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LONDON - Ormonde Mining plc (AQSE:ORM) announced Wednesday that Peak Nickel Limited (PNL), in which it holds an 18.9% stake, has entered an option agreement with Winshear Gold Corp. (TSXV:WINS) for the Portsoy Project in Aberdeenshire, Scotland.
Under the agreement, Winshear can earn a 100% interest in the 250 km² project by completing 1,000 meters of drilling with electromagnetic surveying, spending £3 million over five years with minimum annual expenditures of £300,000, and issuing 6.5 million common shares to PNL in installments over the five-year period.
Upon completion of the earn-in, PNL will retain a 1% Net Smelter Returns Royalty capped at £10 million. If the project is acquired by a third party after Winshear completes the earn-in, PNL would receive 10% of the value paid to Winshear, also capped at £10 million.
Winshear has already paid PNL £65,000 upon execution of the agreement. PNL will serve as the designated contractor for the first two years of exploration, subject to Winshear’s control through a Management Committee. Winshear can assume the contractor position by paying PNL £100,000.
Following TSX-V approval, Winshear plans to commence the drill program and initiate metallurgical testing to determine optimal recovery processes for the mineralization.
Ormonde’s CEO Brendan McMorrow stated that while the company did not support the transaction, believing it undervalues the opportunity, it notes the potential to realize value on its investment without further exposure to exploration costs in a challenging nickel market.
The announcement was made through a company press release statement.
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