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Iconic Minerals Ltd (2)
Symbol ICM
Shares Issued 80,630,778
Close 2019-08-09 C$ 0.09
Market Cap C$ 7,256,770
Recent Sedar Documents

Iconic Minerals to cancel option for Hercules interest

2019-08-09 14:06 ET - News Release

Mr. Keturah Nathe reports

ICONIC DISPOSES OF ITS INTEREST IN THE HERCULES PROJECT, NEVADA

Iconic Minerals Ltd. has entered into an agreement dated Aug. 9, 2019, with Great Basin Resources Inc., Eclipse Gold Mining Corp. and Hercules Gold USA LLC (HGU), a subsidiary of Eclipse, in respect of the Hercules gold property located in Lyon county, Nevada.

Iconic currently holds an option from Great Basin to acquire a 100-per-cent interest in the Hercules project and it owns certain exploration data relating to the Hercules project.

Pursuant to the Hercules option agreement, Iconic will terminate the existing option and a revised minerals lease agreement assigned to Iconic by way of assignment dated Oct. 4, 2013, and transfer to HGU the existing data.

In consideration for the data transfer and the termination of the existing option and the lease, Eclipse will:

  • Make a cash payment to Iconic in the sum of $325,000 within five business days of the execution of the Hercules option agreement;
  • Issue to Iconic up to an aggregate of four million common shares in the capital of Eclipse as follows:
    • One million Eclipse shares on the date which is 10 days immediately following the date on which Eclipse's shares become listed on a public stock exchange or stock quotation system;
    • One million Eclipse shares on each of the first, second and third anniversary dates of the listing date.

Under the terms of the Hercules option agreement, Great Basin has granted an option to HGU under which HGU must complete certain exploration expenditures over a three-year period and make cash payments to Great Basin.

In the event that HGU fails to exercise the HGU option in accordance with the Hercules option agreement, Iconic may elect to receive an assignment of HGU's rights and benefits under the Hercules option agreement and to assume certain of HGU's remaining obligations under the Hercules option agreement as may be outstanding at such time. The term of the HGU option is the earlier of the date of exercise of the HGU option, the termination of the Hercules option agreement or 12 years from the listing date.

Related party transaction and MI 61-101 considerations

Great Basin and Richard Kern may be considered related parties of the company as Mr. Kern, a director, the president and the chief executive officer of the company, owns and/or controls Great Basin and the transactions contemplated under the Hercules option agreement, which may be a related party transaction under Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions).

The directors of Iconic have determined that the transaction, if it were determined to be a related party transaction, would be exempt from the formal valuation requirements under Section 5.4 of MI 61-101 as the company's securities are not listed or quoted on any of the stock exchanges enumerated therein and the minority shareholder approval requirements under Section 5.6 of MI 61-101 in reliance on the exemption set forth in Section 5.7(a) of MI 61-101.

We seek Safe Harbor.

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