THUNDER BAY, ON,
Nov. 20, 2013 /CNW/ - Kesselrun
Resources Ltd. (TSXV:KES) ("Kesselrun") and Goldlund Resources Inc.
("Goldlund"), a private company incorporated in Ontario, are pleased to announce that they
have agreed to terms regarding the grant to Kesselrun of the option
to acquire an undivided 10% non-diluting interest in certain mining
claims, mining patents and mining leases comprising the Goldlund
Project located near the town of Sioux
Lookout, Ontario, in which Goldlund holds a 100%
interest.
In order to acquire its interest in the
property, Kesselrun is required to incur aggregate exploration
expenditures on the property of $1,000,000 by December 31,
2013.
The Goldlund Project contains an historic mineral resource
estimate completed by Todd McKracken
of Wardrop (now Tetra Tech) in October, 2011 (see
www.goldlund.com).
Goldund Project Mineral Resource Estimate at 0.50 g/t Au
Cut-Off Grade
Classification |
Tonnes |
Gold Grade g/t |
Contained Ounces |
Measured |
3,900,000 |
1.85 |
233,700 |
Indicated |
2,800,000 |
1.57 |
143,300 |
Measured + Indicated |
6,700,000 |
1.73 |
377,000 |
Inferred |
18,900,000 |
1.02 |
628,000 |
Kesselrun is not treating the above historic
mineral resource estimate as a mineral resource in accordance with
the standards of National Instrument 43-101, but merely as an
indication of potential mineralization on the property.
At any time after Kesselrun has acquired its
interest in the property and prior to December 31, 2015, Kesselrun shall be entitled to
transfer such interest back to Goldlund upon 15 days prior written
notice in exchange for the issuance to Kesselrun of senior
unsecured convertible debentures (the "Convertible Debentures") of
the parent company of Goldlund ("Parentco") in the principal amount
of $2,000,000. Further, in the event
that Kesselrun exercises the option and acquires its 10% interest
in the property, then at any time after December 31, 2014 and on or prior to December 31, 2017, Goldlund shall have the right
to require that Kesselrun transfer such interest back to Goldlund
(the "Back-In Right") upon 30 days prior written notice to
Kesselrun, in exchange for the issuance to Kesselrun of Convertible
Debentures of Parentco in the principal amount of $2,000,000. Goldlund shall also be entitled
to exercise the Back-In Right at any time after the earlier of (a)
Kesselrun acquiring its 10% interest in the property, and (b)
January 1, 2015, in the event that
Parentco is party to a business combination transaction, upon 30
days prior written notice to Kesselrun and payment to Kesselrun of
either $2,000,000 in cash, or at the
option of Goldlund, Convertible Debentures of Parentco in the
principal amount of $2,000,000.
Upon Kesselrun acquiring its interest, the
parties will enter into a joint venture agreement pursuant to which
Goldlund shall incur all further expenditures on the property until
it reaches commercial production. After the commencement of
commercial production, Kesselrun and Goldlund will be obligated to
contribute funds to approved programs and budgets of the joint
venture in proportion to their respective participating interests.
Goldlund will be the initial operator of the joint venture.
The Convertible Debentures of Parentco will
mature on the date which is seven years following their date of
issuance, and will earn interest at a fixed rate of 10% per annum
compounded annually. At the election of Parentco, up to 50%
of the interest may be paid by the issuance of additional
Convertible Debentures of Parentco. In the event of a
liquidity event, the principal amount and all accrued and unpaid
interest will automatically convert to common shares of Parentco or
the subsidiary of Parentco which is the subject of the liquidity
event, at a conversion price per common share that is equal to 50%
of the value of each common share as determined in the context of
such liquidity event. A liquidity event includes any of: a)
an initial public offering of common shares or units of Parentco or
a subsidiary of Parentco, b) a reverse take-over by a publicly
listed company of all the issued and outstanding shares of Parentco
or a subsidiary of Parentco, or c) the sale of a majority of the
issued and outstanding common shares of Parentco or a subsidiary of
Parentco representing a change of control. The Convertible
Debentures of Parentco will be subject to certain restrictions on
transfer, and a right of first refusal in favour of Parentco.
Subject to certain exceptions, the Convertible Debentures of
Parentco will not be redeemable prior to the third (3rd)
anniversary of the date of issuance thereof unless agreed to by the
holder, after which they will be redeemable, in cash, at the option
of Parentco at the principal amount plus all accrued and unpaid
interest.
Howard Katz,
President and CEO of Goldlund commented, "This agreement provides
Goldlund with the opportunity to substantially advance our drill
program in furtherance of a potential new resource estimate on the
Goldlund Project."
Commenting on the transaction, Michael Thompson, President & CEO of
Kesselrun stated, "We are extremely pleased to be making this
investment in the Goldlund Project. We believe that this project
and the surrounding land package have excellent exploration
upside."
The terms of this transaction remain subject to the execution of
a definitive option agreement and related documentation, and the
approval of the TSX Venture Exchange.
About Kesselrun Resources Ltd.
Kesselrun Resources is a Thunder Bay,
Ontario-based mineral exploration company focused on growth
through property acquisitions and discoveries. Kesselrun's
management team possesses strong geological and exploration
expertise with particular experience in Northwest Ontario. For more information about
Kesselrun Resources, please visit www.kesselrunresources.com.
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.
Forward Looking Statements - Certain information set forth in
this news release may contain forward-looking statements that
involve substantial known and unknown risks and uncertainties.
These forward-looking statements are subject to numerous risks and
uncertainties, certain of which are beyond the control of
Kesselrun, Goldlund and Parentco, including, but not limited to the
impact of general economic conditions, industry conditions,
volatility of commodity prices, dependence upon regulatory
approvals, the execution of definitive documentation, the
availability of financing and exploration risk. Readers are
cautioned that the assumptions used in the preparation of such
information, although considered reasonable at the time of
preparation, may prove to be imprecise and, as such, undue reliance
should not be placed on forward-looking statements.
SOURCE Kesselrun Resources Ltd.