Kerr Mines has entered a pair of agreements to sell its Northern Ontario assets in a deal worth $11 million.
Kerr’s assets in the North include the Kerr Addison property, the McGarry Mine property and additional McGarry Township claims in the Larder Lake mining division in Northeastern Ontario.
Pursuant to the terms of the first agreement the company has agreed to sell its Kerr Addison property, McGarry Mine Property and additional McGarry Township claims, in exchange for:
-CDN$1.25 million payable to the company on the date of closing;
-CDN$750,000 payable to the company 18 months from the date of closing; and
-A 2 per cent net smelter return royalty in favour of the company on the properties. The purchaser shall have the right to purchase 1 per cent of the royalty from the company for the sum of CDN$1 million.
-US$5.6 million payable to the company on the date of closing;
-US$2.4 million payable to the company upon the occurrence of any of the following events: sale of the property by the purchaser; sustained gold price increase equal to US$1,500 per ounce over a six-month period; establishment of 500,000 ounces of proven or probable reserves on the property; completion of a feasibility study; or secured production financing;
-A 2 per cent net smelter return royalty in favour of the company on the properties. The purchaser shall have the right to purchase 1 per cent of the royalty from the company for the sum of CDN$1 million.
Pursuant to the terms of the second agreement, the company has agreed to sell its Bear Lake Gold property and its remaining McVittie Township claims. The parties anticipate closing both transactions on or before the end of December, 2014.
