VANCOUVER, April 18, 2012 /CNW/ - Northcliff Resources Ltd. ("Northcliff") (TSX: NCF) announces that it has signed a letter agreement with Geodex Minerals Ltd. ("Geodex") (TSX.V: GXM) to acquire Geodex's 30% interest in the Sisson Tungsten-Molybdenum Project in New Brunswick in consideration for cash, a return of Geodex shares Northcliff owns for cancellation and the issuance of common shares of Northcliff (the "Acquisition").
In October 2010, Northcliff acquired a 70% interest in the Sisson Project from Geodex, subject to investing up to $17 million in exploration, feasibility and project costs. Northcliff expects to complete its $17 million investment in early May 2012.
Northcliff will issue 16,003,700 common shares to Geodex and pay $1 million in cash to acquire Geodex's 30% interest in the Sisson Project. As part of the Acquisition, Northcliff will also return to Geodex for cancellation the 3,333,333 common shares of Geodex that Northcliff purchased for $0.30 per share. The Acquisition is expected to be completed by Geodex using a plan of arrangement which will include the authorization for the Geodex Board to establish the terms of any future distribution of the Northcliff common shares to Geodex shareholders. If Northcliff shares are retained by Geodex, they will be escrowed with a mutually agreed third party until the commencement of mine construction but in any event, no longer than three years from the closing date.
"We believe that consolidating ownership under Northcliff will be a positive development for the efficient advancement of the Sisson Project in a manner that benefits both sets of shareholders and we believe that this transaction will provide Geodex investors, along with Northcliff investors, with the opportunity to participate in the development of the Sisson Project," said Northcliff President & CEO Chris Zahovskis. "With an estimated working capital of $14 million after completion of the Acquisition, Northcliff maintains a strong financial position to meet the ongoing project development needs in the near term. Northcliff's corporate and project teams remain wholly focused on advancing the Sisson Project toward the completion of a Feasibility Study and initiating permitting later this year, including obtaining the project financing necessary to complete detailed engineering and pending permit approval, to initiate the construction phase in 2013."
Geodex President & CEO Mark Fields stated that "Geodex spent considerable time considering the alternatives to maximize the benefit to Geodex shareholders of its 30% Sisson interest. The Acquisition was unanimously approved by Geodex's Board of Directors as it will provide several advantages to Geodex shareholders. A key one was the continued participation in the future growth of the Sisson Project through the Northcliff share ownership while maintaining their current Geodex share position. The Acquisition also eliminates the dilution and financing risk if Geodex were to meet its ongoing 30% Sisson financial commitment under the existing joint venture. In addition, the immediate cash injection will allow Geodex to focus on its New Brunswick exploration assets and particularly the Dungarvon tungsten-molybdenum-tin project which provides promising discovery potential through a drill program this summer."
The Acquisition is subject to customary terms and conditions including approvals of the shareholders of Geodex and Northcliff, the TSX, the TSX Venture Exchange and the Supreme Court of British Columbia. Completion of the Acquisition is targeted for the end of the second quarter of 2012.
Fields concluded by noting "We have been very pleased with the work Northcliff has performed to date, as manager under the joint venture, and their proven ability to advance the Sisson Project. This will be crucial to the continued success and value addition we expect to occur."
Northcliff is a mineral resource company associated with Hunter Dickinson Inc. (HDI), and focused on progressing the feasibility-stage Sisson Tungsten-Molybdenum Project located in New Brunswick, Canada, to production.
Geodex is a mineral resource company focused on New Brunswick, Canada with its primary asset being its 30% Sisson ownership interest. Geodex is also actively developing its exploration portfolio focused on the discovery of critical metals in New Brunswick.
| Christopher Zahovskis
President & CEO, Northcliff
| Mark Fields
President & CEO, Geodex
No regulatory authority accepts responsibility for the adequacy or accuracy of this release.
This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address completion of the Acquisition, permitting, exploration drilling, exploitation activities and events or developments that the company expects, are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include uncertainty of shareholder support, the need for judicial and regulatory approvals, market prices, exploitation and exploration successes, continuity of mineralization, potential environmental issues and liabilities associated with exploration, development and mining activities, uncertainties related to the ability to obtain necessary permits, licenses and title and delays due to third party opposition, changes in government policies regarding mining and natural resource exploration and exploitation, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, investors should review the Company's continuous disclosure filings that are available at www.sedar.com.
For further information:
For further details on Northcliff and the Sisson Project, please visit www.northcliffresources.com or contact Investor Services at (604) 684-6365 or within North America at 1-800-667-2114. For further details on Geodex, please visit www.geodexminerals.com or contact Investor Relations at (604) 689-7771 or within North America at 1-888-999-3500.