Pele Mountain Enters Agreement to Sell Attawapiskat River Diamond Project to KWG Resourcesadmin
Pele Mountain Resources (TSX Venture:GEM) (“Pele” or the “Company”) announced today that it has entered into an agreement with KWG Resources Inc. (TSX Venture:KWG) (“KWG”) to sell its Attawapiskat River Diamond Project (the “Project”) to KWG. The Attawapiskat River project is comprised of 47 mining claims covering more than 25,000 acres in the James Bay Lowlands of northern Ontario, adjacent to KWG’s MacFadyen Kimberlite project and near De Beers’ Victor Diamond Mine.
Al Shefsky, President and CEO of Pele stated, “This Agreement between Pele and KWG provides substantial value for both companies. For KWG, it consolidates a large group of mining claims that cover the northwest extension of an important linear structure that hosts both the Victor Mine and KWG’s diamond-bearing MacFadyen kimberlite pipes. For Pele, it provides exposure to KWG’s northern Ontario mineral projects as well as to its operational and exploration expertise which has led to the discovery of several diamond bearing kimberlites in the James Bay Lowlands.
As consideration for the sale, KWG has agreed to: (i) pay a total of $1,012,786, to be satisfied by the issuance to Pele of 10,127,860 common shares of KWG (the “KWG Shares”) at an attributed issue price of $0.10 per share; and (ii) grant to Pele a 1-percent Net Products Royalty (the “NPR”) in the Project. KWG retains the right to buy back up to 50% of the NPR (a 0.5% NPR) for a total of $5-million. The KWG Shares issued to Pele are subject to the standard four-month statutory hold period from the date of issuance, which shall run concurrently with the contractual 1-year hold period (the “Contractual Hold Period”) agreed to between Pele and KWG. Following the expiry of the Contractual Hold Period, Pele has agreed to not sell more than 500,000 KWG Shares in any consecutive five business day period (the “Weekly Allowance”). KWG Shares offered for sale in excess of the Weekly Allowance are subject to KWG’s right of first refusal. The completion of the purchase and sale of the Project remains subject to regulatory acceptance of applicable filings.
Pele Mountain Resources is focused on mineral exploration within the established mining camps of northern Ontario. Pele has acquired and developed a diverse portfolio of diamond, gold, base metal, and uranium properties which provide exposure and leverage both to discovery and to the increased global demand for natural resources. Pele is active on several project fronts, including Company-operated gold and diamond exploration at Highland, diamond exploration at Festival and Alliance funded by Goldcorp and Trigon Exploration Canada, gold and base metal exploration at Ardeen funded by Maple Minerals Corp and East-West Resource Corporation, and Ni-Cu-PGE exploration at Sudbury funded by Wallbridge Mining Company Ltd. Pele stock trades on the TSX Venture Exchange under the symbol “GEM”.
For further information please contact Al Shefsky, President, at (416) 368-7224, or visit the Pele website at www.pelemountain.com
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. Some of the statements contained in this release are forward-looking statements, such as estimates and statements that describe Pele’s future plans, objectives or goals, including words to the effect that Pele or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements