Orex and Osisko Sign Option and Joint Venture Agreement Nov 12, 2009 9:04:00 AM
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View Additional ProfilesMONTREAL, QUEBEC--(Marketwire - Nov. 12, 2009) - OREX EXPLORATION INC. (TSX VENTURE:OX) (FRANKFURT:O5D) is pleased to inform its shareholders that it has signed an Option and Joint Venture Agreement (the Agreement) with Osisko Mining Corporation (TSX:OSK). As outlined in the Company's news release of September 29, 2009, Osisko now has a working right and an exclusive option to acquire up to a 60% undivided interest in Orex's Goldboro property and surrounding claims in Nova Scotia (collectively, the Property), by incurring exploration and development work expenditures and by making a private placement in the Company. Other terms of the Agreement include the following:
- Upon signing of the Agreement, Osisko will close a subscription in the capital stock of Orex of 13,000,000 Units at a price of $0.10 per Unit, for gross proceeds of $1,300,000. Each Unit consists of one common share and one transferable common share purchase warrant. Each transferable common share purchase warrant entitles its holder to acquire one common share for $0.125 for a period of three years. The common shares and underlying securities comprising the Units are subject to a four-month hold period.
- In order to acquire a 50% undivided interest in the Property on or before September 29, 2013 (the Initial Option), Osisko shall incur exploration and development expenditures:
- In the amount of at least $1,500,000 on or before September 29, 2010;
- In the aggregate amount of at least $3,500,000 on or before September 29, 2011; and
- In the aggregate amount of at least $8,000,000 over the following two years, that is, on or before September 29, 2013.
- Osisko may, at its sole discretion, accelerate and apply exploration and development expenditures to future years' expenditures and, accordingly, the Initial Option may be exercised sooner.
- Osisko shall solely fund a prefeasibility study to earn an aggregate 60% interest (that is, an additional 10% interest) in the Property on or before September 29, 2015 (the Additional Option).
Between now and up to September 29, 2015 (the Option Period), Osisko will be the manager of the project. A Management Committee will be formed during the Option Period with two representatives from each party. This Management Committee will be responsible for revising programs submitted by Osisko and for approving and evaluating the results of all programs. In the event of a tie, Osisko shall have the casting vote during the Option Period.
Upon acquiring a 50% or a 60% interest in the Property, a joint venture would be formed between Osisko and Orex.
Mark Billings, President and CEO of Orex, commented, "The signing of this Option and Joint Venture Agreement with Osisko is a very significant milestone for Orex. By having Osisko now as our partner, this will help us advance more quickly the development of the Goldboro Property, with the aim of eventually having an operating gold mine."
Subject to approval by the TSX Venture Exchange and other regulatory authorities, Orex may pay a finder's fee in connection with this transaction to Canaccord Adams in the amount of $65,000 in cash and 650,000 Units, which are to be issued on the same terms and conditions as the Units issued to Osisko and as described above.