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Wednesday, 12 September 2012
Clifton Star amends option agreement for Duparquet project
Clifton Star Resources (CVE:CFO) said today that following negotiations with the owners of the Duparquet project properties in Quebec, it has reached a new deal regarding the options to purchase the remaining shares in the companies that own the assets.
Under the previous deal, Clifton had total option payments of $52 million, with one $22 million payment due in 2012 and the remainder due in 2017, in order to acquire a 100 per cent interest in the Beattie, Donchester and Dumico properties that comprise the Duparquet project, in which Clifton already holds a 10 per cent stake.
"This new deal lifts the uncertainty regarding Clifton's ability to meet the upcoming December payment," said president and CEO, Michel Bouchard.
"The amended deal will enable Clifton to continue to invest in the exploration and development of the Duparquet project. The option payment schedule is now attuned to the project's planned development schedule.
"With working capital of $11 million, Clifton has the means to take the project to the next level with the start of the recently announced PEA Study, scheduled for completion at the end of 2012."
Indeed, now, if Clifton pays a total of $52 to $52.2 million over a period of five years in a series of staged payments, it will own a 100 per cent interest in the properties.
The December 2012 payment is now just $2 million and 250,000 shares, compared to $22 million previously.
Other provisions were also successfully negotiated, Clifton said, including force majeure, arbitration and change of control or merger situations.
The amended agreement is in the process of being formally ratified by the companies' shareholders.
The miner recently released additional 2012 drilling results at Duparquet, and currently has two drills working on the property.
The positive results showed the zones have good grades and continuity, the Quebec-based miner said, adding that it continues to delineate and expand the resources at the project “at a steady pace”.
Clifton said the latest highlights from the North Zone included 29.6 metres grading 2.52 grams per tonne (g/t) gold in hole BD12-15, and 21.0 metres grading 2.55 g/t gold in hole BD12-11.
The resource estimate released in May did not include 2012 drill holes or 2012 trenching work results. The report noted 1,284 ounces of gold in the measured category, 1.71 million ounces of gold in the indicated category and 1.67 million ounces of gold in the inferred category.
The latest drill results will be included in the resource upgrade that InnovExplo is preparing, which will be used in the upcoming preliminary economic report, Clifton said.
In other news Wednesday, the company has also reached a deal to buy back a portion of the Duquesne property royalty.
Clifton owns a 100 per cent interest in the property, subject to a 3 per cent net smelter royalty, and will now buy back a 0.5 per cent interest in the royalty for $1 million.
The junior mining exploration company is focused on six properties that have had historic production of gold, silver, copper and nickel. The portfolio consists of seven properties, six of them near the Porcupine-Destor Fault in Quebec and one on the Manitoba-Ontario border.