Shoreham agreement for Guyana properties

2009-11-10 16:16 ET - Property Agreement

The TSX Venture Exchange has accepted for filing documentation pertaining to an option agreement dated March 5, 2009, and a subsequent definitive letter agreement dated Aug. 15, 2009, between Shoreham Resources Ltd. and Guiana Shield Resources Inc. Pursuant to the agreement, the company shall have the right to earn a 100-per-cent interest in four project packages, consisting of an aggregate of 13 prospecting licences and 12 prospecting permits in Guyana, currently owned by the optionor.

As consideration, the company must pay the optionor an aggregate of $700,000 (U.S.) and issue five million shares over a six-year period. Upon receipt of one or more mining licences within a package, the company will issue the optionor an additional one million shares per package (a total potential issuance of an additional four million shares for all packages) and additional cash payment of $1.00 (U.S.) for each ounce of gold contained in the combined categories of resources as set out in the feasibility study.

The optionor holds the right to receive a royalty of 3 per cent of the net smelter returns (NSR) from all future production from these lands. The company has the option to purchase one-third of the NSR (reducing the NSR to 2 per cent) for a payment of $1-million (U.S.), an additional payment of $2-million (U.S.) to reduce the NSR to 1 per cent and an additional payment of $3-million (U.S.) to further reduce the NSR to zero. In the event that the company sells or assigns part of its interest in the packages to a third party, the company will pay the optionor 10 per cent of any compensation that the third party pays for the packages, which is payable in cash or shares at the option of the company and will be subject to further exchange approval should shares be issued.

For further information, please refer to the company's press releases dated April 6, 2009, and May 28, 2009.