ASX ANNOUNCEMENT 5 MARCH 2014
AURION TO ACQUIRE NORTHERN FINLAND PROJECTS FROM DRAGON MINING
Dragon Mining is pleased to announce that it has signed a binding Letter of Intent with Canadian listed entity Aurion Resources Limited (TSX-V:AU) ("Aurion"), whereby Aurion can acquire a 100% interest in two of Dragon Mining's non-core projects, Kutuvuoma and Silasselkä ("Projects"), in northern Finland.
In consideration Dragon Mining will receive 6,000,000 Common Shares in Aurion and Aurion will expend EUR1,000,000 on the Projects. Subject to execution of the Definitive Purchase Agreement ("Purchase Agreement") and the obtainment of regulatory approval, receipt of the shares and the expenditure requirement will occur over three years in accordance with the Payment Schedule provided in Table 1, or sooner at Aurion's discretion.
Table 1 - Payment Schedule
|
|
Signing
|
End of Year 1
|
End of Year 2
|
End of Year 3
|
|
Expenditures (EUR)
|
|
250,000
|
350,000
|
400,000
|
|
Common Shares
|
2,000,000
|
1,000,000
|
1,000,000
|
2,000,000
|
Project Location
In addition Dragon Mining will retain a 3% Net Smelter Royalty ("NSR") on any deposit mined by Aurion or any associated third party within the defined Area of Interests. The NSR can be purchased at any time on or before the sixth anniversary of signing of the Purchase Agreement with a one off payment of EUR 4,000,000 in cash.
Aurion will also make bonus payments to Dragon Mining as per the following:
a) EUR 2,000,000 in cash or equivalent in Aurion Common Shares (share price based on a five day volume weighted average price ("VWAP") immediately before the agreed settlement date) at Aurion's discretion for the defining of one million ounces of gold equivalent material within the Projects and the defined Area of Interests that is categorised as Measured and Indicated in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves or National Instrument 43-101 Standards for Disclosure for Mineral Projects;
b) EUR 1,000,000 in cash or equivalent in Aurion Common Shares (share price based on a five day VWAP immediately before the agreed settlement date) at Aurion's discretion for the defining of every additional one million ounces of gold equivalent material within the Projects and the Area of Interests that is categorised as Measured and Indicated in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves or National Instrument 43-101 Standards for Disclosure for Mineral Projects.
Aurion will be able to utilise the services of Dragon Mining's staff in Finland on an 'as needed' basis, under the terms of a separate Service Agreement. This will provide Aurion with access to a skilled geological team during start-up, while contributing to some of Dragon Mining's Finnish costs.
For further information on Aurion and the Projects please refer to the release on the Aurion website, www.aurionresources.com.
For and on behalf of
Dragon Mining Limited