Publish Date : 31-Jul-2013
Cornerstone Metals Inc. ("Cornerstone" or the "Company") Further to its news releases of March 21st and May 14th 2013, it is pleased to announce that it has entered into the definitive agreement ("the Agreement") with Copper One Inc. to acquire all of the shares of Copper One's U.S. subsidiary, Copper One USA Inc. ("Copper One USA"), which holds 6 properties located in Southwest United States, with the principal property being Lone Mountain, New Mexico. The other properties are West Jerome; Teague Springs; West Safford and Twin Peaks in Arizona and Mimbres in New Mexico.
Under the terms of the Agreement, Copper One will receive 2,250,000 Cornerstone common shares on the closing date of the sale, plus the following additional consideration tied to specific properties:
Within 30 days of completing a feasibility study in respect of the Lone Mountain property, Cornerstone will (a) issue to Copper One 2,000,000 Cornerstone common shares; (b) pay to Copper One $1,000,000 in cash or shares at Copper One's option; and (c) grant to Copper One a 0.5% net smelter return royalty capped at $5,000,000, which may be repurchased by Cornerstone for $1,000,000 in cash or shares at Copper One's option at any time up until the earlier of eight years following the date of the Agreement and the date on which commercial production is achieved in respect of the Lone Mountain property.
Within 30 days of completing a feasibility study in respect of the West Jerome property, Cornerstone will: (a) issue to Copper One 500,000 Cornerstone common shares; (b) pay to Copper One $750,000 in cash or shares at Copper One's option; and (c) grant to Copper One a 0.5% net smelter return royalty capped at $4,000,000, which may be repurchased by Cornerstone for $800,000 in cash or shares at Copper One's option at any time up until the earlier of eight years following the date of the Agreement and the date on which commercial production is achieved in respect of the West Jerome property.
Within 30 days of completing a feasibility study in respect of any of the other properties, Cornerstone will: (a) issue to Copper One 350,000 Cornerstone common shares; (b) pay to Copper One $375,000 in cash or shares at Copper One's option; and (c) grant to Copper One a 0.5% net smelter return royalty capped at $3,000,000, which may be repurchased by Cornerstone for $350,000 in cash or shares at Copper One's option at any time up until the earlier of eight years following the date of the Agreement and the date on which commercial production is achieved in respect of such property.
750,000 of the 2,250,000 Cornerstone shares issued to Copper One on the closing date of the sale will be subject to a voluntary 12-month hold period.
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