Millstream Signs Letter of Intent to Sell 49% Interest in the Tamarack Gold Property to Nirek Resources Inc.
April 01, 2008 at 09:00 AM EDT
TORONTO, ONTARIO--(Marketwire - April 1, 2008) - Ernest Harrison, Chairman of Millstream Mines Ltd. (TSX VENTURE:MLM)(FRANFURT:NJD), is pleased to announce that Millstream has entered into an agreement in principle with Nirek Resources Inc. pursuant to which Nirek is granted an option to purchase a 49% undivided working interest in the Tamarack Gold property.
Under the Letter of Intent ("LOI") to exercise its option and purchase the 49%, Nirek must deliver to Millstream a US$2,300,000 cash payment, issue one million (1,000,000) Nirek common shares bearing a 12-month trading restriction, and purchase four million (4,000,000) Millstream flow-through shares priced at $1.00 per share with a 12-month trading restriction or in lieu of cash, in the absolute sole discretion of Millstream 4,000,000 Nirek common shares deemed to be valued at CDN$1.00 equivalent per share.
The LOI contemplates that upon Nirek's completion of its purchase, the parties will form a single purpose joint venture to develop and exploit the Tamarack Gold property. Millstream will remain as the Operator/Manager of the property. Nirek will have the right to draw upon 100% of the net gold recovered up to an amount of 10,000 gold ounces, with Nirek being indebted to Millstream for 51% of such amount of gold drawn. Additionally, Millstream will assign to Nirek, in trust, a further 26% interest in the property for a period of either nine (9) months or when 2,500 gold ounces are recovered; upon whichever first occurs, such 26% interest shall revert back to Millstream. The agreement is subject to completion of mutually acceptable binding legal agreements and maybe subject to regulatory approvals or exemptions, and financing by Nirek.
Millstream's management perceives this arrangement as allowing the Tamarack Gold property to be developed expeditiously moving it to the next level while giving the stakeholders the opportunity to realize the full potential of the property.
About Millstream Mines Ltd.:
Millstream Mines Ltd. is a Canadian-based mineral exploration company whose principle objective is to enhance and develop known mineral properties to production potential. The Company has active projects in the Province of Ontario, Canada and in the State of Montana, USA. The company's main focus continues to be the 100% owned Potter Mine Property. This past producing property is host to copper-zinc-cobalt "stacked" mineralized zones located in the highly prolific Abitibi Greenstone Belt and more specifically in the Kidd-Munro Assemblage near the town of Matheson in north eastern Ontario. It is the company's ambition to fulfill drilling requirements necessary to estimate a NI 43-101 compliant resource.
March 31, '08 Close: $0.185
63,051,707 SHARES ISSUEDThe TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. Millstream seeks safe harbour with regard to forward looking statements.