VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 24, 2011) - West Melville Iron Company Ltd. (the "Company"), a private company led by Mr. John Robins and Mr. Bruce Counts of Discovery Group, is pleased to announce that it has entered into Joint Venture with Roche Bay plc (the Vendor) to acquire up to 70% interest in and to the West Melville Iron Ore Project (was previously called Fraser Bay 1-3 by Roche Bay plc) located on West Melville, Nunavut.
"We believe that the global market for iron ore will continue to be robust, and the West Melville Iron Ore Project represents a tremendous opportunity to enter the market with a promising early-stage property," said John Robins, PGeo.
The Company entered into an agreement with the Vendor pursuant to which the Company may earn and acquire a 70% interest in the West Melville Iron Ore Project. Some of the key details of the agreement include the following earn-in thresholds:
- 30% interest for min. of 1,200 meters of drilling by Sept. 2012;
- 60% interest for min. of 10,000 meters and PEA by Dec. 2014;
- 70% interest for completing a Feasibility Study on the property;
- Roche Bay carried to completion of Feasibility Study.
West Melville Iron Company Ltd. will manage the property. Roche Bay plc will receive 10% ownership of West Melville Iron Company Ltd. once stage 1 is complete, and will retain a 0.5% Gross Overriding Royalty on the project. Should West Melville Iron Company Ltd. receive an offer for the project at a $100 million or greater valuation, it can require Roche Bay plc to sell its stake in the property on the same terms as the offer.
ON BEHALF OF WEST MELVILLE IRON COMPANY LTD.
Bruce Counts, President
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