International Northair Mines Ltd. Raises US$4.0 Million on Royalty Transaction with Coeur Capital for La Cigarra Silver Proje...
May 21 2014 - 5:46PM
Marketwired
International Northair Mines Ltd. Raises US$4.0 Million on Royalty
Transaction with Coeur Capital for La Cigarra Silver Project,
Mexico
VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 21, 2014) -
International Northair Mines Ltd. (TSX-VENTURE:INM) (the "Company"
or "Northair") is pleased to announce that it has entered into a
Net Smelter Return ("NSR") royalty agreement ("Royalty Agreement")
with Coeur Capital, Inc. ("Coeur") for proceeds of US$4.0 million.
The 2.5% NSR is payable on future production from the La Cigarra
silver project (the "Project"), located in north central
Mexico.
"Northair is very pleased to raise funds allowing us to move
forward without diluting our existing shareholders during this
difficult time in the resource industry," said Fred Hewett,
President and CEO of Northair. "We appreciate the support of Coeur
and look forward to having them as a long term partner as we
continue to advance La Cigarra. The funds will be used for a drill
program to potentially increase our resource, explore other
significant undrilled targets and to conduct further economic
studies."
Transaction Summary
Under the terms of the Royalty Agreement, the Company will
receive US$4.0 million payable for a 2.5% NSR royalty on production
from the La Cigarra silver project. Northair will receive
US$2,250,000 of the funds on the effective date of the Royalty
Agreement, which will be followed by US$1,750,000 payable as a
second tranche on September 2, 2014.
Coeur's parent company, Coeur Mining, Inc., currently owns
20,350,000 common shares representing 19.4% of the Company's issued
and outstanding common shares and is an insider of the Company. As
a result, this transaction is a related party transaction and
subject to valuation and minority voting requirements of Policy 5.9
of the TSX Venture Exchange and Multilateral Instrument 61-101 -
Protection of Minority Security Holders in Special
Transactions ("MI 61-101").
As Northair is not listed or quoted on any prescribed exchange,
the transaction is exempt from the formal valuation requirement of
MI 61-101. Northair is relying on an exemption from the minority
approval requirement of MI 61-101 as described in more detail
below.
As previously disclosed, Northair needs to fund $800,000 to
exercise its option to acquire a 100% interest in the original
concessions, certain concessions surrounding the Project and to pay
for certain mineral concession and land taxes. These commitments
are in excess of the Company's cash on hand, accordingly, the
Company currently has neither sufficient funds nor reasonably
available financing options to satisfy these commitments.
A special committee (the "Special Committee") of three
independent directors of the Company was constituted to consider
the entering into of the Royalty Agreement with Coeur. The Special
Committee has determined unanimously that the Company is in serious
financial difficulty due to its near term financial commitments,
the Royalty Agreement with Coeur is designed to improve the
financial position of the Company, and the terms of the Royalty
Agreement are reasonable in the Company's current circumstances.
Accordingly, the Special Committee recommended to the Board that
the Royalty Agreement be approved and the Board accepted that
recommendation.
Use of Proceeds
Proceeds from the Royalty Agreement will allow Northair to earn
a 100% interest in certain key mineral rights comprising the La
Cigarra silver project, as well as carry out continued exploration
that will include 4,000 metres of core drilling at San Gregorio and
Las Carolinas. These two adjacent mineral zones currently host a
Measured and Indicated silver resource of 50.5 million ounces
grading 76 g/t. (see INM PR#13-05 dated February 26, 2013) defined
over a strike length of 2.1 kilometres. The program will also
include 1,700 metres of drilling to test multiple mineral showings
and historic mine workings found at the Las Venadas and Las Chinas
targets. These untested mineral showings lie to the south and
extend the La Cigarra mineral trend an additional two
kilometers.
Raymond James Ltd. assisted Northair in arranging this
transaction with Coeur.
The transaction is subject to the approval of the TSX Venture
Exchange.
About International Northair Mines Ltd.
International Northair Mines Ltd is a mineral exploration
company engaged in the acquisition and development of gold and
silver properties in Mexico. Northair is focused on advancing its
La Cigarra silver project located in the state of Chihuahua, which
currently hosts a NI 43-101 Resource estimate of 50.4 million
ounces of silver in the Measured & Indicated categories grading
76 g/t silver and 3.5 million ounces of silver in the Inferred
category grading 61 g/t silver constrained by a Whittle pit shell
at an economic cutoff grade of 30 g/t silver (assuming
metallurgical recoveries of 84% silver). The La Cigarra silver
deposit also contains appreciable amounts of lead, zinc and gold as
referenced in the San Gregorio/Las Carolinas Resources Technical
Report La Cigarra Project, Chihuahua Mexico dated effective
February 26, 2013.
ON BEHALF OF THE BOARD,
INTERNATIONAL NORTHAIR MINES LTD.
Fred G. Hewett, P.Eng., President & CEO
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 news release.
This news release may contain forward looking statements
which are not historical facts, such as resource estimates,
anticipated results and costs, and discussions of goals and
exploration results, and involves a number of risks and
uncertainties that could cause actual results to differ materially
from those projected. These risks and uncertainties include, but
are not limited to, metal price volatility, volatility of metals
production, project development, resources estimates, future
anticipated resources and cost engineering estimate risks,
geological factors and exploration results. See Northair's filings
for a more detailed discussion of factors that may impact expected
results.
International Northair Mines Ltd.Fred HewettPresident &
CEO604-687-7545 or 1-888-338-2200International Northair Mines
Ltd.Chris CurranManager, Corporate Communications604-687-7545 or
1-888-338-2200info@northair.comwww.internationalnorthair.com
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