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Ubique Minerals & Kapuskasing Gold execute option agreement

Mining News - Published on Tue, 19 Feb 2019

Image Source: Junior Mining Network
Ubique Minerals Limited and Kapuskasing Gold Corp announced that they have executed the Option Agreement which provides for Kapuskasing granting Ubique an option to earn a 55% or greater interest in Kapuskasing's Daniel's Harbour property in western Newfoundland, which comprises 42 claim units covering an aggregate of 1,326 hectares, adjacent to Ubique's Daniel's Harbour property to its west and making for a property area of more than 4,000 hectares.

The Option Agreement requires Ubique to exercise the option by making the work and payment commitments as follows:

On the date of signing of the definitive agreement, $10,000 cash and 500,000 shares of Ubique, which has been made; Prior to March 9, 2019, a minimum work expenditure of $12,000 and file an assessment report; Prior to September 15, 2019, a minimum work expenditure of $100,000 inclusive of the $12,000 above; Prior to the 1 year from the definitive agreement date, $10,000 in cash and an additional 300,000 common shares of Ubique; Prior to February 28, 2020, make a minimum additional work expenditure of $200,000; Prior to 2 years from the definitive agreement date issue, an additional 200,000 common shares of Ubique; Prior to February 28, 2021, a minimum additional work expenditure of $300,000, which expenditures will include any payments and commitments needed to be made to the underlying vendors of the optioned property; Upon Ubique having made the above expenditures and payments; Ubique will have earned a 55% interest in the property. Ubique will be granted the option to earn an additional 15% interest in the property by spending an additional $400,000 on exploration and paying the underlying vendors a cash payment of $40,000 as required by the underlying agreement with the vendors.

Upon UBQ earning either a 55% or 70% interest in the property, the companies will form a joint venture to continue exploration or KAP may elect to grant UBQ the right to earn an additional 5% interest in the property for every additional work expenditure of $100,000 to a limit of 95% ownership by UBQ at which time the agreement provides for KAP's interest to be converted to a 2% Net Smelter Royalty ("NSR").

UBQ will then have the right to buy back 1.75% of the NSR for $2,000,000. The underlying vendors will be entitled to an NSR of 3% of which 2% may be repurchased for $2,000,000. In addition, the underlying vendors may be entitled to a bonus payment in the event that the Operator delineates a National Instrument 43-101 compliant resource of a minimum of 5,000,000 tonnes of ore with a grade of at least 7% zinc.

The KAP property covers most of the area of the historic mining areas of the former Daniel's Harbour mine and UBQ intends to review all the relevant historic data relating to diamond drilling in the vicinity of the mined out areas to determine where and what potential exists for extensions of historically mined areas.

Ubique CEO Gerald Harper commented that "the company has had considerable success identifying extensions of historically mined areas on its own property and considers that some of the historically mined areas on the Kapuskasing property should have similar high potential and that with a combined exploration target area of more than 4,050 hectares the likelihood of defining a large enough resource for consideration of development has been significantly enhanced".

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Posted By : Rabi Wangkhem on Tue, 19 Feb 2019
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