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Colibri Announces Signing of Final Earn-In and Shareholders Agreement with Agnico-Eagle Mines Ltd.
Wednesday, March 02, 2011
Vancouver, British Columbia - March 2, 2011. Colibri Resource Corporation ("Colibri" or the "Company") (TSX.V-CBI) is pleased to announce the signing of an Earn-In and Shareholders Agreement dated February 28, 2011 (the "Agreement") with Agnico-Eagle Mines Ltd. ("AEM") which agreement reflects the terms of the letter of intent entered into between Colibri and AEM in December 2010.
Pursuant to the Agreement, AEM may acquire up to a 75% interest in the Company's Colibri gold project in Sonora, Mexico (the "Colibri Project") and form a joint venture with the Company by making qualified exploration expenditures and payments to Colibri. To earn a 75% interest in the Colibri Project, AEM is required to spend, over the next three years, a minimum of US$3.0 million in exploration expenditures as well as complete a positive feasibility study within five years. In addition, AEM will be required to make option payments totaling $1,452,000 over a seven year period. After completion of the feasibility study and earning a 75% in the Colibri Project, AEM and Colibri may form a joint venture to develop the Colibri Project.
The Agreement is conditional upon the approval of the board of directors of each of AEM and Colibri, approval of the TSX-Venture Exchange (the "TSX-V") and incorporation of a Mexican wholly-owned subsidiary (the "Operating Company") of a British Columbia company (the "Joint Venture Company") to hold the right, title and interest in the Colibri Project. Under the terms of the Agreement, Colibri will transfer the concessions comprising the Colibri Project to the Operating Company whose operations, including exploration, development and mining will be managed by a general manager.
Pursuant to the Agreement, Colibri will own 100% of the Joint Venture Company until AEM successfully exercises its first option to acquire a 51% interest by incurring expenditures of not less than US$1.5 million and making cash payments to Colibri in the amount of US$218,000, all within 18 months of the effective date of the Agreement. Thereafter, AEM may exercise a second option to acquire an additional 24% interest in the Joint Venture Company by incurring expenditures of not less than US$1.5 million and making further payments to Colibri in the aggregate amount of US$311,000, all within 36 months of the effective date of the Agreement. Upon exercise of both options, AEM will hold a 75% interest in the Joint Venture Company subject to a reversion provision whereby AEM's ownership interest would revert to 51% if it does not complete a positive feasibility study within five years of the effective date and pay an aggregate of US$923,000 to Colibri over a period of three years commencing 48 months after the effective date of the Agreement. AEM may satisfy its cash payment obligation under the Agreement by issuing shares of AEM to Colibri in lieu thereof.
The Agreement also provides for the purchase by AEM of an aggregate of 3.0 million units of Colibri at a price of $0.20 per unit within seven days of the effective date of the Agreement. Each unit will consist of one common share of the Company and one share purchase warrant exercisable for one additional Colibri common share at a price of $0.35 per share for a period of 24 months from the effective date of the Agreement. The Agreement also grants a right of first refusal to AEM to purchase a percentage equal to AEM's then holdings in Colibri or 9.9% of any future share or share right issuances by the Company.
The Colibri Project, centered within the Sonora gold belt near the city of Caborca, hosts dozens of historical artisanal mine workings that mostly occur on two northwest-trending thrust fault-detachment fault systems that transect the claim package. Similar major structures along strike from the Colibri Project host La Herradura, the largest gold mine in Mexico, (operated jointly by Newmont and Fresnillo PLC, formerly Penoles), the El Chanate mine operated by Capital Gold, the San Francisco mine operated by Timmins Gold Corporation, and other advanced projects such as Noche Buena (located 20 km northwest of Colibri and currently being developed by Fresnillo).
"We are excited the Agreement with Agnico-Eagle Mines has been completed and are anxious for exploration work to begin at the Colibri site," said Lance Geselbracht, President of Colibri. "We are now able to focus our exploration efforts at our Ramard Silver site in Sonora (see February 17, 2011 news release, www.colibriresourcecorp.com). Prior drilling at Ramard has yielded excellent results and we believe Ramard has the potential to host a bulk tonnage silver mine."
About Colibri Resource Corporation:
Colibri owns four claim packages in the Mexican state of Sonora. In addition to the Colibri gold project, Colibri owns 100% of the 500 hectare Evelyn gold claim located 12 kilometers northeast of the Noche Buena gold project. The Ramard Project is a 4000 hectare project located in central Sonora, that encompasses numerous historical mine workings containing silver, zinc and lead in a skarn/porphyry system. The 6600 hectare Leon project is a large molybdenum-copper porphyry contiguous with the Creston Moly Corp (TSX-CMS) project currently in final feasibility stage for mine construction. Additional property information can be found on the company website at www.colibriresourcecorp.com/s/Projects.asp
For Further Information Please Contact:
Lance Geselbracht, P.E., President and Chief Executive Officer
Tel: (250) 755-7871
Website: www.colibriresourcecorp.com
Disclaimer for Forward-Looking Information:
Certain statements in this release are forward-looking statements, which reflect the expectations of management. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future, including but not limited to the closing of the Agreement with AEM, the consummation of the related private placement transaction, AEM incurring the required work commitments or completing the resulting feasibility study, making the required option payments or the Ramard site being capable of hosting a bulk tonnage silver mine. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management's current views and are based on certain expectations, estimates and assumptions which may prove to be incorrect. A number of risks and uncertainties could cause our actual results to differ materially from those expressed or implied by the forward-looking statements, including: (1) a downturn in general economic conditions in North America and internationally, (2) the inherent uncertainties and speculative nature associated with mineral exploration and production, (3) a decreased demand for minerals, (4) any number of events or causes which may delay or cease exploration and development of the Company's property interests, such as environmental liabilities, weather, mechanical failures, safety concerns and labor problems; (5) the risk that the Company does not execute its business plan, (6) inability to retain key employees, and (7) inability to finance operations and growth, (8) other factors beyond the Company's control. These forward-looking statements are made as of the date of this news release and, except as required by law, the Company assumes no obligation to update these forward-looking statements, or to update the reasons why actual results differed from those projected in the forward-looking statements.
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.
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