Big North Enters into Letter of Intent to Acquire Three Past-Producing Graphite Mines in Sonora Mexico
Vancouver, B.C., September 10, 2012 -- BIG NORTH GRAPHITE CORP. (TSX-V: NRT) (the "Company" or "Big North"), announced today that the Company has entered into a letter of intent (the "LOI") with Can-Am Gold Corp. (the "Vendor") to acquire all of the issued and outstanding shares of Grafito La Barranca SA de CV ("Grafito"), held by the Vendor (which shares represent 99.9% of the issued and outstanding share capital of Grafito)(the "Transaction"). Grafito is the registered and beneficial owner of two mining concessions located in Sonora, Mexico.
Grafito holds a 100% interest in the Aki Wiki concession ("Aki Wiki") and has a 50/50 joint venture on the Nuevo San Pedro property ("Nuevo San Pedro", and together with Aki Wiki, the "Property"), a past producing amorphous graphite mine which is currently being re-opened. Both concessions are located in the San Jose de Moradillas region, a region that has produced graphite for more than 145 years. San Jose de Moradillas is located approximately 45 kilometers southwest of the city of Hermosillo, Mexico.
Aki Wiki consists of approximately 145 hectares. There are two past producing mines on the property, La Fortuna and Caraples. Aki Wiki is located approximately 1.5 kilometers south of the historic El Cochi graphite mine, where there was a town of more than 600 workers living there at that time. The peak of graphite production for the region occurred in 1996, when the region produced and shipped approximately 58,000 tons.
Nuevo San Pedro is an approximately 11 hectare property located north of Aki Wiki and near the town of La Colorada. The La Lourdes graphite mine, which has been in operation for approximately 50 years, is located less than 1 kilometer to the north. Nuevo San Pedro is a past producing mine, which shut down due to low graphite prices. The mine is currently being re-opened.
Pursuant to the terms of the LOI, Big North will acquire 100% of the interests held by the Vendor in the Property by acquiring all of the issued and outstanding shares held by the Vendor in Grafito by making the following payments and issuing the following common shares to the Vendor:
- US$25,000 upon signing the LOI as a non-refundable deposit;
- US$75,000 within 5 days of TSX Venture Exchange ("TSXV") acceptance of the definitive agreement for the Transaction (the "Effective Date");
- US$100,000 upon the first year anniversary of the Effective Date, or upon completion of a minimum $1,500,000 equity financing of Big North, whichever occurs earlier;
- 1,200,000 common shares in the capital of Big North ("Big North Shares") within 5 days of the Effective Date;
- 500,000 Big North Shares on or before the 6 month anniversary of the Effective Date; and
- 500,000 Big North Shares on or before the 12 month anniversary of the Effective Date.
The Vendor and Big North are arm's length parties as defined by the policies of the TSX Venture Exchange (the "TSXV"). A finder's fee may be paid in connection with this Transaction up to the maximum permitted by the policies of the TSXV.
The Transaction is subject to a number of conditions and approvals, including, but not limited to, satisfactory due diligence, settlement of a definitive agreement, required corporate approvals and TSXV approval. There can be no assurance that the Transaction will be completed as proposed or at all.
For further information please contact Spiro Kletas at (604) 629-8220.
ON BEHALF OF THE BOARD
President and Chief Executive Officer
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.
Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially. Except as required pursuant to applicable securities laws, the Company will not update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by the Company.