| ||May 12, 2008|
Commander Reaches Agreement with Xstrata Nickel to Accelerate Option Agreement on Baffin
| ||News Release: 08-12|
Commander Resources Ltd. (CMD-TSX Venture) reports that it has entered into an agreement with Xstrata Nickel ("Xstrata") that provides Commander the option to accelerate its full vesting rights to 100% in the Bravo Property ("Property"), part of the large Baffin Island Project.
This deal, along with a similar agreement on the adjacent Qimmiq Property (announced January 14, 2008), will allow Commander the option to gain full ownership of the entire Baffin Project this year.
Under the existing agreement with Xstrata, originally signed in 2003, Commander has the exclusive right to earn a 100% interest in the Property by spending $8 million by December 31, 2011. To date, Commander has spent about $2.1 million.
Under the new agreement, Commander may accelerate its ownership in the Property to 100% by making total cash payments of C$750,000 to Xstrata including $50,000 on signing, $75,000 on or before July 15, 2008, $200,000 on or before October 15, 2008 and $425,000 on or before December 31, 2008. The new agreement enables Commander to eliminate remaining earn-in expenditures and to extinguish Xstrata's back-in rights to non-gold resources, as provided under the existing agreement.
Xstrata shall have no rights to any gold, gold concentrates or gold products produced from the Property, but Xstrata will have the first right of refusal to purchase all or any portion of the concentrates or other such mineral products produced from any non-gold resource on the Property. For the first four (4) years of commercial production, Xstrata's right shall apply to 50% of the concentrates; the other 50% of concentrates shall be available for Commander to support or facilitate mine financing terms and other project capitalization and Xstrata shall retain a first right of refusal to match such financing terms.
Xstrata will retain the royalties provided under the original option agreement but under the amended agreement, 50% of the royalties may be purchased by Commander for $1 million at any time up to commencement of commercial production.
If Commander makes $125,000 of the total payments as agreed but does not complete the total payments to vest at 100%, the existing agreement and its expenditure schedule will remain in effect but Commander may carry over $400,000 in 2008 work commitments to add to the requirements for 2009. If Commander makes the total $750,000 in payments, the existing agreement will terminate and be replaced by the definitive agreement covering the terms of this new agreement.
On behalf of the Board of Directors,
Kenneth E. Leigh
President & CEO
For further information, please call:
Investor Relations: BMK Communications
Toll Free: 1-866-782-6032
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.
You can view the Next News Releases item: Tue May 13, 2008, Commander Leverages Its Base Metal Rights On Baffin Island
You can view the Previous News Releases item: Thu May 8, 2008, Commander Attracts a New Partner to the Olympic-Rob Property, Yukon Territory
You can return to the main News Releases page, or press the Back button on your browser.