Vancouver, B.C., December 19, 2013 - BIG NORTH GRAPHITE CORP. (TSX-V: NRT)
(the "Company" or
"Big North"), announces that
the Company has entered into a letter of intent (the "LOI") with MAG Exploration Services Inc.
(the "Vendor") to acquire
all of the shares of Grafito de Mexico, S.A. de C.V. ("Grafito"), held by the Vendor (which
shares represent 97.5% of the issued and outstanding share capital
of Grafito)(the "Transaction"). Grafito is the registered
and beneficial owner of the El Tejon property, a past producing
flake graphite mine.
The El Tejon property is a 500
hectare property and consists of the El Tejon flake graphite mine
and mill (the "El Tejon
Property"). The El Tejon Property is located in the state of
Oaxaca, approx 38 kilometers Northwest of the City of Oaxaca, in
the town of San Francisco Telixtlahuaca.
The El Tejon Property is the only
flake graphite mine to have produced in Mexico. The mine and mill
were originally built in 1980 by the Government of Mexico. In 1989,
a second processing line was installed to increase the capacity to
approximately 4400 tonnes per year of finished graphite. El Tejon
was an open pit mine, and the mill was used to crush, mill, float, dry, screen and pack final product. The mine
was operated by the Government of Mexico until 1988 and was run
privately from 1988 until 2002. The mine closed in 2002, due to low
graphite prices. At the time of closing, approximately 80% of the
graphite produced was sold to the USA. Historically, the mine
produced approximately 20% large flake graphite and 80% medium and
fine flake graphite.
Company President Spiro Kletas
commented, "We are very excited to add this project to Big North's
portfolio of graphite assets. Our strategy has been to be among the
first to be able to supply graphite to the market. Not only does
the El Tejon Property represent near term production potential, but
also the ability for the Company to fast track our entry into the
flake graphite market. The project is in an area of good
infrastructure and access and has a readily available workforce in
the vicinity. As a past producer, many of the infrastructure needs
of a mining project have been previously addressed. Further, this
tends to limit cap ex required to begin production. We believe that
this project will be an excellent compliment to our current
amorphous graphite projects in Sonora State and, as they contain
different types of graphite, will supply different markets.
Further, the Company believes that there is significant expansion
potential for the mine and mill."
Pursuant to the terms of the LOI,
Big North will acquire 100% of the interests held by the Vendor in
the El Tejon Property by acquiring all of the issued and
outstanding shares held by the Vendor in Grafito by paying
US$1,700,000 and issuing 12,500,000 common shares to the Vendor as
follows:
-US$30,000 upon
signing the LOI as a non-refundable deposit;
-US$30,000 within 5
business days of signing the definitive agreement;
-US$90,000 upon the 6
month year anniversary of signing the definitive
agreement;
-US$100,000 upon the
12 month year anniversary of signing the definitive
agreement;
-US$100,000 upon the
18 month year anniversary of signing the definitive
agreement;
-US$125,000 upon the
24 month year anniversary of signing the definitive
agreement;
-US$125,000 upon the
30 month anniversary of signing the definitive
agreement;
-US$150,000 upon the
36 month year anniversary of signing the definitive
agreement;
-US$150,000 upon the
42 month year anniversary of signing the definitive
agreement;
-US$400,000 upon the
48 month year anniversary of signing the definitive
agreement;
-US$400,000 upon the
60 month year anniversary of signing the definitive
agreement;
-5,000,000 common
shares within 5 business days of TSX Venture Exchange
("TSXV") approval of the definitive agreement (the
"Effective
Date"); and
-7,500,000 Big North
Shares on the 12 month anniversary of signing of the definitive
agreement.
In addition, the Vendor will retain
a 3% net profits interest royalty with respect to the El Tejon
Property.
The Vendor and Big North are arm's
length parties as defined by the policies of the TSXV. A finder's
fee may be paid in connection with this Transaction up to the
maximum permitted by the policies of the TSXV.
The Transaction will constitute a
"reviewable transaction" pursuant to the policies of the TSXV and
is subject to a number of conditions and approvals, including, but
not limited to, satisfactory due diligence, settlement of a
definitive agreement, required corporate approvals and TSXV
approval, including the review by the TSXV of a title opinion and a
NI 43-101 compliant technical report for the El Tejon Property, as
applicable. There can be no assurance that the Transaction will be
completed as proposed or at all.
About Big North
Graphite Corp.
Big North is a
graphite development and exploration company focused on select
projects in Mexico and Canada. The Company recently acquired three
past producing amorphous graphite mines in Sonora, Mexico and is
working towards accelerating the restart of the Nuevo San Pedro
amorphous graphite mine. Big North is currently in the test mining
phase at Nuevo San Pedro.
Recently, Big North announced that
the Company had started the assembly of a processing plant that
will be used for crushing, screening, sizing and drying of graphite
to the specifications of future customers. Further, the Company has
commenced a strategy of buying unprocessed amorphous graphite from
local miners who do not possess the ability to process or ship to
end users. Big North also owns high priority, large flake graphite
exploration projects in Ontario and Quebec, Canada.
For further information please contact Spiro Kletas at
(604) 629-8220.
ON BEHALF OF THE BOARD
(signed)
"Spiro
Kletas"
Spiro
Kletas
President and Chief Executive
Officer
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Neither the TSX Venture Exchange nor
its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
The Company has not established
mineral resources and has not completed a valid mining study (as
defined by NI 43-101) to support its production decision at the
Nuevo San Pedro Mine. Historically, a production decision under
these circumstances results in much higher economic or technical
risk. Furthermore, without a pre-feasibility or feasibility study
and a graphite reserve, there can be no assurance that operations
at Nuevo San Pedro will be profitable.
Except for historical information
contained herein, this news release contains forward-looking
statements that involve risks and uncertainties. Actual results may
differ materially. Except as required pursuant to applicable
securities laws, the Company will not update these forward-looking
statements to reflect events or circumstances after the date
hereof. More detailed information about potential factors that
could affect financial results is included in the documents filed
from time to time with the Canadian securities regulatory
authorities by the Company.
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