TORONTO, ONTARIO -- (Marketwire) -- 12/06/10 -- Duncan Park Holdings Corporation (TSX VENTURE: DPH) (the "Company" or "Duncan Park") announces that 17 patented mining claims and 11 licences of occupation (the "Claims") covering approximately 324 hectares are being added to the Red Lake Dome property. The addition of this important block of claims, which are to the east of the north-western predominately water based claims and north of the south-eastern predominately land based claims, adds approximately 65% to the size of the property and squares up and fills in that section of the property.
The basis of this addition to the property is that Sphere Resources Inc. ("Sphere") announced earlier today that it has entered into a binding letter agreement (the "Letter Agreement") with Camp McMan Red Lake Gold Mines Inc. ("Camp McMan") pursuant to which the parties will enter into an option agreement (the "Option Agreement") under which Sphere may earn a 100% interest in the Claims, subject to a Net Smelter Returns ("NSR") interest to Camp McMan, by the payment of annual payments, the issue of Sphere shares and incurring minimum annual exploration costs, as set out below.
By virtue of the existing option agreement (the "Option Agreement") between Sphere and Duncan Park, these properties lie within an area of interest, which makes them subject to that agreement and obligates Duncan Park to pay Sphere 24% of its acquisition costs. (See Press Release dated March 9, 2010.) However, it is contemplated that Duncan Park and Sphere will enter into a supplementary agreement similar to the existing Option Agreement, pursuant to which Duncan Park will fund the earn-in costs and earn all of Sphere's rights to the Claims, subject to Sphere's right to claw back a 51% interest in the property by the payment to Duncan Park of four times the expenditures made by Duncan Park. The other 25% of the project would be owned by Global Minerals Inc. ("Global") under the area of interest clause of the option agreement between Global and Sphere, effective November 18, 2009. The Letter Agreement contemplates that, in certain circumstances, Duncan Park may assume Sphere's rights and obligations under the proposed option agreement between Sphere and Camp McMan.
It should be noted that no such supplementary agreement has been reached by Duncan Park and Sphere as of this time and there can be no assurance that one will be entered into by the parties.
Sphere's financial and share issue obligations pursuant to its letter
agreement with Camp McMan are:
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Date Option Share Exploration
Payment Issue Costs
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On signing letter agreement $ 10,000 Nil Nil
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On signing option agreement $ 25,000 300,000 Nil
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On or before December 15, 2011 $ 50,000 400,000 $ 100,000
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On or before December 15, 2012 $ 50,000 500,000 $ 200,000
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On or before December 15, 2013 $ 75,000 500,000 $ 350,000
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On or before December 15, 2014 Nil Nil $ 550,000
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Total $ 210,000 1,700,000 $ 1,200,000
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In addition, Sphere is obligated to make the tax payments on the Claims. Sphere is committed to the option payments, share issuances and exploration costs for the first year.
Upon making the required option and tax payments, share issuances and incurring the exploration costs, Sphere will have earned a 100% interest in the Claims, including the residue of surface rights with respect thereto, subject only to a 31/2% NSR interest on all metals produced from the Claims to Camp McMan. Sphere also has the right to buy down the NSR interest from 31/2% to 2% for $500,000 per 1/2%. Upon Sphere earning its interest in the Claims, Sphere is obligated to make annual advance royalty payments of $10,000 until either it exercises this option or a decision is made to enter production.
The proposed transaction remains subject to, among other things, completion of satisfactory due diligence, the entering into definitive agreements, as required, and receipt of all requisite regulatory and other approvals, including stock exchange approvals.
"The addition of this group of claims fills out the Company's water claims to the west, and the land claims immediately below, where the Company has identified two prospective targets for drilling in the months ahead. The Company is contemplating a further flow-through share offering to finance the planned exploration," says Ian McAvity, Acting President and Chief Executive Officer of Duncan Park.
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, information with respect to the addition of the Claims to the Red Lake Property, any related agreement involving Duncan Park and the Company's future plans. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate", or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information is based on the opinions and estimates of management at the date the information is made, and is based on a number of assumptions and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Duncan Park to be materially different from those expressed or implied by such forward-looking information, including risks related to option and joint venture arrangements, such as entering into a definitive agreement, receipt of all requisite regulatory and other approvals, completion of satisfactory due diligence, the Company's ability to obtain necessary financing and as well as risks associated with the exploration, development and mining industry such as economic factors, future commodity prices, market conditions, changes in foreign exchange and interest rates, government regulation, environmental risks, permitting timelines, capital expenditures, operating or technical difficulties in connection with exploration and development activities, availability of skilled labour and equipment, the speculative nature of gold exploration and development, including the risks of diminishing quantities of grades of reserves, contests over title to properties, and changes in project parameters as plans continue to be refined as well as those risk factors discussed in Duncan Park's management's discussion and analysis for the period ended August 31, 2010, available on www.sedar.com. Although Duncan Park has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Duncan Park does not undertake to update any forward-looking information contained herein, except in accordance with applicable securities laws.
Neither TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange Inc.) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Duncan Park Holdings Corporation
Ian McAvity
Acting President & CEO
(416) 203-0860
