Post by Designer on Jul 12, 2005 15:05:50 GMT -5
Letter of Intent Signed for Caribou Deal
via COMTEX
July 12, 2005
SHARES OUTSTANDING: 61 MILLION SYMBOL & EXCHANGE: FGT-V
MONTREAL, Jul 12, 2005 (Canada NewsWire via COMTEX) --
Forest Gate Resources Inc. reports that a revised letter of intent ("LOI") between its wholly-owned subsidiary, Blue Note Metals, and Breakwater Resources and its wholly-owned subsidiary, CanZinco Ltd., regarding the acquisition of the Caribou and Restigouche mines has been signed by both parties. The LOI sets out the provisions that will form the basis of a definitive agreement to be entered into between the two companies in the near future; the LOI replaces all other previously announced agreements and understandings between the parties.
Under the terms of the LOI, after raising sufficient funds, Blue Note will acquire the Caribou and Restigouche mines by (i) replacing the reclamation deposits with the New Brunswick government for environmental rehabilitation of approximately $7 million, and (ii) issuing to CanZinco a C$15 million convertible debenture with a maturity of five years.
The debenture is repayable in shares at CanZinco's option or in cash or shares at maturity at Blue Note's option. Additionally, CanZinco has the right to convert the debenture in return for a direct 20% ownership of the mines; this must be exercised within one year from the commencement of commercial production. Blue Note has also agreed to spend $1.5 million on exploration on the properties before the 12-month anniversary of the commencement of commercial production.
CanZinco will also receive a royalty on zinc metal production in the event the price of zinc reaches US$0.65 per pound or more as determined by the London Metals Exchange. In addition, Breakwater is granted a conditional first right of refusal on Blue Note's marketing rights of its metals concentrates produced from the properties.
The Caribou Mine site is located 50 kilometres west of Bathurst, New Brunswick and includes an underground mine currently being kept under care and maintenance, a 3000-tonne per day concentrator (mill) and a permitted tailings facility. The Restigouche Mine site, located 30 kilometres further west, includes an open pit mine and associated infrastructure and is also currently under care and maintenance.
Extensive due diligence was done by a team of consultants lead by Ross Finlay 2000 Inc of Val D'Or, Quebec, using the Breakwater 2000 Reopening Plan as a basis. Ross Finlay reviewed the geology, ore reserves; ore reserve expansion potential, mine infrastructure, mine development and production plans and schedules, and mine reopening rehab requirements.
"The next step is to raise the funds to put the mines and mill back into production," said Blue Note Chairman, Michael Judson. "We expect that metals prices will strengthen in the last quarter and that is when we expect to execute a senior financing."
The transactions are subject to approval by securities, regulatory and governmental authorities and contingent on closing the senior financing for the project.
As previously announced, the company has asked its underwriters to raise its seed financing no later than October. The listing of Blue Note shares on the TSX Venture Exchange is anticipated to occur at the same time.
Forest Gate is a publicly traded mineral exploration company with diamond properties in Saskatchewan and precious and base metal properties in New Brunswick. The company's shares and warrants trade under the symbol FGT on the TSX Venture Exchange.
Forward-Looking Statements
This news release contains discussion of items that may constitute forward-looking statements within the meaning of securities laws that involve risks and uncertainties. Although the company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurances that its expectations will be achieved. Factors that could cause actual results to differ materially from expectations include the effects of general economic conditions, actions by government authorities, uncertainties associated with contract negotiations, additional financing requirements, market acceptance of the Company's products and competitive pressures. These factors and others are more fully discussed in Company filings with Canadian securities regulatory authorities.
The TSX Venture Exchange has not reviewed nor does it accept
responsibility for the adequacy or accuracy of this news release.
Lorne Woods, Vice President, Corporate Development, Blue Note Metals Inc., 800-937-3095, lwoods@bluenotemetals.ca
Copyright (C) 2005 CNW. All rights reserved.
via COMTEX
July 12, 2005
SHARES OUTSTANDING: 61 MILLION SYMBOL & EXCHANGE: FGT-V
MONTREAL, Jul 12, 2005 (Canada NewsWire via COMTEX) --
Forest Gate Resources Inc. reports that a revised letter of intent ("LOI") between its wholly-owned subsidiary, Blue Note Metals, and Breakwater Resources and its wholly-owned subsidiary, CanZinco Ltd., regarding the acquisition of the Caribou and Restigouche mines has been signed by both parties. The LOI sets out the provisions that will form the basis of a definitive agreement to be entered into between the two companies in the near future; the LOI replaces all other previously announced agreements and understandings between the parties.
Under the terms of the LOI, after raising sufficient funds, Blue Note will acquire the Caribou and Restigouche mines by (i) replacing the reclamation deposits with the New Brunswick government for environmental rehabilitation of approximately $7 million, and (ii) issuing to CanZinco a C$15 million convertible debenture with a maturity of five years.
The debenture is repayable in shares at CanZinco's option or in cash or shares at maturity at Blue Note's option. Additionally, CanZinco has the right to convert the debenture in return for a direct 20% ownership of the mines; this must be exercised within one year from the commencement of commercial production. Blue Note has also agreed to spend $1.5 million on exploration on the properties before the 12-month anniversary of the commencement of commercial production.
CanZinco will also receive a royalty on zinc metal production in the event the price of zinc reaches US$0.65 per pound or more as determined by the London Metals Exchange. In addition, Breakwater is granted a conditional first right of refusal on Blue Note's marketing rights of its metals concentrates produced from the properties.
The Caribou Mine site is located 50 kilometres west of Bathurst, New Brunswick and includes an underground mine currently being kept under care and maintenance, a 3000-tonne per day concentrator (mill) and a permitted tailings facility. The Restigouche Mine site, located 30 kilometres further west, includes an open pit mine and associated infrastructure and is also currently under care and maintenance.
Extensive due diligence was done by a team of consultants lead by Ross Finlay 2000 Inc of Val D'Or, Quebec, using the Breakwater 2000 Reopening Plan as a basis. Ross Finlay reviewed the geology, ore reserves; ore reserve expansion potential, mine infrastructure, mine development and production plans and schedules, and mine reopening rehab requirements.
"The next step is to raise the funds to put the mines and mill back into production," said Blue Note Chairman, Michael Judson. "We expect that metals prices will strengthen in the last quarter and that is when we expect to execute a senior financing."
The transactions are subject to approval by securities, regulatory and governmental authorities and contingent on closing the senior financing for the project.
As previously announced, the company has asked its underwriters to raise its seed financing no later than October. The listing of Blue Note shares on the TSX Venture Exchange is anticipated to occur at the same time.
Forest Gate is a publicly traded mineral exploration company with diamond properties in Saskatchewan and precious and base metal properties in New Brunswick. The company's shares and warrants trade under the symbol FGT on the TSX Venture Exchange.
Forward-Looking Statements
This news release contains discussion of items that may constitute forward-looking statements within the meaning of securities laws that involve risks and uncertainties. Although the company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurances that its expectations will be achieved. Factors that could cause actual results to differ materially from expectations include the effects of general economic conditions, actions by government authorities, uncertainties associated with contract negotiations, additional financing requirements, market acceptance of the Company's products and competitive pressures. These factors and others are more fully discussed in Company filings with Canadian securities regulatory authorities.
The TSX Venture Exchange has not reviewed nor does it accept
responsibility for the adequacy or accuracy of this news release.
Lorne Woods, Vice President, Corporate Development, Blue Note Metals Inc., 800-937-3095, lwoods@bluenotemetals.ca
Copyright (C) 2005 CNW. All rights reserved.