back Puget Ventures Inc. Announces Agreement on Altai Projects
May 28, 2013 | Category: Press ReleasesVANCOUVER, BC (May 28th, 2013) ... PUGET VENTURES INC. ("Puget") (TSXV:PVS) (the "Company") is pleased to announce it has executed an Earn-in Agreement with Imperial Mining Holding Ltd. ("IMHL") for up to a 100% interest in mineral resource assets collectively known as the Altai Properties (the "Properties"). The Company will also change its name to Global Cobalt Corporation ("Global Cobalt") to reflect its evolution to an international cobalt exploration and development company.
- Global Cobalt, will acquire, on an accretive earn-in basis, 100% of all of the rights, titles and interest to five mineral resource projects: Kuruozek, Yantau, Toshtuozek and Olendzhular, collectively known as the "Altai Sister Projects" and the flagship Karakul Cobalt Project (the "Properties").
- Ownership thresholds based on aggregate work program and mineral resource tonnage.
- Revised agreement reduces dilution and eliminates need for share consolidation required in the original arrangement.
The new acquisition terms ensure a solid foundation for Global Cobalt to build accretive value in the short term, while minimizing share dilution and eliminating the share consolidation required in the original arrangement.
"The revised agreement offers the upside of 100% ownership while minimizing risk through an earn-in structure," said Erin Chutter, President & CEO. "This new structure allows us to exercise greater corporate control in expanding our project portfolio."Earn-in Option Agreement
In consideration for the option in the Properties, Global Cobalt will issue to IMHL 8,630,000 common shares ("Consideration Shares") of Global Cobalt. The Consideration Shares are to be issued to IMHL subject to the requirements of the TSX Venture Exchange. Global Cobalt will then incur cumulative exploration and development expenditures on the Properties (up to $15 million) to earn-in increasing interest levels in the Properties as follows:
I. Upon completion of exploration and development expenditures of US$7 million on the Properties by October 30, 2014, Global Cobalt will earn a 51% interest in the Properties.
II. Upon completion of a further US$8 million of expenditures on the Properties by December 31, 2015, Global Cobalt will earn an additional 23.9% interest in the Properties, for an aggregate total 74.9% interest in the Properties.Following the completion of the exploration and development work described above, Global Cobalt may then elect to increase its interest from 74.9% to a 100% interest in the Properties, at its sole discretion, by exercising one of the following Option Triggers:
I. Option Trigger #1: Upon completion of a NI 43-101 compliant technical report outlining a 30 MT resource in the measured and indicated category or better with respect to any one property comprising the Properties as selected by Global Cobalt, IMHL will then grant Global Cobalt with the remaining 25.1% interest in the Properties (for an aggregate 100% interest) in consideration of an "Option 1 Trigger Amount" to be negotiated and paid by Global Cobalt.
II. Option Trigger #2: Upon completion of a bankable feasibility study of the Global Cobalt showing in excess of a 30 MT resource based on the valuation of any one property comprising the Properties as selected by the Global Cobalt, IMHL will grant Global Cobalt with the remaining 25.1% interest in the Properties (for an aggregate 100% interest) in consideration of an "Option 2 Trigger Amount" to be negotiated and paid by Global Cobalt.
IMHL may grant Global Cobalt the right to acquire the final 25.1% interest in the Properties in advance by payment to IMHL of a portion of the "Option 1 Trigger Amount" or "Option 2 Trigger Amount" to be negotiated by the parties. IMHL will retain a 1.5% NSR on all projects."The agreement with IMHL to earn-in to the Altai Projects is consistent with and represents the continued advancement of Global Cobalt's business strategy to acquire and develop world-class assets and further positions Global Cobalt as an emerging leader in the strategic metals sector," added Erin Chutter, CEO.
Karakul and the "Sister Properties"
As with the previous arrangement, the Karakul Cobalt Deposit, located in the Republic of Altai, in the Russian Federation represents the flagship asset. Significant exploration and pre-development work has been conducted and demonstrates an extensive mineralized zone with numerous identified occurrences of potentially valuable minerals. The current size and scale of the deposit, as well as its potential, which is open at depth and along strike, make it one of the largest known potential sources of primary cobalt outside of Africa.
In July 2010, SRK Consulting (Canada) Inc. ("SRK") visited the Karakul property, reviewed available geological and exploration data to assess its merit, and prepared an independent technical report in compliance with Canadian Securities Administrators' National Instrument 43-101 and Form 43-101F. After careful review of available data, SRK is of the opinion that, "the Karakul Exploration Project has merit as an 'Advanced Exploration Property' because available exploration data are sufficiently reliable to clearly demonstrate that the Karakul mineral asset hosts polymetallic sulphide mineralization of potentially economic interest."
Global Cobalt's near-term focus will be to review, compile and interpret existing Russian data, and plan a significant surface and underground core-drilling program to verify historical results and delineate the extent of mineralization in order to prepare an initial Mineral Resource Statement and early production.
The proximity of the Sister Properties to the Karakul Cobalt Deposit adds the possibility of an extension to the main ore bodies providing significant upside to the creation of a new mining jurisdiction in the Altai Region of Russia. The Company will actively pursue early and advanced-stage opportunities in the region and will develop properties with good economics.
"The Sister Properties provide Global Cobalt with additional high quality assets with unrealized upside and repeatable drilling potential in an area adjacent to our significant Karakul Cobalt deposit, offering additional opportunities to add resources and value," said Dr. Michael Hitch, PhD, P.Geo., P.Eng., Technical Advisor to Global Cobalt. "An immediate work program, with control of operations, will be key to a successful undertaking and this agreement gives Global Cobalt this advantage."
The transactions contemplated under the Earn-In Agreement are subject to, among other things, the Company receiving all necessary approvals from the TSX Venture Exchange.
In light of the new agreement, the Company has chosen to terminate its previously announced reverse takeover agreement with IMHL dated December 6th, 2010 will withdrawn its final short from prospectus filed on February 19, 2013 with the BCSC.
The Company would also like to announce that it will host a shareholder update conference call for all interested parties on Thursday, May 30th 2013, at 10:00am PDT to discuss recent business developments and provide a Company update.
The call will begin with a corporate presentation followed by a Q&A session. Participants may use the following phone numbers to take part in the call. Toll-free within North America: 1-866-321-8231. Toronto and international participants can dial: 1-416-642-5213.A visual presentation during the call can be viewed using the following website www.thinkpragmatic.com/webpro where registrants can sign in as a guest using the following access code: 8124285.
About Puget Ventures Inc. / Global Cobalt Corporation
Puget Ventures will be renamed Global Cobalt Corporation and will be a Canada-based strategic metals company focused on the development of a new mining region in the Russian Republic of Altai. Global Cobalt plans to build upon the success of the Altai Projects while aggressively expanding and exploring existing properties to supply the demand for cobalt and other strategic metals. The Company will continue to advance its 100% owned Werner Lake cobalt properties in Ontario, Canada.
For Further Information
Mr. Mitchell Smith, Corporate Development
Suite 1510-1050 West Pender Street
Vancouver, BC V6E 3T4
Tel: +1 (604) 688-4219
Fax: +1 (604) 688-4215
Cautionary Statement on Forward-Looking Information: The statements made in this News Release may contain certain forward-looking statements. Actual events or results may differ from the Company's expectations. Certain risk factors may also affect the actual results achieved by the Company.
This news release shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The shares offered will not be and have not been registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.