Tentative Agreement to Sell Northland's Non-Ferrous Assets in Sweden
LUXEMBOURG, LUXEMBOURG -- (Marketwire) -- 10/27/10 -- Northland Resources S.A. (TSX: NAU)(OSLO: NAUR)(FRANKFURT: NBS) - ('Northland' or 'the Company') is pleased to announce that it has signed a Letter of Intent ('LOI') to sell the Company's non-ferrous projects in Sweden to Orex Minerals Inc. ('Orex'). The total consideration is valued at a minimum of USD 15.5 million, and includes a mix of upfront cash and shares, as well as deferred cash and share payments, guaranteed investments and a 2% Net Smelter Royalty ('NSR').
Mr. Karl-Axel Waplan, President and CEO of Northland, commented, 'The signed LOI for the sale of the non-ferrous projects in Sweden, including the Barsele Gold Project, is in line with the Company's strategy to focus on iron ore and dispose of non-core assets. The Board of Directors believes that the inherent value of the Swedish non-ferrous projects will be better developed by a team that can focus its resources and technical expertise on advancing these projects towards mining operations.'
Northland will receive a total of USD 5 million in cash over two years, and USD 3.5 million worth of Orex shares to be issued over a period of four years from signing of the Final Agreement. Orex has also guaranteed that a minimum USD 3 million will be spent on the non-ferrous projects in the first two years. Finally, Northland will retain a 2% NSR, which can be purchased at any time by Orex for USD 4 million in cash. Northland will also have the right to appoint a Director to the Board of Orex.
Orex is a silver and gold exploration company with projects in Mexico. It is listed on the TSX Venture Exchange under the trading symbol REX. The Orex management team has a proven track record in exploration and company development, most recently with the TSX Venture Exchange-listed company Orko Silver Corp.
Final details, conditions and approvals are expected to be completed over the next few months, with closing expected on or about January 26, 2011. A further announcement will be made upon closing. Pareto Securities AS has acted as financial advisor with respect to this transaction.
ON BEHALF OF THE BOARD
'Karl-Axel Waplan'
President and CEO, Northland Resources S.A.
For more information please visit our website at: www.northland.eu
Contacts:
Northland Resources S.A.
Karl-Axel Waplan
President & CEO
+46 705 104 239
Northland Resources S.A.
Anders Hvide
Executive Chairman
+47 92 88 98 58
Northland Resources S.A.
Eva Kaijser
CFO
+46 709 32 09 01
Northland Resources S.A.
Marguerite Manshreck-Head
Investor Relations
Canada: +1 647 224 7882
www.northland.eu