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Colombian Mines Corporation (TSXV:CMJ,FWB:X6C) entered into an option agreement with Overland Resources, whereby Colombian Mines retains a free carried interest through to production on the Company’s Rio Negro Project. Overland Resources may earn an undivided 90% joint venture interest by sole funding $5 million in exploration, and producing a Joint Ore Reserves Committee compliant Pre-Feasibility Study within five years, along with a full Feasibility Study within the recommended timeline to be specified in the Pre-Feasibility Study.
As quoted in the press release:
Additionally, Overland will make the following cash and share payments to Colombian Mines:
- US$75,000 cash upon execution of the Agreement.
- Within six (6) months of signing the Agreement, issuing US$75,000 worth of Overland shares, at an issue price based on the 30 day volume-weighted average price (“VWAP”) preceding the date of signing or 30 day VWAP preceding the date of the issuance, whichever is lower.
- On the first anniversary of signing: US$150,000 cash or at Overland’s discretion, US$75,000 cash and US$75,000 worth of Overland shares based on the 30 day VWAP immediately prior to the issuance of the shares. Greater than US$75,000 worth of Overland shares may be issued with the Company’s consent.
- On the second anniversary of signing: US$150,000 cash or at Overland’s discretion, US$75,000 cash and US$75,000 worth of Overland shares based on the 30 day VWAP immediately prior to the issuance of the shares. Greater than US$75,000 worth of Overland shares may be issued with the Company’s consent.
In addition to the above payments, Overland has the following minimum work commitments:
- Year 1 – US$150,000 (irrevocable work commitment).
- Year 2 – US$250,000.
- Year 3-7 – Minimum of US$200,000 per annum.
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