Claim Post Resources Amends Agreement With Gossan Resources Ltd. on Manigotagan Silica Sand Property
TORONTO, ONTARIO--(Marketwired - Jun 25, 2015) - Claim Post Resources Inc. (TSX VENTURE:CPS) (the "Company") has amended its Manigotagan Agreement with Gossan Resources Ltd. to provide an extension in the due date of a $430,000 payment for 6 months to December 18, 2015, subject to interest at 1% per month, and a payment of 1,000,000 common shares of Claim Post, as well as an increase in the advance royalty provisions. The issuance of the Claim Post shares is subject to the approval of the TSX Venture Exchange (TSX.V).
On June 18, 2013, Gossan agreed to sell its Manigotagan Silica Frac Sand Project, comprised of 9 quarry leases located near Seymourville, Manitoba, to Claim Post (CPS-TSX.V) under the terms of a sale agreement. Under the agreement, Gossan has previously received 3,000,000 common shares of Claim Post and a two cash payments totaling $700,000. The payment date for the final $430,000 cash payment has been extended to December 18, 2015. Gossan is also entitled to an ongoing royalty interest.
Under the terms of an amended agreement, an initial annual advance royalty payment of $50,000 payable commencing as of June 18, 2016, now becomes a semi-annual advance royalty payment of $50,000 payable commencing as of December 18, 2015. All frac sand produced, sold and paid from the nine Manigotagan leases is subject to a $1.00 per tonne production royalty payable quarterly and all other products are subject to a $0.50 per tonne production royalty. Although the royalty is solely payable on production from the Manigotagan leases, the agreement also provides for a minimum production royalty from both the Manigotagan and the adjacent Seymourville Property held by Claim Post, based on their relative remaining mining reserves of frac sand. Claim Post can acquire one-half of Gossan's production royalty interest for $1.5 million at any time after making all of the required property payments.
Claim Post anticipates developing the Seymourville Deposit as a source of frac sand for use as a proppant in hydraulic fracturing in the oil and gas industry.
On April 29, 2014, Claim Post announced an independent NI 43-101 Technical Report and Resource Estimate on the Seymourville Frac project, prepared by P & E Mining Consultants Inc. ("P&E"). In P&E's opinion, the drilling and assaying of the Seymourville project supporting this resource estimate are sufficient to indicate reasonable potential for economic extraction and thus qualify it as a Mineral Resource under CIM definition standards. The mineral resources were classified as Inferred based on existing drill hole spacing and estimated at 25,959,000 tonnes at a raw grade of: 94.31% SiO2; 1.94% Al2O3; and 0.91% Fe2O3. Washed sand upgrades to plus 99% Si02 and meets all API specifications for Tier 1 frac sand. The Report is filed on SEDAR and should be referred to for details.
On November 24, 2014, Claim Post announced the results of a NI 43-101 Preliminary Economic Study (PEA) on the Seymourville Frac Sand Project conducted by P & E Mining Consultants Inc. ("P&E"). The PEA examined a proposed quarrying operation with a trans-loading truck to rail facility in Winnipeg. The operation would initially have an annual capacity of 500,000 tonnes that would be expanded to 1 million tons per year during the second year of operations. The quarrying operation outlined utilizes bulldozers and excavators without any blasting. The sand will be delivered to the wash plant by a slurry pump system during a 6-month summer quarrying season. The on-site dry plant will operate 300 days per year.
The PEA utilizes a base case price for Tier 1 frac sand of C $110 per tonne FOB Winnipeg. The proposed mine life based on the initial NI 43 101 resource on 20% of the project area is 18 years. The PEA estimated initial Capex for the project at C $93 million including working capital. The base case provided a 4.4 year payback and an after-tax IRR of 21%. The PEA is filed on SEDAR and should be referred to for details.
Charles Gryba, President of Claim Post Resources stated: "Our target date for going into production is June 2018 which at that time oil prices should be back over the $80 per barrel. Claim Post is currently focusing three milestones (1) social responsibility completing the Memorandum of Understanding (MOU's) with local communities (2) completing the mine permitting process (3) continue to de-risk the project plus minimize the cash burn rate. We continue to believe strongly in the Project; it is a high-quality Tier 1 deposit, our PEA shows we are in the low quartile of mining costs and we have a $40 freight advantage to Bakken and Western Canadian basins. Our next drill program should indicate a minimum 40 year life to the project."
Charles Gryba P.Eng is the Company Qualified Person for this press release.
Claim Post Resources Inc. is a Canadian based mineral exploration company and a reporting issuer in Ontario, Alberta and British Columbia. The Company is focused on becoming a leading provider of premium white silica sand proppant to oil operations the Williston Basin (both the Canadian and U.S. sides of the Border), and natural gas operations in the Montney and Horn River basins along the Alberta - British Columbia border from its Seymourville Frac Sand Project, located northeast of Winnipeg, Manitoba. Claim Post also has mineral claims in the Timmins area for gold and base metal exploration. There are 123,083,908 common shares of the Company currently issued and outstanding.
Statements in this release that are forward-looking reflect the Company's current views and expectations with respect to its performance, business, and future events. Such statements are subject to various risks and assumptions, some, but not necessarily all, are disclosed elsewhere in the Company's periodic filings with Canadian securities regulators. Such statements and information contained herein represent management's best judgment as of the date hereof based on the information currently available; however actual results and events may vary significantly. The Company does not assume the obligation to update any forward-looking statement.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contact
Claim Post Resources Inc.
Charles Gryba
President and Director
416-801-6366
Claim Post Resources Inc.
Peter Gryba
Corporate Affairs
416-203-3776
www.claimpostresources.com