Calico Accelerates Exercise of Grassy Mountain Option
VANCOUVER, March 29, 2012 /PRNewswire/ – Calico Resources Corp. (“Calico” or the “Company”) (TSX-V: CKB) (OTCQX: CVSHF) is pleased to
announce that it has entered into an agreement with Seabridge Gold Inc.
(“Seabridge”) to amend the terms of the original option (the “Original
Option”) that Seabridge had granted Calico in April 2011. The amended
terms (the “Amended Option”) allow Calico to immediately acquire a 100%
interest in the Grassy Mountain Property (the “Property”) located in
Under the terms of the Original Option, Calico was to issue Seabridge 4
million common shares in April 2012 and a further 8 million common
shares upon receipt of mining and operating permits. Seabridge also had
the option to receive either a 10% NPI or $10 million payment upon
delivery of a feasibility study.
Under the terms of the Amended Option, Calico will immediately acquire a
100% interest in the Property in consideration for (a) the issuance of
11,000,000 securities (in a to-be-determined combination of common
shares and special warrants) and (b) the immediate granting of a 10%
Net Profits Interest (an “NPI”) to Seabridge. Each special warrant
entitles the holder to convert it into one common share of Calico,
without payment of any cash, subject to the number of common shares
held by Seabridge after conversion being less than 20% of Calico’s
outstanding common shares. Furthermore, following Calico’s completion
of a feasibility study and following the Property being fully permitted
and bonded, Seabridge will have the option of selling the 10% NPI to
Calico for a one-time payment of $10 million. Calico has agreed that
should Seabridge elect to sell the NPI for the $10 million payment and
Calico not make payment, then Calico must return the Property to
The amended terms place Seabridge in a position similar to that under
the terms of the Original Option agreement. Calico believes that prior
to the full permitting and bonding, Calico will already have in place
its financing for development of the mining project, and that such
financing amount would include any required payment to Seabridge should
Seabridge elect to sell the NPI for the $10 million payment.
These changes will be beneficial to both Calico and Seabridge. First,
Calico will benefit from immediately acquiring full title to the
Property. Second, Calico will benefit from a reduction in the total
number of shares to be issued under the original terms of the Option
Agreement with the re-negotiated number being 1,000,000 fewer. Third,
Calico will benefit in that the amendment has been structured to ensure
that the security issuances by Calico to Seabridge will not result in
Seabridge owning 20% or more of the issued and outstanding shares of
Calico unless approved by a majority of the shareholders. Seabridge
would benefit from the early receipt of shares, special warrants and
the NPI at this time.
Accordingly, Calico believes that the terms of the proposed amendment of
the Grassy Mountain Original Option are very advantageous to Calico.
If any special warrants remain unexercised at the time of the next
annual general meeting of Calico, Calico has agreed to ask its
shareholders to approve the exercise of those outstanding special
warrants and approve Seabridge then holding more than 20% of the issued
shares in Calico.
Closing of this transaction is expected late April 2012.
The TSX Venture Exchange has advised that the amendment of the Grassy
Mountain Option on the terms described above will not require Exchange
On behalf of the Board,
William S. Wagener
President and CEO
Neither 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.
Certain statements in this press release are forward-looking statements.
The reader is cautioned that assumptions used in the preparation of
such information, although considered reasonable by Calico at the time
of preparation, may prove to be incorrect. Forward-looking statements
involve known and unknown risks, uncertainties and other factors which
may cause the actual results, performance or achievements of Calico
(including its subsidiaries) to be materially different from any future
results, performance or achievements expressed or implied by the
forward-looking statements. Such risks and uncertainties include, among
others, our ability to achieve financing for the anticipated mining
project and to satisfy any payments required to be made to Seabridge in
our public disclosure, which is available on SEDAR at www.sedar.com, and which should be reviewed in conjunction with this document.
Although Calico has attempted to identify important factors that could
cause actual actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors
that cause actions, events or results not to be as anticipated,
estimated or intended. There can be no assurance that forward-looking
statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on
forward-looking statements. Calico expressly disclaims any intention
or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except in accordance with applicable securities laws.
SOURCE Calico Resources Corporation