Melkior Closes Acquisition of McFaulds East Rim Nickel and West Rim Nickel Propertiesadmin
Melkior Resources Inc. to announce the successful closing of the acquisition of a 100% interest in the East Rim Nickel property and of a 50% interest in the West Rim Nickel property. Pursuant to an agreement dated April 9, 2008 as amended on June 2, 2008, the acquisition was made in consideration for a payment of $306,000 in cash and the issuance of 2,500,000 common shares of Melkior.
Melkior closed the transaction immediately upon approval by the TSX Venture Exchange in the light of the time remaining in the current exploration works season.
As previously announced on March 27, 2008 and on May 6, 2008, the East Rim Nickel property consists of 1,355 claim units totalling 21,680 hectares in the McFauld’s Lake “Ring of Fire” area of Northern Ontario. The property is subject to a 2% net smelter return royalty, half (1%) of which can be bought back by Melkior for $2,000,000. The East Rim Nickel property is located 30 kilometres northeast of the Noront Discoveries and covers a significant portion of a major gravity anomaly.
The West Rim Nickel property consists of 916 claim units totalling 14,656 hectares. Melkior acquired a 50% interest subject to a 1% net smelter return royalty, half (0.5%) of which can be bought back by Melkior for $1,000,000. The remaining 50% interest is held by Bold Ventures Inc. pursuant to an agreement entered in March 12, 2008. The West Rim Nickel property is 20 km due north of the Noront Double Eagle discovery and covers most of a second significant gravity anomaly within the “Ring of Fire”.
Two of the six vendors of the East Rim Nickel and West Rim Nickel properties are related parties of Melkior, namely, Geotest Corporation (“Geotest”), whose president and director is Jens Hansen, also President of Melkior, and Norman Farrell, who is also a director of Melkior. The transaction therefore constituted a “related party transaction” within the meaning of Regulation 61-101 respecting protection of minority security holders in special transactions, which was exempted from the formal evaluation and from the minority approval with regards to the acquisition of the properties, as neither the fair market value of the securities being issued nor the consideration paid, insofar as the transaction involves Mr. Farrell and Geotest, exceeded 25% of Melkior’s market capitalization.
Norman Farrell and Geotest have received for their interest in the properties, an amount equal to their respective contribution of the costs for the staking of the properties, namely respectively $25,000 and $85,000, representing approximately 36% of the total purchase price. Neither of them have received any common shares of Melkior with regards to the acquisition of the properties.
The other four vendors are North American Exploration Ltd., Geovector Management Inc., Wade Kornik and Nathalie Hansen.
No finder’s fee has been paid with regards to the acquisition of the properties.