Adrian negotiates for Geo Recursos

A letter of intent allows Adrian Resources (VSE) to buy the issued and outstanding shares (and shareholders’ loans) of Geo Recursos, a Panamanian company holding the Cerro Petaquilla concession in that country.

Adrian previously acquired an option to earn a 32% interest in the copper-gold project from Minnova (TSE) which, in turn, is earning 80% from Geo.

Upon closing the transaction, Adrian will have an indirect 20% interest in the project. Once the Minnova option is exercised, it can increase this to 52%. Minnova and Kerr Addison Mines (TSE) will each have 24%. On closing, Adrian must issue 4.1 million shares and pay US$1.2 million to the shareholders of Geo. A year from closing, a further US$1.2 million must be paid. However, Adrian can choose to issue a further one million shares rather than make this cash payment. The agreement also includes a non-transferable share purchase warrant allowing the vendors to buy up to 3.3 million Adrian shares at a price of $1.50 in the first year of the warrant term and $1.75 in the second.

The vendors will also have the right to be represented on Adrian’s board through a proposed voting trust agreement.

Adrian is exploring Petaquilla where a second-phase, $2-million program is nearly complete. The project has a preliminary reserve of 875.6 million tons grading 0.6% copper at a 0.3% copper cutoff grade. An additional 130 million tons have been identified through step-out drilling of the two main deposits, raising the total to more than one billion tons.