TerraX Minerals Inc. (TSX-V: TXR; Frankfurt: TXO) and Alberta Star Development Corp. (TSX-V: ASX; OTC BB: ASXSF; Frankfurt: QLD) have completed the previously announced private placement whereby Alberta Star has acquired 1,300,000 units of TerraX at $0.45 per Unit for gross proceeds of $585,000 (the “Private Placement”). Each Unit consists of one common share and one-half of one share purchase warrant, with each full warrant entitling the holder to purchase an additional common share at an exercise price of $0.57 per share until February 28, 2016. No finder’s fees were paid in connection with this placement. All securities issued in connection with the placement are subject to a hold period expiring on July 1, 2014
In addition, TerraX and Alberta Star are pleased to announce that they have entered into, and received approval from the TSX Venture Exchange for, a definitive option agreement (the “Option Agreement”) pursuant to which Alberta Star may earn a 60% interest in TerraX’s wholly-owned Central Canada gold project (the “Central Canada Property”) in Ontario (the “Option”). In order to exercise the Option, Alberta Star must make cash payments to TerraX totaling $85,000 over a three year period, with $10,000 paid upon execution of the Option Agreement, $25,000 due on the second anniversary of the execution of the Option Agreement and a further $50,000 due on the third anniversary date. Alberta Star must also incur an aggregate of $500,000 in exploration expenditures over a three year period, with $100,000 to be incurred by March 31, 2015, a further $150,000 to be incurred by March 31, 2016 and the remaining $250,000 to be incurred by March 31, 2017. Alberta Star will also be responsible for payment of the annual pre-production royalty of $10,000 to the original vendors of the Central Canada Property due annually in December beginning with the next payment due on December 11, 2014.
The net proceeds of the Private Placement will be used by TerraX to finance additional drilling planned for Terrax’s wholly-owned Northbelt property, which encompasses 3,562 hectares on the prolific Yellowknife belt, 15 km north of the city of Yellowknife, and covers 13 km of strike on the northern extension of the geology that contained the Giant (7.6 Moz) and Con (5.5 Moz) gold mines. The Northbelt property is host to multiple shears that are the recognized hosts for gold deposits in the Yellowknife camp and it contains innumerable gold showings.
Mr. Stuart Rogers, a director and the Chief Financial Officer of TerraX, is also a director and the President and Chief Executive Officer of Alberta Star. Mr. Rogers beneficially owns or controls 855,000 common shares and 447,500 securities convertible into common shares of TerraX, representing 2.00% of the outstanding common shares of TerraX on a non-diluted basis and 3.06% of the outstanding common shares of TerraX on a diluted basis. Mr. Rogers beneficially owns or controls 339,000 common shares and 300,000 securities convertible into common shares of Alberta Star, representing 1.57% of the outstanding common shares of Alberta Star on a non-diluted basis and 2.95% of the outstanding common shares of Alberta Star on a diluted basis. TerraX does not own any securities of Alberta Star and Alberta Star does not presently own any securities of TerraX. After completion of the Private Placement, Alberta Star owns 3.04% of the outstanding common shares of TerraX on a non-diluted basis and 4.56% of the outstanding common shares of TerraX on a diluted basis. Mr. Rogers has declared his interest in, and abstained from voting in respect of, the Option and the Private Placement on behalf of TerraX and Alberta Star. The directors of each of TerraX and Alberta Star have considered the merits of the Option and the Private Placement in the absence of Mr. Rogers. The Option and Private Placement are exempt from the formal valuation and minority approval requirements of Multilateral Instrument 61-101 pursuant to sections 5.5(b) and 5.7(1).