Aurion Amends Purchase Agreement With Dragon
Aurion Resources Ltd. (“Aurion”) (TSX VENTURE: “AU”) is pleased to announce that it has executed an agreement (“Letter Agreement”) with Dragon Mining Limited (ASX:DRA) (‘Dragon”) to amend the Definitive Purchase Agreement (“Agreement”) for the acquisition of the Kutuvuoma and Silasselkä Projects (“Projects”) in northern Finland.
The amendments agreed in the Letter Agreement include the removal of the Right of First Refusal clause, the inclusion of an additional clause in relation to Confidential Information and the relaxing of the time period before Aurion can seek a Third Party Partner.
In consideration for these amendments and in accordance with and subject to applicable securities laws and exchange rules, Aurion will issue Dragon 750,000 Common Shares, which are above and beyond the purchase price as outlined in the Agreement. 250,000 Common Shares will be issued to Dragon as soon as possible after the execution of the Letter Agreement and 500,000 Common Shares at either:
- the same time as the final instalment of 2,000,000 Consideration Shares that are due to be issued to Dragon Mining on the third anniversary of the Kutuvuoma and Silasselkä Claims becoming valid or earlier at Aurions discretion; or
- if the Purchase Agreement is terminated.
The tranche of 250,000 Common Shares will be escrowed for 18 months, from the date of issuance of the initial tranche of Common Shares in Aurion on 8 September 2014.
Dragon and Aurion executed the Agreement on 23 May 2014, whereby Aurion could acquire a 100% interest in the Kutuvuoma and Silasselkä Projects in northern Finland. In consideration Dragon Mining were to receive 6,000,000 Common Shares in Aurion and Aurion were to expend €1 million on the Projects in accordance with the Agreements Payment Schedule, or sooner at Aurion’s discretion. Dragon Mining will retain a Net Smelter Royalty of 3% (which can be purchased for €4 million) and receive bonus payments based on the definition of gold equivalent resources by Aurion on the Projects.
In accordance with the Agreement, Dragon has already received three of the four tranches of Common Shares in Aurion totaling 4,000,000 Common Shares, which equates to a 9.40% holding in Aurion on an undiluted basis. These Common Shares are escrowed for 18 months from the date of issuance of the initial tranche of Common Shares on 8 September 2014.
Mike Basha commented, “We gratefully acknowledge Dragon’s flexibility in agreeing to these amendments, especially in this difficult market for exploration stage projects”.
The Kutuvuoma deposit is a high-grade, shear zone hosted gold deposit that was discovered in the mid-1990’s by Outokumpu Oy, while exploring for base metals. Dragon Mining Oy (“Dragon”) acquired the property from Outokumpu in 2003 as part of a large property and data package and aside from data compilation and reconnaissance mapping conducted no other exploration activities. Outokumpu drilled 47 shallow core and reverse circulation drillholes totalling 3425 m, testing Kutuvuoma approximately 175 m horizontally and 175 m vertically. The mineralization is associated with sulphidic quartz veins and vein breccias and silicified meta-sediments and meta-volcanics and remains open in all directions. Free gold is common in the quartz veins. Drill intercepts from Outokumpu’s drilling include 7.2 g/t Au over 19.4 m, 8.5 g/t Au over 8.6 m and 9.7 g/t Au over 5.1 m.
A mechanical trenching program conducted by Aurion this past fall, identified new gold mineralization, up to 650 m east and 360 m west of the main deposit. Trench 2, situated 90 m east of the deposit assayed 4.7 g/t Au over 8 m including 10.0 g/t Au over 1 m. Trench 8 situated a further 560 m east returned 3.1 g/t Au over 5.6 m, including 10.0 g/t Au over 1.0 m. Trench 4 located 360 west of the main zone assayed 5.3 g/t Au over 4 m including 11.6 g/t Au over 1 m. Trenching was hampered by deep overburden prohibiting reaching bedrock in many places, however, despite this the trenching program successfully extended the Kutuvuoma trend to over 1000 m in length and it remains open in both directions.
Signficant gold mineralization in angular quartz boulders was discovered during reconnaissance prospecting at the Silasselka project. Assays from 56 rock samples ranged from nil to 219 g/t Au. The property covers a 16 km long interpreted northern extension of the Hanhimaa Shear Zone. Aurion’s discovery of high grade gold and anomalous As in numerous rock samples along the northern projection of the HSZ demonstrates the gold potential and the analog to Hanhimaa and particularly the Kittila deposit where gold mineralization is associated with As-bearing sulphides.
The Silasselkä project area has no documented historical gold exploration. Aside from compilation and reconnaissance mapping by Dragon no exploration activities have been performed on the property since the 1960’s.
The aformentioned projects are situated in the Central Lapland Greenstone Belt (CLGB) of Northern Finland and are accessible by road. The CLGB is a highly prospective, underexplored Proterozoic greenstone belt that hosts many gold, base metal, magmatic Ni-Cu-PGE prospects and deposits, including Agnico’s Kitttilä Gold Mine (Reserves as of Dec 31 2012, 4.8 Million ounces grading 4.5 g/t Au per Agnico 2012 annual report)), First Quantum Minerals Ltd.’s Kevitsa Ni-Cu_PGM mine (Reserves as of Dec 31 2012 of >400 Mt 0.3% Ni, 0.4% Cu and 0.54 g/t combined Au-Pt-Pd per First Quantum Ltd. 2012 annual report) and the recently discovered Sakatti Ni-Cu-PGE deposit owned by Anglo American Plc (1-2 % Ni, 1-2% Cu, 0.5-1.0 g/t PGE, >100 million tonne (Anglo American Plc FEM Mining Conference presentation Nov 3 ,2011).
Finland was ranked number one in the Fraser Institute’s top mining destination survey in 2014 and is one of the most prospective, underexplored, stable jurisdictions in the world. It is important to note that Finland only opened its border to foreign mining investment in the mid-1990s.
For more information on these projects please visit our website at www.aurionresources.com.
Mike Basha, P.Eng., P.Geo., President and CEO of Aurion, a Qualified Person as defined by National Instrument 43-101, is responsible for the preparation of this release.
Certain statements contained in this release constitute forward-looking information. These statements relate to future events or future performance. The use of any of the words “could”, “intend”, “expect”, “believe”, “will”, “projected”, “estimated” and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Companies’ current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. The forward-looking information contained in this release is made as of the date hereof and Aurion is not obligated to update or revise any forward looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward looking information. The foregoing statements expressly qualify any forward looking information contained herein.
On behalf of the Board,
President & CEO
For further information on Aurion Resources please contact: Mike Basha at (709) 699-8300 or (709)722-2141 or firstname.lastname@example.org ; For further information on these projects please visit ourwebsite at www.aurionresources.com.
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