08:15:51 EDT Fri 29 Mar 2024
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Kermode Resources Ltd
Symbol KLM
Shares Issued 109,130,170
Close 2022-04-27 C$ 0.03
Market Cap C$ 3,273,905
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Kermode signs lease LOI for Brazeau Rumleski property

2022-04-28 14:17 ET - News Release

Mr. Peter Bell reports

LOI FOR MINING LEASE ON PATENTED CLAIMS IN MATHESON, ONTARIO

Kermode Resources Ltd. has signed a non-binding letter of intent for a lease agreement for patented claims in Matheson, Ont., called the Brazeau Rumleski gold project (BRG). The property has been used for farming since it was created after the Second World War and the owner has done small-scale prospecting at site. It has no publicly filed mineral occurrences and has never been worked by a public company before, although there are major mines nearby.

The lease agreement will cover approximately 160 acres of private property, where BRG owns surface, mineral and water rights. Kermode can earn a leasehold interest for any and all mining exploration and development work on the property. Over the 40-year life of the deal, the total payments are $3,345,000 cash and 36 million shares. The deal does not provide for a purchase, but only ever a lease agreement on an annual basis, with certain rights of use and not ownership.

Peter Bell, chief executive officer of Kermode, stated: "This is an aggressive deal with bullish partners. I am grateful for the opportunity to work with Mark Brazeau and his friends. Thanks Mr. Orville Rumleski for dealing with me on this project for Kermode. Let's find a gold mine!"

The due diligence period has commenced with an initial payment of $10,000 by Kermode to the vendor group. During the due diligence period, either Kermode or the vendor group can conduct any exploration activities at the property. Kermode shall have sole discretion to complete any exploration work at the property, the vendor group shall be able to do any work at their sole discretion, or the vendor and Kermode can work together at any time in any way. Both parties shall be able to publish any information at any time at their discretion regarding such work in compliance with relevant requirements for technical disclosure of mineral exploration results.

The due diligence period shall extend indefinitely. Kermode shall not be under any obligation to do any work during the due diligence period. This letter of intent is mutually non-binding for all parties. The terms of the letter of intent are subject to renegotiation by either party prior to establishing a definitive agreement, and it is uncertain if or when a final agreement will be reached.

The proposed terms are as follows:

  • 20-year lease, renewable for a single 20-year increment: Lease payments under the royalty for the previous five years shall be credited cumulatively against royalty payment obligations. All lease payments after the fifth year will be indexed and increased by the compounded CPI (consumer price index) inflation rate each year.
  • There is a 5-per-cent net smelter return royalty payable to the vendor group (one-quarter each), where each 1 per cent can be bought- down for $1-million. The total royalty package can be bought out for $5-million cash to the four members of the vendor group.
  • The vendor group has a sale participation right, whereby it shall receive 10 per cent of any proceeds received by Kermode from any future sale of any interest in the property.
  • There shall be no mutual area of interest clause. The terms of this deal shall not apply to any other property at any other time for any reason at the sole discretion of Kermode.
  • There shall be no work commitments.

About Kermode Resources Ltd.

Kermode is a junior mining company hunting for exploration opportunities around the world.

We seek Safe Harbor.

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