Colibri signs earn-in agreement with Agnico-Eagle
2011-03-02 19:24 ET - News Release
Mr. Lance Geselbracht reports
COLIBRI ANNOUNCES SIGNING OF FINAL EARN-IN AND SHAREHOLDERS AGREEMENT WITH AGNICO-EAGLE MINES LTD.
ColibriResource Corp. has signed an earn-in and shareholders agreement datedFeb. 28, 2011, with Agnico-Eagle Mines Ltd. (AEM), which agreementreflects the terms of the letter of intent entered into between Colibriand AEM in December, 2010.
Pursuant to the agreement, AEM may acquire up to a 75-per-cent interestin the company's Colibri gold project in Sonora, Mexico, and form ajoint venture with the company by making qualified explorationexpenditures and payments to Colibri. To earn a 75-per-cent interest inthe Colibri project, AEM is required to spend, over the next threeyears, a minimum of $3.0-million (U.S.) in exploration expenditures, aswell as complete a positive feasibility study within five years. Inaddition, AEM will be required to make option payments totalling$1,452,000 over a seven-year period. After completion of the feasibilitystudy and earning a 75-per-cent in the Colibri project, AEM and Colibrimay form a joint venture to develop the Colibri project.
The agreement is conditional upon the approval of the board of directorsof each of AEM and Colibri, approval of the TSX Venture Exchange, andincorporation of a Mexican wholly owned subsidiary of a BritishColumbia company to hold the right, title and interest in the Colibriproject. Under the terms of the agreement, Colibri will transfer theconcessions comprising the Colibri project to the operating company, theoperations, including exploration, development and mining, of whichwill be managed by a general manager.
Pursuant to the agreement, Colibri will own 100 per cent of the jointventure company until AEM successfully exercises its first option toacquire a 51-per-cent interest by incurring expenditures of not lessthan $1.5-million (U.S.) and making cash payments to Colibri in theamount of $218,000 (U.S.), all within 18 months of the effective date ofthe agreement. Thereafter, AEM may exercise a second option to acquirean additional 24-per-cent interest in the joint venture company byincurring expenditures of not less than $1.5-million (U.S.) and makingfurther payments to Colibri in the total amount of $311,000 (U.S.), allwithin 36 months of the effective date of the agreement. Upon exerciseof both options, AEM will hold a 75-per-cent interest in the jointventure company subject to a reversion provision whereby AEM's ownershipinterest would revert to 51 per cent if it does not complete a positivefeasibility study within five years of the effective date and pay atotal of $923,000 (U.S.) to Colibri over a period of three yearscommencing 48 months after the effective date of the agreement. AEM maysatisfy its cash payment obligation under the agreement by issuingshares of AEM to Colibri in lieu thereof.
The agreement also provides for the purchase by AEM of a total of 3.0million units of Colibri at a price of 20 cents per unit within sevendays of the effective date of the agreement. Each unit will consist ofone common share of the company and one share purchase warrantexercisable for one additional Colibri common share at a price of 35cents per share for a period of 24 months from the effective date of theagreement. The agreement also grants a right of first refusal to AEM topurchase a percentage equal to AEM's then holdings in Colibri or 9.9per cent of any future share or share right issuances by the company.
The Colibri project, centred within the Sonora gold belt near the cityof Caborca, hosts dozens of historical artisanal mine workings thatmostly occur on two northwest-trending thrust fault-detachment faultsystems that transect the claim package. Similar major structures alongstrike from the Colibri project host La Herradura, the largest gold minein Mexico, operated jointly by Newmont and Fresnillo PLC (formerlyPenoles), the El Chanate mine, operated by Capital Gold, the SanFrancisco mine, operated by Timmins Gold Corp., and other advancedprojects, such as Noche Buena (located 20 kilometres northwest ofColibri and currently being developed by Fresnillo).
"We are excited the agreement with Agnico-Eagle Mines has been completedand are anxious for exploration work to begin at the Colibri site,"said Lance Geselbracht, president of Colibri. "We are now able to focusour exploration efforts at our Ramard silver site in Sonora (see Feb.17, 2011, news release in Stockwatch). Prior drilling at Ramard hasyielded excellent results and we believe Ramard has the potential tohost a bulk-tonnage silver mine."
We seek Safe Harbor.
