|August 16, 2011|
NMC Resource Enters into Option Agreement for the Acquisition of 100% of Boss Mountain Moly Mine in British Columbia
|August 16, 2011 -- NMC Resource Corporation (TSX-V: NRC) ("NMC") is pleased to announce that it has entered into an option agreement dated August 12, 2011 (the "Option Agreement") with Maclaren Forest Products Inc. ("Xstrata"), a wholly-owned subsidiary of Xstrata Canada Corporation, pursuant to which it has acquired an option (the "Option") to purchase a 100% interest in Boss Mountain Moly Mine (the "Property").|
The Option Agreement enables NMC to enhance shareholder value by advancing its new exploration mandate in Canada. Boss Mountain Moly Mine is located approximately 10 kilometers west of Hendrix Lake, British Columbia within the Cariboo Mining District. It was operated intermittently by Noranda in the 1960's, 70's and 80's, mainly as an underground mine and produced molybdenum ("Mo") ore at average grades ranging from 0.189% Mo (0.315% MoS2) to 0.26% Mo (0.43% MoS2). It was closed in January 1983 due to low Mo price and has not been in operation since. The existing infrastructure includes road access and power lines. Certain permits are still in place.
When Noranda terminated its mining operation, a significant amount of Mo resource remained according to the old data. NMC plans to confirm this historical resource first and then drill further to expand the resource with a view to developing it into an open pit mine.
With this option agreement, NMC has achieved its first acquisition in North America and is in line with its strategy to implement a bi-lateral mandate of both production and exploration while diversifying its portfolio between Korean and Canadian projects.
Mr. Do Hyung Kim, Executive Vice President of NMC said, "It was during the global economic downturn in 2008 that we decided to fast-track the development of NMC Moland Mine, which is currently in production with profits. Today, we are very excited to add another moly project to our company to move on to the next stage of our corporate development. Our management is focused on continuing to grow strategically to enhance shareholder value."
Under the terms of the Option Agreement, Xstrata will grant to NMC an option (the "Option") to earn a 100% interest in Boss Mountain Moly Mine for a period of up to five years, subject to completing the following within three years:
(I) incurring expenditures in an aggregate amount of not less than CAD$3,000,000;
(II) delivering to Xstrata an internal or independent preliminary economic assessment; and
(III) conducting diamond drilling of no less than 10,000 meters.
Upon exercise of the Option and the completion of the title transfer of the Property to NMC, NMC will pay to Xstrata a royalty equal to 2% of net smelter returns and a payment of CAD$5,000,000, payable in five equal installments. The first installment will begin once a mine on the Property has commenced commercial production and the operating cashflows from such mine has exceeded the development cost.
Xstrata will retain the right to back-in (the "Back-in Right") of a 49% interest in the existing deposit on the Boss Mountain Property (the "Existing Deposit") for payment to NMC of an amount equal to two times (x2) the Existing Deposit back-in expenditures or the sum of two times (x2) the Existing Deposit back-in expenditures plus the Existing Deposit back-in expenditures minus $10,000,000.
Upon the exercise of the Back-in Right, a joint venture will form between NMC and Xstrata with respect to the Existing Deposit and the obligation of NMC to make the payment of CAD$5,000,000 will terminate. Further, any reference to the royalty to the Boss Mountain Property will be deemed thereafter to exclude the Existing Deposit property.
Xstrata will retain the right to back-in of a 51% interest in any new deposit (excluding the Existing Deposit and containing not less than 500,000 tonnes of copper equivalent) for payment of CAD$10,000,000. Upon the exercise of the New Deposit back-in right, a joint venture will form between NMC and Xstrata and any reference to the royalty to the Boss Mountain Property will be deemed thereafter to exclude the new deposit property.
NMC is listed on the TSX-Venture Exchange under the symbol (NRC). For more information, please contact Ethos Consulting Toll Free at (1-888-818-1365) or visit (www.nmcresource.com).
On behalf of the board of
NMC RESOURCE CORPORATION
Per: "Yoo Sup Han"
Yoo Sup Han; President & CEO
For further information, please contact DH (Do Hyung) Kim at:
Suite 500-666 Burrard Street
Vancouver, BC Canada V6C 3P6
Tel: (604) 643-1730
Fax: (604) 642-6192
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE.
Forward-Looking Statements: This news release includes certain forward-looking information and forward-looking statements (collectively "Forward-Looking Statements") concerning the future performance of the Company's business, operations and financial performance and condition, as well as management's objectives, strategies, beliefs and intentions. Specifically, this news release includes Forward-Looking Statements regarding that Xstrata will grant to NMC the Option to earn a 100% interest in the Boss Mountain Property during an option period of up to five years, the Option will be exercisable for a payment of CAD$5,000,000, payable in five equal installments, Xstrata will retain the right to back-in of a 49% interest in the Existing Deposit on the Boss Mountain Property for payment, a joint venture will form between NMC and Xstrata with respect to the Existing Deposit and the obligation of NMC to make the payment of CAD$5,000,000 will terminate, any reference to the royalty to the Boss Mountain Property will be deemed thereafter to exclude the Existing Deposit property, Xstrata will retain the right to back-in of a 51% interest in any new deposit (excluding the Existing Deposit and containing not less than 500,000 tonnes of copper equivalent) for payment of CAD$10,000,000, upon the exercise of the New Deposit back-in right, a joint venture will form between NMC and Xstrata and any reference to the royalty to the Boss Mountain Property will be deemed thereafter to exclude the new deposit property, by optioning Boss Mountain Property and NMC plans to confirm this historical resource first and then drill further to expand the resource with a view to developing it into an open pit mine and Forward-Looking Statements are frequently identified by such words as "may", "will", "plan", "expect", "anticipate", "estimate", "intend" and similar words referring to future events and results. Forward-Looking Statements are based on the current opinions and expectations of management. All Forward-Looking Statements are inherently uncertain and subject to a variety of risks and uncertainties, including the speculative nature of mineral exploration and development generally and specifically in respect of the interpretation of the geology, continuity, grade and size of mineral deposits, unanticipated operational or technical difficulties, fluctuating commodity prices, competitive risks and the availability of financing, changes in laws or regulations, changes in the financial markets and changes in general economic conditions, as described in more detail in our recent securities filings available at www.sedar.com. Such Forward-Looking Statements are based on a number of assumptions, including but not limited to the level and volatility of the price of molybdenum, the availability of financing, the accuracy of reserve and resource estimates and the assumptions on which those estimates are based and the ability to achieve and maintain certain operational efficiencies. Should one or more risks and uncertainties materialize or should any assumptions prove incorrect, then actual events or results may differ materially from those expressed or implied in the Forward Looking-Statements and we caution against placing undue reliance thereon. We assume no obligation to revise or update these Forward-Looking Statements, except as required by applicable law.
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