Additionally, the Amendment provides that in the event the Optionee sells or otherwise transfers its interest the Property (collectively, “transfer”), depending on the value of consideration received by the Optionee, the Company and the other Optionors may receive bonus payments. The Company would be entitled to 70% of any bonus payments received. The Amendment does not contemplate the Company or other Optionors receiving bonus payments if the Property is transferred for less than US$30,000,000, however, in the event that the Optionee transfers the Property for an aggregate consideration equal to or greater than US$30,000,000 but less than US$40,000,000, the Company and other Optionors would receive a bonus payment equal to 20% of the amount of consideration received exceeding US$30,000,000. In the event the Optionee transfers the Property for consideration equal to or greater than US$40,000,000 but less than US$50,000,000, the Company and other Optionors would receive a bonus payment of US$2,000,000 plus an additional 10% of the amount of consideration that exceeds US$40,000,000. Finally, if the Optionee receives consideration for the Property in excess of US$50,000,000, the Company and other Optionors would receive a bonus payment of US$3,000,000 plus an additional 20% of the amount of consideration which exceeds said amount. This bonus payment obligation is also in place for partial transfers of the Property by the Optionee whereby a proportionate bonus payment shall be paid based on the percentage interest of the Property being transferred.
As announced in a news release dated May 25, 2012, the Company and the other Optionors have been involved in litigation with the Optionee related to the original option agreement. Concurrent with the amendment described above, the Company, the other joint Optionors and the Optionee have entered into a settlement and release relating to the litigation. The Company is pleased to move forward with its business and believes that settling the lawsuit and amending the agreement to focus on its Lisbon Valley project is in the best interests of the Company.
Mr. Simon Tam, President, Director is quoted “The Company is pleased to have reached an agreement with Passport Potash Inc. This settlement allows both companies to move forward with its business objectives and further demonstrates management’s commitment to the benefit of our stakeholders in North American Potash Developments Inc. This agreement will now enable our team to strengthen our resources and focus our efforts towards the advancement and development of the Lisbon Valley project in the state of Utah.”
North American Potash Developments Inc. Lisbon Valley project consists of nine state mineral leases totalling 6,421 acres and applications for potash prospecting permits, totalling 24,640 acres. The project is located in San Juan County, Utah, within the Paradox Basin.
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