Balmoral Enters Into Agreement to Receive Minimum $3.6 Million Through Sale of Non-Core Asset

Balmoral Resources (TSX:BAR) has announced that it has entered into a Letter of Intent to sell its interest in the Discovery Zone Property to Wallbridge Mining COmpany Limited (TSX:WM).

As quoted in the press release:

Under the terms of the LOI Balmoral will receive an immediate payment of 2,381,575 common shares of Wallbridge, cash payments totaling either $3.4 or $3.5 million dollars over the next 60 to 120 days (see details below), and will retain a 1% Net Smelter Return Royalty (“NSR”) on all future production from the Property.

The benefits of the sale, should it be completed, to the shareholders of Balmoral include:

• Near term, dilution free, infusion of $3.4-3.5 million “hard” dollars from the sale of a non-core, inactive asset; which if spent on exploration on the Company’s Detour Trend Project would be eligible for a 28% tax credit to the Company through current exploration incentive programs in Quebec.
• “Up-side” leverage to future exploration activities on the Discovery Zone Property, and the other activities of Wallbridge, through a share position in Wallbridge. The 2,381,575 shares represent approximately 1.3% of the currently issued and outstanding shares of Wallbridge.
• Potential for future cash flow through the retained 1% NSR on the Discovery Zone Property
• Potential for near term enhancements to the local infrastructure network proximal to the Company’s Grasset Nickel-Copper-Cobalt-PGE deposit and recent gold discoveries.

Darin Wagner, president and CEO, said:

We are pleased to have found a group with a background of safe and environmentally responsible project management to potentially move the Discovery Zone forward. The funds acquired in this transaction will support our on-going efforts to delineate and expand the nearby Martiniere Gold System and our continued exploration efforts throughout the Detour Trend Project area.

Click here to read the full press release.