Dianor Resources Signs Definitive Agreements for Acquisition of Surface Rights to Leadbetter Extension Property
Dianor Resources Inc. announce that it has signed definitive agreements for a previously-announced purchase of surface rights to the Leadbetter Extension Property from persons associated with Mr. Joseph Leadbetter and for the immediate suspension and eventual termination of an Excavation Contract between Dianor and Mr. Leadbetter (press release August 19th, 2008).
The definitive agreements for the sale of surface rights and suspension and termination of the Excavation Contract provide that Dianor is required to pay Mr. Leadbetter and persons associated with him with a total of $5 million in cash under a payment schedule which starts on January 31, 2009 and runs until November 30, 2012. The Excavation Contract will be terminated when Dianor has completed the payments.
Dianor is also pleased to announce that the parties have signed definitive agreements for the amendment of two property option agreements under which Dianor previously had the right to earn an 80% undivided interest in the Leadbetter Property and a 70% undivided interest in the Leadbetter Extension Property. As a result of the amendments and an accelerated final payment to be made at closing by Dianor to the optionors of $750,000 in cash and 8,417,461 common shares, Dianor will acquire a 100% undivided ownership interest in the Leadbetter Property and Leadbetter Extension Property, subject to a 20% gross overriding royalty (GOR) for diamonds and a 1.5% GOR for all other metals and minerals, in favour of the optionors. The Leadbetter Extension Property is also subject to a 10% royalty for all minerals in favour of a third party.
Under a previously-announced agreement entered into in April 2007 (press release April 4th, 2007), Dianor can purchase up to one-half of the 20% GOR on both properties by making cash and share payments over a period of 40 months. To date, Dianor has reduced each GOR by 4.56%.
The definitive agreements provide that in the case of a merger, amalgamation, change in control, successful take-over bid or other similar event involving Dianor, all amounts then outstanding and owing to Mr. Leadbetter and the persons associated with him by Dianor under the agreements will become immediately due and payable at their sole and exclusive option, exercised on 30 days’ notice.
Closing of the transaction will take place, and the $750,000 in cash and 8,417,461 common shares will be released to the optionors, when the transfer of the surface rights to the Leadbetter Extension Property, a related mortgage and Dianor’s ownership interest in the Leadbetter Property and Leadbetter Extension Property are registered. This is expected to occur within days.
