Nuinsco sells district property

Nuinsco Resources Limited announced last month it has reached a definitive agreement to sell its Rainy River District property to Collingwood Capital Corp., a TSX Venture Exchange company.
The sale agreement replaces the letter agreement between Nuinsco and 608457 B.C. respecting the purchase and sale of the Rainy River property, which agreement was assigned by 608457 B.C. to Collingwood Capital Corp.
Nuinsco will receive total cash payments of $2.5 million, of which $750,000 has been paid by 608457 B.C. to Nuinsco to date.
Collingwood will pay to Nuinsco the balance of $1.75 million in seven equal quarterly instalments of $250,000 each. The first payment is due June 15.
Nuinsco will receive a bonus of $2.5 million on commencement of commercial production or direct shipment of ore from the property.
Collingwood also will pay to Nuinsco a quarterly royalty of $1 per ton of ore produced from the property, subject to an annual Consumer Price Index adjustment.
In addition to the cash portion of the purchase price, Collingwood will issue to Nuinsco on closing a total of 549,345 common shares of Collingwood, at a deemed price of $1 per share, calculated on a subdivided basis.
If Collingwood proposes to issue any additional securities in order to finance the continued development of the Rainy River property, Nuinsco shall have the pre-emptive right to participate in such financing, to a maximum of seven percent thereof for a term of five years.
In addition, if Collingwood completes an equity financing within 30 days following closing, Nuinsco will be entitled to receive additional shares of Collingwood equal to seven percent of that financing.
As security for payment of the purchase price, Collingwood will grant to Nuinsco a first mortgage and general security interest over the interest it acquires in the Rainy River property and all related assets.
“We are pleased to complete the sale of the Rainy River property because Nuinsco shareholders are receiving value for an inactive asset, and the sale agreement allows for a further revenue stream with continued development of the property,” said CEO and director Warren Holmes.
“Nuinsco is implementing a property rationalization plan aimed at maximizing the value of its property holdings, and providing a focus on the exploration and development of its uranium, nickel, and copper properties,” he added.

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