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Sunrise Resources (TSXV:SHI) announced it had signed a binding letter of agreement to acquire Colt Resources’ (TSXV:GTP) Extra High Property. Sunrise will pay Colt $75,000 for its 67 percent share as well as have a minimum $600,000 equity financing. Colt will also receive 2 million shares of Sunrise.
According to the press release, the following must be completed for the agreement to go through:
- Sunrise shall issue common shares to Colt as follows: 2,000,000 shares within ten (10) business days of the date of signing the Option Agreement (the “Effective Date”); 2,000,000 shares on or before the one year anniversary of the Effective Date; 2,000,000 shares on or before the two year anniversary of the Effective Date; and 3,000,000 shares on or before the three year anniversary of the Effective Date.
- Expenditures: Sunrise shall expend the following amounts on the Property: $150,000 on or before the one year anniversary of the Effective Date; an additional $200,000 on or before the two year anniversary of the Effective Date; and an additional $300,000 on or before the three year anniversary of the Effective Date.
- Cash Payment: Sunrise shall pay $75,000 to Colt following Sunrise completing a minimum $600,000 equity financing. As Sunrise completes its annual expenditures and share issuances it will earn the following portions of Colt’s 67% interest in the Property as follows: (i) After the first year, an initial 20% interest;(ii) After the second year, an additional 30% interest; and(iii) After the third year, the final 50% interest. The remaining 33% ownership of the Extra High Property is owned by High 5 Ventures Inc., which is required to proportionately contribute to all work programs or become diluted. If High 5 is diluted to less than 10%, their interest is automatically converted to a 0.5% NSR royalty. There is an underlying 1.5% NSR royalty on the Property payable to the original vendor. 50% of that royalty may be purchased from the vendor for $500,000. In addition, Colt has reserved a 1% NSR royalty, which may be purchased for $500,000.
Click here to read the Colt Resources Inc. (TSXV:GTP) press release
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