GEOMEGA AND NIOGOLD AMEND OPTION AGREEMENT FOR THE MONTVIEL AND PUMP LAKE PROPERTIES
For immediate distribution
MONTREAL, May 5, 2011 – GEOMEGA RESOURCES INC. (« GéoMégA ») and NioGold Mining Corporation (« NOX ») are pleased to jointly announce that they have entered into an amending agreement with respect to the Montviel and Pump Lake Option Agreement (see GéoMégA’s news release dated November 11, 2010).
Under the amendment, GéoMégA will immediately acquire a 100% interest in the Montviel Property by issuing 1,525,000 common shares to NOX, and NOX will retain a 2% Net Output Return royalty on the Montviel Property with no buyback right for GéoMégA. In addition, GéoMégA will, upon securing 70% of the capital requirements for commercial production specified in the feasibility study (as that terms is defined in National Instrument 43-101) for the Montviel Property, pay $4,500,000 to NOX in cash or common shares at the election of NOX, which amount shall be treated as non-refundable advanced royalty payment.
GéoMégA will continue to have an option to acquire up to a 100% interest in the Pump Lake Property. In order to exercise the option for an initial 75% interest, GéoMégA shall incur an aggregate of $400,000 in exploration expenditures in stages on or before September 30, 2014. Upon completion of these expenditures, the GéoMégA will have the option to either abandon the property or form a joint venture with NOX. Upon formation of the joint venture, GéoMégA will have an option to acquire the remaining 25% of the Pump Lake Property, exercisable by written notice given on or before August 31, 2017, and by (i) paying $7,500,000 to NOX in cash or common shares (the election on one-half of such amount to be made by each party), (ii) granting to NOX a 1% Net Output Return royalty on the Pump Lake Property, of which GéoMégA may buy back one-half (0.5%) for $500,000; and (iii) reimbursing NOX for its contributions to the joint venture, together with a non-cumulative 20% premium, payable in cash or common shares at the election of NOX.
All these transactions are subject to the approval of the TSX Venture.
GéoMégA is a Quebec based mineral exploration company focused on the discovery and development of economic REE deposits. GéoMégA’s exploration properties are located in the Abitibi and Upper Laurentian regions of Quebec.
Currently, GéoMégA has 17,985,976 common shares outstanding and $2.4M in cash.
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.
For more information contact:
Simon Britt, CA
President and CEO