TORONTO, Sept. 5, 2012 /CNW/ - Laurion Mineral Exploration Inc. (TSX-V: LME) and (OTCQX: LMEFF) ("Laurion" or the "Corporation") is pleased to announce that it has signed a binding letter agreement with Lincoln Mining Corporation ("Lincoln") providing for the purchase by Lincoln (or a subsidiary) from Laurion of certain unpatented mining claims and the assignment and assumption of Laurion's option to earn a 100% interest in the Bell Mountain property located in Churchill County, Nevada. The purchase price is, in addition to Lincoln assuming all of the obligations in respect of the Bell Mountain property and the option agreement, an aggregate of $2,350,000 in cash, payable by Lincoln to Laurion as follows:
- $350,000 within five business days following receipt by Lincoln and Laurion of all necessary TSX Venture Exchange ("TSXV") approvals to the letter agreement;
- $350,000 on completion of a convertible loan financing by Lincoln in the amount of $2,300,000, at which time Laurion and Lincoln will complete the sale and transfer of Laurion's mining claims and option on the Bell Mountain property to Lincoln (or a subsidiary of Lincoln), and Lincoln shall assume the remaining obligations of Laurion in respect of the option, which shall be completed in any event by no later than November 16, 2012;
- $750,000 on completion of a pre-feasibility study for the Bell Mountain property. Lincoln shall use its commercially reasonable efforts to complete the pre-feasibility study by June 30, 2013; and
- $900,000 on or before five months after completion of the pre-feasibility study.
The transaction under the letter agreement remains subject to various conditions, including receipt of necessary approvals from the TSXV, approval of Lincoln's shareholders of the convertible loan financing, Lincoln's acceptance of the physical condition and status of title of the property, and receipt of all necessary third party consents. Laurion shall retain the right to reassert its interests and rights in the Bell Mountain option in order to be able to exercise the option to earn a 100% interest in the project in the case that Lincoln does not complete the remaining expenditure requirements of $1,755,000 or Lincoln defaults on any of the other obligations assumed under the option.
Pursuant to the letter agreement, the parties must use their best efforts to negotiate and execute a definitive agreement incorporating the terms of the letter agreement within 30 days.
Present market conditions and the drive to preserve cash have impacted the Corporation's capacity to develop the Bell Mountain project under an appropriate time line. The unstable global credit markets and diminished project finance options have made it extremely challenging and dilutive to raise funding for the Corporation's on-going exploration and development activities. As a result, the Corporation was faced with the decision to preserve shareholder value through selective asset conservation.
The Corporations' Sturgeon River property in Beardmore (Greenstone), Ontario is an exciting project that continues to surprise and generate good news and value for our shareholders. We are optimistic that our field work and planned drilling programs on the Sturgeon River property will uncover additional discoveries with growth potential in the area of our VMS target.
Laurion acquired the option to earn a 100% interest in the Bell Mountain property from Globex Mining Enterprises Inc. ("Globex") on June 28, 2010. Since entering the option agreement to acquire the Bell Mountain property with Globex, Laurion has completed a NI 43-101 Technical Report, a 56 hole drill program, metallurgical testwork, baseline studies for the Environmental Assessment ("EA") permit and the initial pit cone analysis, incurring a total of $1,245,000 in exploration expenditures to date. A total of $3.0 million in exploration expenditure commitments is required to be completed on the Bell Mountain property under the Laurion/Globex agreement by June 2015, thus requiring a further $1.755 million of exploration expenditures to be incurred.
Cynthia Le Sueur-Aquin, President of Laurion stated, "Laurion is very pleased to have realised a profit of $1.1 million from disposition of the Bell Mountain over the two year period since entering into the option agreement with Globex Mining Enterprises Inc. Laurion's vision is to create shareholder wealth and value through the monetisation of our assets, and although the disposition of the Bell Mountain property was not originally contemplated, tough economic realities and a fortuitous opportunity presented itself for both Laurion and Lincoln Gold."
About Laurion Mineral Exploration Inc.
The Corporation's focus is to make the transition from explorer to producer and envisages the realization of shareholder value and wealth through monetization of its discoveries and assets. Laurion's exploration horizons are focused primarily on gold with a secondary interest in base metals, with key interests in prospective mining properties located in Ontario, Canada and Nevada, USA.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.
This news release includes certain forward-looking statements concerning the future performance of Laurion's business, operations and condition, as well as management's objectives, strategies, beliefs and intentions. Forward-looking statements are frequently identified by such words as "may", "will", "plan", "expect", "anticipate", "estimate", "intend" and similar words referring to future events and results. Forward-looking statements are based on the current opinions and expectations of management. All forward-looking information is inherently uncertain and subject to a variety of assumptions, risks and uncertainties, including the speculative nature of mineral exploration and development, fluctuating commodity prices, competitive risks and the availability of financing. Actual events or results may differ materially from those projected in the forward-looking statements and Laurion cautions against placing undue reliance thereon. Laurion and its management assume no obligation to revise or update these forward looking statements except as required by law.
SOURCE: Laurion Mineral Exploration Inc.
For further information:
Laurion Mineral Exploration Inc.
Cynthia Le Sueur-Aquin - President