Private Placement
As part of the Agreement, the Company is also pleased to announce that it is has completed a nonbrokered private placement financing with Newmont (through Newmont Mining Corporation of Canada Limited) of $3,502,000 by the issuance of 1,700,000 units at a price of CDN$2.06 per unit. Each unit consists of one common share (“Common Share”) and a 0.75 non-transferable common share purchase warrant (“Warrant”). Each full Warrant will entitle Newmont, or its designated affiliate, to purchase one additional Common Share for a period of two years from the closing of the private placement at a purchase price of CDN$2.50 per share. All Common Shares and non-transferable Warrants issued pursuant to the Company’s private placement of units, are subject to a regulatory hold period expiring August 26, 2008.
La Miel Joint Venture
Newmont and EMX entered into a joint venture (“JV”) for the La Miel project whereby Newmont can earn a 65% participating interest in the La Miel JV on or before six years from the effective date of the Agreement by either (i) completing a feasibility study which identifies a minimum resource containing at least 3,000,000 ounces of gold (subject to NI 43-101 resource and reserve reporting requirements) or (ii) solely funding the first US$30M in JV expenditures (“Venture Expenditures”), whichever comes first, as outlined below.
- US$1M on or before the first anniversary
- An additional US$2M on or before the second anniversary
- An additional US$3M on or before the third anniversary
- An additional US$4M on or before the fourth and each subsequent anniversary until completion
of the La Miel earn-in.
Thereafter, EMX may elect to either (i) fund its share of the Venture Expenditures, (ii) be entirely carried by Newmont, (iii) not contribute to subsequent programs and budgets and dilute its interest, or (iv) withdraw entirely from the project.
If EMX elects to be carried, Newmont will solely fund 100% of Venture Expenditures until commencement of commercial production and Newmont’s participating interest would be increased by 5%. Upon commencement of commercial production Newmont shall recover all Venture Expenditures made on EMX’s behalf, plus interest at LIBOR plus 4 percentage points, from 80% of EMX’s share dividends or distribution of earnings from the venture.
If EMX elects not to participate in financing Venture Expenditures, EMX may immediately withdraw from the La Miel JV and convert its participating interest to a 3.5% NSR and receive an advance annual minimum royalty of US$1M which shall be credited against future royalty payments to be paid to EMX.
If EMX elects to fund its share of Venture Expenditures and elects not to convert to a royalty or be carried through to production, each party shall carry its proportionate share of expenditures. Any election to not contribute by either party will be subject to standard dilution.
Within 30 days following completion of the La Miel earn-in, Newmont shall pay EMX a one time bonus of US$2M. Within 30 days following the commencement of commercial production on the La Miel project, Newmont shall pay EMX an additional one-time bonus of US$2M.
Regional Strategic Alliance and Designated Projects
Newmont and EMX will conduct a regional gold exploration program, with EMX as the operator. Newmont will contribute technical support and advice and EMX will provide staffing and logistical support. The companies will combine their regional exploration databases. During the first year, Newmont and EMX will contribute US$750,000 and US$250,000 respectively, in regional exploration funding. Newmont will provide 65% of future regional exploration funding with EMX providing 35%.
Upon spending US$200,000 on a specific exploration area, EMX has the right to establish that area (defined as not greater than 500 square kilometers) as a “Designated Project” candidate, at which time Newmont may choose to advance the project to Designated Project status or decline. If accepted, Newmont can earn an initial 70% interest in a Designated Project by completing a Feasibility Study or solely funding the first US$10 million in Designated Project expenditures on or before six years from the effective date, whichever comes first. In the event Newmont declines, EMX is free to advance that property on its own terms with no further obligation to Newmont.
La Mine Designated Project
If EMX’s existing La Mine project is classified as a Designated Project in the future, then Newmont can earn a 65% participating interest in the La Mine JV by (i) completing a Feasibility Study which reports a minimum resource containing at least 2,000,000 ounces of gold (subject to NI 43-101 classification requirements) or (ii) solely funding the first US$20M in Venture Expenditures on or before six years from the effective date, whichever comes first, in accordance with the following minimum expenditures (the “La Mine Earn-in”):
- US$1M on or before the first anniversary
- An additional US$2M on or before the second anniversary
- An additional US$3M on or before the third anniversary and each subsequent anniversary until
completion of the La Mine Earn-in.
EMX’s participation in the financing of Venture Expenditures for the La Mine JV, as well as future Designated Projects, are subject to the same terms and conditions as the La Miel JV as stated above.
The combination of Newmont’s contribution of data, exploration expertise, work commitments, cash payments and equity purchase will substantially accelerate the Company’s Haitian exploration program, while adding to EMX’s already strong treasury of cash and securities. EMX is exploring and investing in a mineral property and royalty portfolio located in some of the most prospective, but under-explored mineral belts of the world.
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For further information contact:
David M. Cole
President and Chief Executive Officer
Phone: (303) 979-6666
Email: dave@eurasianminerals.com
Website: www.eurasianminerals.com
Kim C. Casswell
Corporate Secretary
Phone: (604) 688-6390
Email: kcasswell@eurasianminerals.com
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement
Some of the statements in this news release contain forward-looking information that involves inherent risk and uncertainty affecting the business of Eurasian Minerals Inc. Actual results may differ materially from those currently anticipated in such statements.ution of earnings from the venture.