Under the terms of the LOI, Otterburn can earn an 80% interest in the LK Project on payment of $10.5 million in cash and securities to Nortec and by expending $10 million in exploration work within 3 years of signing the Option Agreement (“OA”). The effective date (“Effective Date”) of the OA shall be within five business days after receipt of both CNSX and TSX Venture (collectively, the “Exchange”) acceptance (if necessary) of the OA, and in any event no later than August 30, 2011.
Otterburn can earn an initial 49% interest in the LK Project by: a) making payments totalling $4.5 million in cash to Nortec; b) issuing the equivalent of $2 million in shares of Otterburn; and, c) spending $5 million on exploration within 24 months, including a firm commitment to spend a minimum $2 million in the first 12 months. The payments of cash and securities will be carried out in 4 (four) instalments over 18 months effective on the date of signing and approval of the OA (“Option 1”).
Otterburn can earn the remaining 31% interest by: a) making a payment of $3 million in cash to Nortec on or before the 3 year anniversary of the signing of the OA; b) issuing the equivalent of $1 million in shares of Otterburn to Nortec; and, c) spending a further $5 million on exploration on the LK Project (“Option 2”).
