2013-01-10 14:34:31 -
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 01/10/13 -- Otis Gold Corp. ("Otis" or "the Company") (TSX VENTURE:OOO)(OTCQX:OGLDF) is pleased to announce that it has signed a Letter of Intent (the "Agreement") to Joint Venture its Oakley Project ("Oakley") with Lateral Gold Corp. ("Lateral"). Oakley is a high-potential, classic epithermal hot spring-type gold project that is host to an existing NI 43-101 compliant Inferred resource of 235,000 ounces Au at a grade of 0.55 gpt. The Agreement allows Lateral to earn up to an initial 70% interest in Oakley in exchange for a combination of cash, property expenditures and Lateral shares as follows:
Lateral shall pay a total of $915,000 to Otis according to the following schedule:
i. $15,000 upon execution of this Agreement (paid);
ii. $35,000 as of the date Lateral receives the acceptance of the TSX
Venture Exchange (the "Exchange") to the Option (the "Acceptance Date");
iii.$115,000 on or before the first anniversary of the Acceptance Date;
iv. $250,000 on or before the second anniversary of the Acceptance Date;
v. $250,000 on or before the third anniversary of the Acceptance Date; and
vi. $250,000 on or before the fourth anniversary of the Acceptance Date.
Additionally, Lateral shall incur a total of $5,700,000 of work expenditures on the Project subject to the following minimum obligations:
i. a minimum of $300,000 shall be incurred within 12 months following the
Acceptance Date with at least 50% to be spent directly on drilling;
ii. a further minimum of $700,000 shall be incurred within 24 months
following the Acceptance Date;
iii.a further minimum of $1,300,000 shall be incurred within 36 months
following the Acceptance Date;
iv. a further minimum of $1,500,000 shall be incurred within 48 months of
the Acceptance Date, and
v. a further minimum of $1,900,000 shall be incurred within 60 months of
the Acceptance Date.
Finally, Lateral shall issue to Otis a total of 4,950,000 common shares in the capital of Lateral according to the following schedule:
The Agreement also requires that Lateral shall provide NI 43-101 compliant Resource Estimates on or before both the 3rd and 4th anniversary dates and a Preliminary Economic Assessment by the 5th anniversary date, at which time the 70% Interest will have been earned.
Upon Lateral earning into a 70% interest, the Agreement provides Lateral with an additional option to earn a further 10% in exchange for $1,500,000 in cash (with $500,000 to be paid within 90 days of earning its 70% interest and a further $1,000,000 to be paid within 24 months of earnings its 70% interest), and 2,000,000 Lateral common shares (with 500,000 shares to be issued within 90 days of earning its 70% interest and a further 1,500,000 shares to be issued within 24 months of earnings its 70% interest). Upon earning an 80% interest, Lateral has the right to earn a final 20%, for a total interest of 100%, in exchange for the issuance of an additional 5,000,000 Lateral common shares and a cash payment based on a multiple of any NI 43-101 Inferred gold ounces contained in a NI 43-101 Report to be filed with the Exchange in conjunction with its approval of this Agreement, with both to made within 6 months of achieving the 80% interest. Additionally, an NSR of 2.5% will be issued in favour of Otis in connection with any lands subject to this agreement that are not already encumbered by royalty agreements.
States Otis President & CEO Craig Lindsay: "We are very excited to have Lateral Gold as a partner to assist us in moving the Oakley Project forward. Otis stands to be rewarded in the form of both cash and a significant potential shareholding in Lateral should the Oakley Project achieve the development targets that we envision for it."
Otis has an existing 70% interest in Oakley, which is being increased to 100% through a separate transaction with its joint venture partners, the closing of which is a condition precedent of this Agreement. As precedent for closing a definitive agreement by February 15, 2013, both the Company and Lateral will negotiate in good faith the final terms of a Definitive Agreement, which is subject to several terms and conditions including acceptance by the TSX-Venture Exchange. All currencies referenced are denominated in Canadian dollars.
Lateral is a gold exploration and development company listed on the Exchange and trading under the symbol "LTG". Lateral is led by an experienced team that includes Mr. Patrick Abraham, an experienced financier and businessman, and Mr. Casey Danielson, a career geologist with over 30 years' experience in mineral exploration and evaluation.
About the Company
Otis is a resource company focused on the acquisition, exploration, and development of precious metal deposits in Idaho, USA. Otis is currently developing its flagship property, the Kilgore Gold Project, located in Clark County, Idaho.
ON BEHALF OF THE BOARD
Craig T. Lindsay, President and CEO
This news release does not constitute an offer to sell or a solicitation of an offer to sell any securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Otis Gold Corp.
President and CEO