HLM Enters Definitive Agreement with Coventry Resources for the sale of the West Cedartree Gold Project
Sudbury, Ontario – January 15, 2013 – Houston Lake Mining Inc. (TSX.V: HLM) (“HLM”), today announced that it has signed a definitive agreement to sell with selling 100% interest in its 1,675 hectare West Cedartree Gold Project to Coventry Resources Limited (TSX.V: CYY, ASX: CYY) (“Coventry”) who owns the Cameron Gold deposit, located 12km away, as well as their Rainy River Project located 80km away. Under terms of the agreement, HLM will receive total consideration currently valued at approximately $1.22 million, allocated as follows (all currency amounts in Canadian dollars, unless otherwise indicated):
- $100,000 in cash, on execution of the binding Heads of Agreement (completed);
- $400,000 in cash, on execution of a Definitive Sale and Purchase Agreement (the “Agreement”),
- 1.935 million Coventry shares, representing 2.8% of the outstanding shares of Coventry, (on execution of the Agreement) with a current value of approximately $716,000. Coventry shares closed on the TSX.V at CAD$.37 on January 11, 2013); and,
- A 2.5% net smelter return (“NSR”) royalty on the West Cedartree Claim Block, representing 20% of the West Cedartree Gold Project’s total area, including the newly discovered Robertson Prospect. The NSR will not have a buy-back clause, however should HLM seek to sell the royalty, Coventry will maintain the first right of refusal.
“HLM is very pleased to have taken a significant step with such an aggressive, capable and well respected exploration company as Coventry and believe that they have the desire and expertise to advance their project to the benefit of both companies, and the West Cedartree Gold Project” said Henry J. Kloepper, CEO of HLM. “Coventry’s significant Cameron Gold deposit, coupled with their strong financing capabilities provide the opportunity for HLM shareholders to capture value with cash and liquid assets in order to focus on our Pakeagama Rare Metals Project in Northwestern Ontario; to retire some outstanding debt; and to continue to participate in the upside of their Cameron Gold and Rainy River Projects.”