|By Marketwired .||
|June 26, 2014 07:30 AM EDT||
TORONTO, ONTARIO -- (Marketwired) -- 06/26/14 -- Norvista Capital Corporation ("Norvista" or the "Company") (TSX VENTURE: NVV) a resource merchant banking company is pleased to report that it has entered into an assignment agreement (the "Assignment Agreement") with Goldspike Exploration Inc. (TSX VENTURE: GSE) ("Goldspike"), granting Goldspike the right to acquire all of Norvista's rights, as lessee, under a mining lease agreement (the "Lease Agreement") with Owyhee Exploration ll LLC, as lessor, that consists of a 100% interest in the Lone Mountain Zinc Property (the "Property") comprised of 170 claims in Eureka County, Nevada.
Technical details and attributes of the Property are outlined in the press release from Goldspike dated June 24, 2014 available at www.sedar.com and at Goldspike's website www.goldspike.ca. Goldspike has reviewed the quality and completeness of the exploration work completed on the Property during the period 2006-2008 and is satisfied at this point that the work was completed in a professional manner and will provide updates on its follow-up work on the Property as appropriate.
Principal Transaction Terms
Under the terms of the Assignment Agreement Norvista will assign and Goldspike will assume all the rights and obligations of the lessee under the Lease Agreement. Goldspike will hold its interest in the Lease Agreement through a wholly-owned Nevada corporation, Lone Mountain Zinc Ltd.
The principal terms of the Lease Agreement require the lessee to make annual lease payments of $25,000 to the lessor during the first three years of the Lease Agreement, increasing to $50,000 in years four and five. Beginning in year six and thereafter the lease payments increase to $100,000 per year, however, these lease payments can be deducted from any net smelter returns royalty payments from production, if any, during the year in which the lease payment is made.
The lessee must make all payments to keep the Property in good standing and must carry out work programs on the Property of not less than $50,000 per year in the first three years of the Lease Agreement and $100,000 years four and five of the Lease Agreement.
The lessor will retain a 3% net smelter returns royalty on precious metals production, if any, and a 2% net smelter returns royalty on base metal production, if any. The royalties can be reduced to 2% and 1%, respectively, under certain circumstances.
The lessee has the right to lease the Property for an initial 20 year term with the option to extend the term of the Lease Agreement thereafter.
Donald H. Christie, President and Chief Operating Officer of the Company and R. Bruce Durham, Managing Director of the Company both also serve as directors of Goldspike. As such, the assignment of the Property under the terms of the Assignment Agreement is a "related party transaction" for the purposes of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company is relying on an exemption from the minority approval and formal valuation requirements of MI 61-101 due to the fact that the value of the transaction does not represent greater than 25% of the Company's market capitalization. The independent directors of the Company approved the Assignment Agreement and Messers. Durham and Christie abstained from voting on the approval of the Assignment Agreement. Other than Mr. Durham and Mr. Christie, no director of the Company abstained from voting on the Assignment Agreement.
Pursuant to the terms of the Assignment Agreement Goldspike will issue 2 million of its common shares ("Common Shares") to Norvista at a deemed value of $0.15 per Common Share and grant Norvista the right to subscribe to a private placement of up to 3,333,333 Common Shares at the price of $0.15 per Common Share for gross proceeds of up to $500,000 (the"Financing").
Consistent with its business model, this transaction allows Norvista to deploy a portion of its capital to fund the exploration of the Property under the supervision of Goldspike's exploration team, while also participating in the upside potential of Goldspike's existing portfolio of Yukon gold exploration properties. Norvista believes that Goldspike has a strong management team and stable ownership structure and the Company will provide input into ongoing strategy and capital deployment decisions at Goldspike in order to enhance shareholder value..
The closing of the Assignment Agreement and the completion of the Financing are subject to the approval of the TSX Venture Exchange.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
CAUTIONARY STATEMENT: This news release contains forward-looking information that is not comprised of historical facts. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward-looking information in this news release relates to, among other matters, the Company's indirect interest in the Property under the terms of the Assignment Agreement and the proposed Financing. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, failure to convert any estimated mineral resources to reserves, capital and operating costs varying significantly from estimates, the preliminary nature of metallurgical test results, delays in obtaining of failures to obtain required regulatory approvals, political risks, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of the Property, risks involved in the mineral exploration and development industry, and those other risks set out in the Company's public documents filed on SEDAR. The Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable. Nevertheless, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by applicable securities laws.
Norvista Capital Corporation
President and COO