Huldra Silver Inc. (TSX VENTURE: HDA) (the "Company" or "Huldra")
is pleased to announce that it has entered into a definitive
strategic acquisition agreement dated March 30, 2011 (the
"Agreement") with Craigmont Holdings Ltd. ("Craigmont"), the
shareholders of Craigmont, Craigmont Mines Ltd. ("CML") and a
wholly-owned subsidiary of Huldra whereby Huldra has agreed to
acquire all of the shares of Craigmont from the Craigmont
shareholders for aggregate cash consideration of $7,500,000 and the
issuance of an aggregate of 372,000 common shares of Huldra (each,
a "Share") having a value equal to $500,000 (the "Transaction").
Craigmont holds real property, mineral claims and mineral leases,
covering approximately 8,400 hectares (collectively, the "Craigmont
Property"), located in south central British Columbia,
approximately 10 kilometers west of Merritt. As soon as practicable
after closing of the Transaction (the "Closing"), Huldra intends to
commence the planning and construction of a mill on the Craigmont
Property.
Upon entry into the Agreement, Huldra made an aggregate cash
payment of $500,000 to the Craigmont shareholders, which amount
will be held in escrow until the Closing and will be returned to
Huldra in the event that the Transaction does not close. At
Closing, Huldra will issue the Craigmont shareholders 372,000
Shares, at a deemed price of $1.34 per Share, for a total aggregate
value of $500,000. On or prior to January 31, 2012, Huldra will
make a second cash payment of $3,000,000 to the Shareholders (the
"Second Payment"). The $4,000,000 balance of the Cash Consideration
(the "Third Payment") will be payable by Huldra to the Craigmont
shareholders on or prior to January 31, 2013. The amount of the
Third Payment may be reduced by a maximum of $900,000 subject to a
determination of: (i) reclamation plan costs to be set out in a
Liability Cost Estimate (as defined in the Agreement) to be
commissioned by Huldra in consultation with the Shareholders; and
(ii) amounts set out in the Liability Cost Estimate that have been
remedied by the Craigmont shareholders at their own expense prior
to January 31, 2013.
Huldra president, Ryan Sharp, said, "This Agreement is a major
milestone for Huldra. Since March, 2010, we have been reviewing our
operational plans for the mining operation at Treasure Mountain and
determined that the milling operations should be conducted closer
to the necessary infrastructure. The Craigmont Property is only 75
minutes from the Treasure Mountain Mine and all necessary road use
agreements are in place for transporting the raw ore to the site
for milling."
"We are very pleased that the Agreement allows us to work
alongside Craigmont without affecting their operations while
forwarding our development plans. The Agreement also allows both
sides to mutually benefit from any potential upside unrelated to
each company's current operational focus. Through the Agreement, we
have built a strong working relationship with the Craigmont team
and look forward to enhancing that relationship going forward."
Craigmont's president, Barry Smythe, said, "Craigmont looks
forward to developing a close working relationship with Huldra, for
the mutual benefit of both organizations."
Closing of the Transaction is expected to occur on or prior to
May 1, 2011. Closing will be subject to a variety of conditions,
including the approval of the TSX Venture Exchange, approval of the
boards of Huldra and Craigmont, and satisfactory completion of
customary due diligence.
At Closing, Huldra will grant the Craigmont shareholders a
security interest in their respective Craigmont shares and a
mortgage on the Craigmont Property to secure the payment of the
Second Payment and Third Payment.
At Closing, Huldra, CML and the Craigmont shareholders, as
participants in Craigmont Mines (A Joint Venture) ("CMJV"), will
enter into a mineral rights agreement pursuant to which:
(i) CML, as nominee for CMJV, will assign its payment and other
rights under a pre-existing gravel agreement to Craigmont;
(ii) until June 2014, CMJV will be entitled to 80% and Huldra
will be entitled to 20% of any net income derived from the
commercial exploitation of tailings located on the Craigmont
Property, other than income derived from CMJV's existing magnetite
operations, provided that Huldra will be entitled to receive 100%
of any revenues derived from tailings placed on the Craigmont
Property as the result of Huldra's activities thereon. If, prior to
June 2014, CMJV finds a commercial use for the tailings, Huldra and
CMJV will continue to exploit the tailings for such use and each of
them will be entitled to 50% of the net income therefrom until 2019
when CMJV's interest in the tailings will cease; and
(iii) CML and CMJV will continue to conduct existing magnetite
recovery operations on the Craigmont Property until January 31,
2013, with CMJV entitled to 100% of the revenues therefrom.
About Craigmont Mines
Craigmont Mines, A Joint Venture, is currently engaged in the
recovery of magnetite from the Craigmont Property referred to
above, located near Merritt BC. Under the proposed Transaction, it
is intended that the Craigmont Mines Joint Venture will complete
the recovery of all of the magnetite from its remaining
reserves.
About Huldra
Huldra is currently working on plans to put its Treasure
Mountain Project, located 3 hours east of Vancouver, BC, into
development subject to permitting and financing. The Company is
also actively assessing other opportunities for acquisition and
development.
On behalf of the Board of Directors
Ryan Sharp, MBA, President, CEO & Director
Disclaimer for Forward-Looking Information
This press release contains projections and forward-looking
information that involve various risks and uncertainties regarding
future events such as the closing of the Transaction. Such
forward-looking information can include statements based on current
expectations involving a number of risks and uncertainties and are
not guarantees of future performance of the Company such as the
willingness of the parties to close the Transaction, satisfactory
results of the due diligence investigations by the parties to the
Transaction, current economic conditions and the state of mineral
exploration and mineral prices in general. These risks and
uncertainties could cause actual results and the Company's plans
and objectives to differ materially from those expressed in the
forward-looking information. Due to conditions precedent to
closing, and the risk that these conditions precedent will not be
satisfied, the Company can offer no assurance that it will close
the Transaction. These and all subsequent written and oral
forward-looking information are based on estimates and opinions of
management on the dates they are made and expressly qualified in
their entirety by this notice. Except as required by law, the
Company assumes no obligation to update forward-looking information
should circumstances or management's estimates or opinions
change.
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 news release.
Contacts: Huldra Silver Inc. Ryan Sharp 604-647-0142
604-647-0143 (FAX) ryan@huldrasilver.com or IR@huldrasilver.com
www.huldrasilver.com
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