25/04/2014 |
$80,970 |
$3,506 |
$77,464 |
S-110717 |
5186 |
74G-1 |
25/04/2007 |
25/04/2014 |
$77,790 |
$0 |
$77,790 |
S-110891 |
4326 |
74G-1 |
25/05/2007 |
25/05/2014 |
$64,890 |
$0 |
$64,890 |
S-110892 |
4655 |
74G-1 |
25/05/2007 |
25/05/2014 |
$69,825 |
$0 |
$69,825 |
S-110894 |
5545 |
74G-1, 74B-16 |
25/05/2007 |
25/05/2014 |
$83,175 |
$0 |
$83,175 |
S-111627 |
2334 |
74B-16 |
27/09/2010 |
27/09/2014 |
$35,010 |
$7,530 |
$27,480 |
S-112322 |
4185 |
74H-4, 74G-1 |
09/09/2011 |
09/09/2014 |
$62,775 |
$9,780 |
$52,995 |
|
39125 |
|
|
|
$586,875 |
$20,816 |
$566,059 |
Majesta does not own the minerals. The
Government of Saskatchewan issues
a claim by which Majesta has the right to explore, develop and
exploit minerals on the mineral claims and such other rights
attributed to a "claim" as defined by Part VI the Mineral
Tenure Registry Regulations (Saskatchewan) Chapter C-50.2 Regulation 27
(effective December 1, 2012)(as
amended by Saskatchewan Regulation 70/2013) promulgated under the
Crown Minerals Act (Saskatchewan)
Chapter 50.2 (subject to any transitional provisions contained in
The Mineral Disposition Regulations 1986 (Saskatchewan).
Under the provisions of the Crown Minerals Act
(Saskatchewan), the
Province of Saskatchewan owns the
minerals. The Government of Saskatchewan provides the holder of a mineral
claim certain rights for a 1 year period. There is no
obligation to conduct exploration work. The one year period
can be extended indefinitely for further 1 year periods provided
the holder:
(a) Expend a set sum of money each year on
exploration; and
(b) The holder reports the expenditure
within the defined period and the expenditures are accepted by the
Province of Saskatchewan as
qualifying expenditures.
The one year period will be extended for a
period determined by dividing the qualifying expenditures by the
annual requirement. Expenditures can be allocated from claim
to claim subject to certain limitations.
Private Placement
The Corporation has sought TSXV approval for a
proposed non-brokered private placement of up to 7,000,000 units at
a price $0.05 per unit for gross
proceeds of up to $350,000.
Five of seven of every common share issued has flow through
attributes. Each unit will be comprised of one common share in the
capital of Hodgins and one half of one common share purchase
warrant. Each full warrant will entitle the holder to
purchase one common share at a price of $0.075 per common share exercisable no later than
the date that is one year from the date of issuance of such warrant
provided. All of the securities issued under the private
placement will be subject to a four month resale restriction and
will contain a legend which will detail the resale
restriction. There is no minimum subscription under the
private placement and Hodgins may close the offering in several
tranches, however, the private placement must be concluded by
April 20, 2014. The proceeds of the
private placement will be used to make the claims acquisition.
In connection with this private placement,
Hodgins will pay cash finder's fees equal to 8% of the funds raised
to eligible finders who introduce subscribers to the private
placement and issue one common share and one finder's fee warrant
for every 10 units issued to eligible subscribers. Each
finder's fee warrant will be issued to finders on the same terms as
the warrants comprising the units.
About Hodgins Auctioneers Inc.
Hodgins Auctioneers is an auction company
conducting business in Western
Canada.
Reader Advisory
Except for statements of historical fact,
this news release contains certain "forward-looking information"
within the meaning of applicable securities law. Forward-looking
information is frequently characterized by words such as "plan",
"expect", "project", "intend", "believe", "anticipate", "estimate"
and other similar words, or statements that certain events or
conditions "may" or "will" occur. In particular,
forward-looking information in this press release includes, but is
not limited to, statements with respect to the timing and
completion of the proposed private placement and related
information. Although we believe that the expectations reflected in
the forward-looking information are reasonable, there can be no
assurance that such expectations will prove to be correct. We
cannot guarantee future results, performance or achievements.
Consequently, there is no representation that the actual results
achieved will be the same, in whole or in part, as those set out in
the forward-looking information.
The forward-looking information contained in
this news release is expressly qualified by this cautionary
statement. We undertake no duty to update any of the
forward-looking information to conform such information to actual
results or to changes in our expectations except as otherwise
required by applicable securities legislation.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release)
SOURCE Hodgins Auctioneers Inc.