HLM Enters Definitive Agreement with Coventry Resources for the Sale of the West Cedartree Gold Project
SUDBURY, Ontario--(BUSINESS WIRE)-- Houston Lake Mining Inc. (TSX.V: HLM) ("HLM"), today announced that it has signed a definitive agreement to sell with selling 100% interest in its 1,675 hectare West Cedartree Gold Project to Coventry Resources Limited (TSX.V: CYY, ASX: CYY) ("Coventry") who owns the Cameron Gold deposit, located 12km away, as well as their Rainy River Project located 80km away. Under terms of the agreement, HLM will receive total consideration currently valued at approximately $1.22 million, allocated as follows (all currency amounts in Canadian dollars, unless otherwise indicated):
- $100,000 in cash, on execution of the binding Heads of Agreement (completed);
- $400,000 in cash, on execution of a Definitive Sale and Purchase Agreement (the "Agreement"),
- 1.935 million Coventry shares, representing 2.8% of the outstanding shares of Coventry, (on execution of the Agreement) with a current value of approximately $716,000. Coventry shares closed on the TSX.V at CAD$.37 on January 11, 2013); and,
- A 2.5% net smelter return ("NSR") royalty on the West Cedartree Claim Block, representing 20% of the West Cedartree Gold Project's total area, including the newly discovered Robertson Prospect. The NSR will not have a buy-back clause, however should HLM seek to sell the royalty, Coventry will maintain the first right of refusal.
"HLM is very pleased to have taken a significant step with such an aggressive, capable and well respected exploration company as Coventry and believe that they have the desire and expertise to advance their project to the benefit of both companies, and the West Cedartree Gold Project," said Henry J. Kloepper, CEO of HLM. "Coventry's significant Cameron Gold deposit, coupled with their strong financing capabilities provide the opportunity for HLM shareholders to capture value with cash and liquid assets in order to focus on our Pakeagama Rare Metals Project in Northwestern Ontario; to retire some outstanding debt; and to continue to participate in the upside of their Cameron Gold and Rainy River Projects."
About Houston Lake Mining Inc.
HLM is a mining exploration company that is actively exploring for the rare metals lithium, cesium, tantalum, and rubidium by currently focusing on its 100% owned and optioned Pakeagama Rare Metals Project in northwestern Ontario, Canada. HLM has a total of 63,019,056 common shares issued and outstanding. For additional information, please visit www.houstonlakemining.com.
Neither the 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. This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company's registered filings what are available at www.sedar.com.
Houston Lake Mining Inc.
Henry J. Kloepper, +001 705.897.7622
fax: +001 705.897.7618
KEYWORDS: North America Canada
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