SUDBURY, ON, April 1 /CNW/ - Northern Superior Resources Inc. ("Northern Superior" or the "Company") has signed a letter of intent dated March 30th, 2010 (the "LOI") to acquire Lake Shore Gold Corp.'s ("Lake Shore Gold") 50% interest in the Ti-pa-haa-kaa-ning ("TPK") gold property, located in northwestern Ontario. This will give the Company a 100% interest in the TPK gold property.
The TPK property is a large land position in Northwestern Ontario covering 42,719 hectares, which Northern Superior has been operating as a 50/50 joint venture with Lake Shore Gold. In 2007, Northern Superior announced the discovery of a highly prospective gold grain-in-till dispersal apron, averaging 10.02 gold grains per kilogram of overburden, with an estimated fertile strike length of at least six km (see press releases February 26, 2009, January 21, 2008). The Company's 2008 fall drill program identified multiple sheared intervals hosting anomalous gold values within the large dispersal apron that appear to be closely related splay structures associated with the regional continuous Stull-Wunnumin fault (see press release September 15, 2009). The large dispersal apron and multiple, widely space, anomalous gold values in bedrock are interpreted to indicate the possibility of large scale gold mineralization.
Presently, Northern Superior is completing a reverse circulation drill program over the head of TPK's large and geologically unique gold grain-in-till dispersal apron and associated gold-bearing structures (see press release March 8th, 2010). The intent of this program is to more clearly define targets for a diamond drill program, which is already financed and scheduled to begin during the second quarter of 2010.
Dr. T.F. Morris, president and CEO commented: "The consolidation of ownership of the TPK property through the acquisition of Lake Shore Gold's 50% interest provides tremendous opportunity for both companies. From Northern Superior's perspective, the transaction will allow the Company to gain complete control of TPK, providing many opportunities to aggressively advance exploration on this large, exciting, and promising gold property in the Ring of Fire region. In addition, this agreement will also provide Northern Superior with the opportunity of financing going forward as the Company's exploration program builds on further success. For Lake Shore Gold, its shareholders will now have a significant interest in all of Northern Superior's exceptional exploration opportunities."
Under the terms of the LOI, Lake Shore Gold has agreed to sell its 50% interest in the TPK joint venture in exchange for 25,000,000 common shares of Northern Superior (representing approximately a 19.97% ownership interest). In addition, Northern Superior has agreed to grant Lake Shore Gold warrants to purchase 12,500,000 common share at a price of $0.30 per share for 5 years, with the provision that if Northern Superior's share price maintains a value of over $0.35 during any 20 consecutive trading day period, Northern Superior would have the right to require Lake Shore Gold to exercise any unexercised warrants within 30 days or forfeit them. In addition, Northern Superior has agreed to grant Lake Shore Gold an assignable (subject to a right of first refusal in favor of Northern Superior) 2% Net Smelter Royalty ("NSR") on all minerals produced from TPK, with Northern Superior having the right to purchase back one quarter of the NSR (0.5%) for $1,000,000.
The LOI also provides that: (i) Northern Superior will be responsible for all expenditures on TPK from January 1st, 2010 onward; (ii) for a period of five years and so long as Lake Shore Gold maintains at least a 10% ownership interest, it will be offered the right to participate in any future equity financings pro rata in order to maintain its ownership interest, (iii) for so long as Lake Shore Gold maintains at least a 19.9% ownership interest it will be entitled to nominate at least 2 directors to serve on Northern Superior's board and should its holdings drop below 19.9% but remain above 10%, it shall be entitled to nominate 1 director.
This transaction is subject to the negotiation and execution of a definitive agreement as well as the approval of the boards of directors of each of Northern Superior and Lake Shore Gold, and to the approval of relevant stock exchanges and other regulatory authorities as necessary.
About Northern Superior
Northern Superior Resources Inc. is a junior exploration company focused on exploring for gold in the Superior Province of the Canadian Shield. The Company is a reporting issuer in British Columbia, Alberta, Ontario and Quebec, and trades on the TSX Venture Exchange under the symbol SUP.
Forward looking statements: This news release includes certain "forward-looking information" within the meaning of Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act or 1995 (collectively, "forward looking statements"). Forward looking statements include predictions, projections and forecasts and are often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "forecast", "expect", "potential", "project", "target", "schedule", "budget" and "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved or other similar expressions and includes the negatives thereof. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding potential mineralization, exploration results, interpretation of results, the timing and success of exploration activities generally, the timing and results of future resource estimates, and future plans and objectives of Northern Superior are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Forward looking statements are based on a number of material factors and assumptions. Important factors that could cause actual results to differ materially from Northern Superior's expectations include exploration risks, changes in project parameters as plans continue to be refined, results of future resources estimates, future metal prices, availability of capital and financing on acceptable terms, general economic, market or business conditions, uninsured risks, regulatory changes, defects in title, availability of personnel, materials and equipment on a timely basis, accidents or equipment breakdowns, delays in receiving government approvals, unanticipated environmental impacts on operations and costs to remedy same, and other exploration or other risks detailed herein and from time to time in the filings made by the Company with securities regulators. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ from those described in forward looking statements, there may be other factors that cause such actions, events or results to differ materially from those anticipated. There can be no assurance that forward looking statements will prove to be accurate and accordingly readers are cautioned not to place undue reliance on forward looking statements.
Neither the 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 release.
SOURCE NORTHERN SUPERIOR RESOURCES INC.
For further information: For further information: Thomas F. Morris, President and CEO, Tel: (705) 525-0992, Fax: (705) 525-7701, e-mail: email@example.com, www.nsuperior.com