Xmet (CVE:XME) said Monday it has moved to acquire the remaining 25 percent stake of Duparquet Assets Ltd, under a new $9.0 million option agreement with Globex Mining Enterprises (TSE:GMX).
Duparquet Assets, a 50-50 joint venture (JV) between Globex and
Geoconseils, owns the Duquesne West and Ottoman Fault properties in the
Abitibi region of Quebec.
The original option agreement saw Xmet acquire just 75 percent of the assets. However, under the terms of the new option agreement, Xmet can acquire 100 percent of the Duparquet company, in exchange for one of two cash payment scenarios.
CEO, Alexander Stewart, said: "After nearly two years of efficient and
successful Gold discovery on the Duquesne-Ottoman Project, management
saw the need to accelerate our option payments and acquire the right to
the final 25% interest in order to create a clear path to 100% ownership
of Duquesne-Ottoman as soon as possible.
technical achievements on the Project have not translated into
increased stock value. This New Option Agreement is designed to remedy
this situation and align Xmet's valuation with our peer group who 'own' their gold.
"We are confident that this new option agreement will create an
immediate path to ownership that should give us improved multiples on
our per ounce resource that translates into increased shareholder
can pay either a single cash payment of $9.0 million within six months
of signing the new agreement, subject to a sliding scale gross metal
royalty (GMR) of up to three percent; or a single cash payment of $6.5
million within six months of signing the new agreement, plus one of four
Those options will see Xmet
pay either $2.5 million in cash within one year of the agreement, $2.6
million in cash within two years of the agreement, $2.7 million in cash
within three years of the agreement, or $2.8 million in cash within four
years of the agreement.
choose not to make one of these four payment options, Globex and
Geoconseils will retain a 25 percent carried interest in the company,
plus the three percent GMR. If this option is carried out, Globex and
Geoconseils will commence pro rata contributions toward production,
following the delivery of a bankable feasibility study by Xmet.
The new agreement eliminates Xmet's
obligation to carry out another $6 million in work obligations over the
next four years, as well as its annual five percent of carrying costs.
In October 2011, Xmet
reported an NI 43-101 compliant inferred resource of 4.17 million
tonnes at an average grade of 5.2 g/t gold at the property, hosting
727,000 ounces of gold. The report was prepared by Watts, Griffis,
said it has completed 9,000 metres of its fully funded 13,000-metre
phase two diamond drilling program on Duquesne-Ottoman, which aims to
expand the resource beyond the current compliant amount.