Commander gets out of Storm, into Aston Bay
Last updated 12/27/2015 at Noon
Commander Resources Ltd. Dec. 17 reported an agreement that will transfer full ownership of the original core claims in the Storm copper property in Nunavut, including the Seal zinc prospect, to Aston Bay Holdings Ltd. To acquire 100 percent of the Storm property, Ashton Bay has agreed to issue 11 million shares to Commander up front and up to another 5.5 million shares once C$6 million has been spent on exploration at Storm, including amounts already spent, or after Aston Bay raises another C$4 million.
The number of shares issued will be calculated to bring Commander's shareholding up to 25 percent of Ashton Bay's issued and outstanding shares, but will be capped at 5.5 million shares.
Shares held by Commander will be subject to a voting trust agreement with management of Aston Bay, as well as a four-year escrow in which the initial 11 million shares are released in installments of 25 percent per year beginning one year after the closing of the agreement.
Commander will retain a 0.875 percent gross overriding royalty, which Aston Bay can buy down to 0.4 percent for C$4 million.
This arrangement replaces the existing option and joint venture agreement under which Aston had an option to earn up to a 70 percent interest in the Storm property and a further right to buy out Commander's participating interest.
Commander will now benefit in discovery within the expanded Storm Property through its equity interest in Aston Bay, as well as retaining a significant gross overriding royalty in the original claim block.
"Aston Bay has demonstrated its ability to advance this exceptional copper project despite the difficult times facing the industry," said Commander President and CEO Eric Norton.
"The new agreement enables Aston Bay to advance the project with a simplified ownership, and gives Commander's shareholders immediate value that is highly leveraged to continued success in this project with no further cost or obligations to Commander." Aston Bay anticipates a 2016 exploration program that will include additional geophysics and re-logging of historical core in preparation for drilling in the summer.