Xmet to expedite acquisition of 100% interest in Duquesne-Ottoman Project (853,000 ounces Au and growing)
TORONTO, ONTARIO–(Marketwire – March 3, 2012) – Xmet Inc. ("Xmet" or the "Company") (TSX VENTURE:XME)(OTCQX:XMTTF) is pleased to announce that it has signed a New Option Agreement with Globex Mining Enterprises Inc. and Geoconseil Jack Stoch Ltee which allows the Company to now acquire a 100% interest in the Duquesne-Ottoman rather than the 75% provided for in the current option agreement. The New Option Agreement sets out two ways Xmet can acquire 100% of the Duquesne-Ottoman Project.
- A cash payment of $6.5 million payable within six months of signing of the New Option Agreement to immediately acquire a 75% interest plus the additional option to acquire the final 25%, good for a period of 4 years, at a price of $2.5m in the first year, $2.6m in the second year, $2.7m in the third year and $2.8m in the fourth year.
- A cash payment of $9 million payable within six months of signing of the New Option Agreement.
In both cases, Globex and Geoconseil will retain its existing sliding scale Gross Metal Royalty of between 2.5% to 3.5% of all metals produced from the properties. Should Xmet not exercise and complete either of the above new options available to it, the existing option agreement will remain in place.
Other positive features resulting from exercising the New Option include:
- Xmet's previous obligation to carry out an additional approximately $6 million in work obligations over the next four years is eliminated;
- Xmet's carrying costs of 5% per annum on $6m in previously deferred payments are eliminated; and
- Xmet's right to acquire the final 25% of the Project at a fixed price for a period of 4 years is established.
"After nearly two years of efficient and successful Gold discovery on the Duquesne-Ottoman Project, led by Xmet`s President & COO Charles Beaudry, management saw the need to accelerate our option payments and acquire the right to the final 25% interest in order to create a clear path to 100% ownership of Duquesne-Ottoman as soon as possible. Xmet's technical achievements on the Project have not translated into increased stock value. This New Option Agreement is designed to remedy this situation and align Xmet`s valuation with our peer group who 'own' their gold. We are confident that this new option agreement will create an immediate path to ownership that should give us improved multiples on our per ounce resource that translates into increased shareholder value," says Xmet's Chairman and CEO Alexander Stewart.
The Duquesne Ottoman project currently has an NI 43-101 compliant Inferred Resource of inferred resource of 4,171,000 tonnes at an average grade 5.2 g/t Au (6.36 g/t Au uncut) hosting 727,000 ounces Au cut (853,000 uncut ounces Au), prepared by Watts, Griffis, McOuat Ltd. (See Xmet news release October 25, 2011). Additionally Xmet has completed 9,000 metres of its fully funded 13,000 metre Phase Two diamond drilling program on Duquesne-Ottoman, which aims to expand the resource beyond the current compliant amount.
Xmet management is very pleased with the terms set out under the New Option Agreement and would like to thank the management of Globex Mining Enterprises Inc. and Geoconseil Jack Stoch Ltee for their support in our mutual goal of moving the Duquesne-Ottoman project towards a Gold producing success story.
About Xmet Inc.
Xmet is a gold exploration company focused on advanced projects in existing mining camps in Canada where exploration and mining costs are minimized and where previous and historic producing mines make for much easier permitting and minimizes community and First Nations social community risks. Xmet's flagship project, the Duquesne-Ottoman property, which covers an area of 928.6 hectares, is located approximately 30 kilometres north of the city of Rouyn-Noranda and 10 kilometres east of the village of Duparquet within the townships of Duparquet and Destor in the Province of Quebec.
For the latest updates, news releases and events, please visit us at www.xmet.ca and follow Xmet Inc. on Facebook and Twitter.
Neither 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. Mr. Charles Beaudry, P.Geo., Xmet's President, COO and Director, is the designated Qualified Person responsible for this release.