North Arrow to Sell Royalty on Redemption for $800,000

North Arrow Minerals Inc. (TSXV:NAR) announced that it’s reached an agreement under which Umgeni Holdings International Ltd. will acquire a royalty interest in North Arrow’s Redemption project for $800,000.
Umgeni is a private company, and Christopher Jennings, a director at North Arrow, is a beneficiary of its sole shareholder.
As quoted in the press release:

Under the terms of the agreement with Umgeni, Umgeni has agreed to pay North Arrow $800,000 to acquire the following royalty interests in North Arrow’s Redemption Diamond Project:

• a 1.5% gross overriding royalty on diamonds (“GOR”)  and a 1.5% net smelter returns royalty on base and precious metals (“NSR”) for three mineral claims owned 100% by North Arrow;
• a 1.25% GOR and 1.25% NSR on 12 mineral claims and 5 mining leases (the “ADD Claims”) that are currently under option from Arctic Star Exploration Corp. (TSXV-ADD). These 1.25% royalties will be payable from North Arrow’s ultimate interest in the ADD claims and NAR will have sole responsibility for paying them. Under the option agreement with Arctic Star, North Arrow can earn a 55% interest in the properties by incurring $5 million in exploration expenditures prior to July 1, 2017. If North Arrow decides not to proceed beyond 2016 with further exploration under the option agreement with Arctic Star, Umgeni has the right to acquire North Arrow’s interest in the option. If Umgeni does not acquire North Arrow’s interest in the option agreement and the option agreement terminates, then Umgeni will have no further right to receive royalties for any ADD Claims in which North Arrow does not retain an interest. Arctic Star has consented to the granting of these 1.25% royalties on the ADD Claims and the possible future transfer to Umgeni of North Arrow’s interest in the option agreement.

It is a further term of the agreement with Umgeni that North Arrow must conduct a minimum $800,000 exploration program at the Redemption Project before August 2016.

Ken Armstrong, president and CEO of North Arrow, commented:

This agreement with Umgeni represents a non-dilutive hard dollar financing that strengthens North Arrow’s treasury and allows North Arrow to immediately move ahead with exploration drilling programs at both the Redemption and Pikoo Diamond Projects. We expect drilling at the Pikoo Project to commence in mid-February and planning is underway to conduct a drilling program at Redemption starting in mid-March.

Click here to read the full North Arrow Minerals Inc. (TSXV:NAR) press release.