Dianor Resources to Acquire Surface Rights to Leadbetter Extension Propertyadmin
Tuesday, August 19th 2008
Dianor Resources Inc. announce that it has signed an agreement in principle with Mr. Joseph Leadbetter and persons associated with him pursuant to which they have agreed to sell the surface rights to the Leadbetter Extension Property to Dianor. The Leadbetter Extension Property is the subject of a property option agreement entered into by Dianor in March 2005 (press release March 2nd, 2005), as amended. In order to acquire the surface rights, Dianor is required to pay persons associated with Mr. Leadbetter a total of $5 million under a five-year payment schedule which runs until August 13, 2012.
The agreement in principle also provides that the parties will amend the two property option agreements under which Dianor can earn an 80% undivided interest in the Leadbetter Property and a 70% undivided interest in the Leadbetter Extension Property. It is contemplated that the amendments will specify that at such time as Dianor had made all payments under the two property option agreements, 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 agreement in principle provides that, subject to regulatory approval, Dianor will accelerate its final payment of $1.5 million in cash and shares under the two property option agreements, currently scheduled to be made on January 16, 2009, to no later than October 31, 2008. 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 3.87%.
The agreement in principle further provides that an Excavation Contract between Dianor and a company controlled by Mr. Leadbetter will be suspended. Mr. Leadbetter and his associates have also agreed to give irrevocable proxies to management in connection with Dianor’s annual general meeting of shareholders to be held on August 27, 2008.
The agreement in principle also provides that in the case of a merger, amalgamation, change in control, successful takeover 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 agreement will become immediately due and payable at their sole and exclusive option, exercised on 30 days’ notice.
Closing of the transaction is conditional upon the signing of definitive agreements by no later than August 25, 2008.
Dianor is an innovative exploration company focused on advancing diamond exploration properties in Canada. The Leadbetter Diamond Project is its most advanced project and is located 12 kilometres north-east of Wawa in Northern Ontario. Substantial exploration work has been conducted on the property and the Company is about to undertake an HQ core drilling programme and is in the process of permitting a 34,000 tonne bulk sampling programme. In addition to diamonds, it contains gold, sapphires and rubies (press release January 18th, 2007). New diamond discoveries by the Company in rocks of similar type, age (Archean) and geological settings (press release March 3rd, 2008) in Quebec have added further diamond properties to our portfolio of low-cost, accessible exploration targets. These diamond discoveries (Ontario and Quebec) are both unique and amongst the oldest diamond-bearing occurrences in the world.