ASX ANNOUNCEMENT 31 OCTOBER 2016
FINAL CONDITION OF PURCHASE AGREEMENT MET BY AURION
Dragon Mining Limited (ASX:DRA) ('Dragon Mining" or "the Company") is pleased to advise that Aurion Resources Limited (TSX-V:AU) ("Aurion") has satisfied the final condition of the Definitive Purchase Agreement ("Agreement") for the acquisition of the Kutuvuoma and Silasselkä Projects ("Projects") in northern Finland, with the expenditure of €1 million in direct exploration. The Company will now arrange to transfer its 100% legal and beneficial interest in the Project tenements to Aurion's Finnish subsidiary, in accordance with the Agreement.
Dragon Mining will retain a 3% Net Smelter Royalty ("NSR") on any deposit mined by Aurion or any associated third party within the Projects and the defined Areas of Interest. Aurion or its nominee may purchase the full 3% NSR at any time on or before the sixth anniversary of the signing of the Agreement on 23 May 2014, with a one off payment of €4 million in cash or 1 percentage point of the NSR any time after the tenth anniversary of the signing of the agreement with a one off payment of €4 million in cash on the basis that Dragon Mining has not sold the NSR to a third party. Dragon Mining is at liberty to sell the NSR to a third party at any time after the sixth anniversary of the signing of the Agreement.
Aurion will also make bonus payments to Dragon Mining of €2 million in cash or equivalent in Aurion Common Shares (share price based on a five day volume weighted average price ("VWAP") immediately before the agreed settlement date) at Aurion's discretion for the defining of one million ounces of gold equivalent material within the Projects and the defined Area of Interests that is categorised as Measured and Indicated in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves ("JORC Code") or National Instrument 43-101 Standards for Disclosure for Mineral Projects ("NI43-101"). Further bonus payments of €1 million in cash or equivalent in Aurion Common Shares at Aurion's discretion will be made for the defining of every additional one million ounces of gold equivalent material within the Projects and the defined Area of Interests that is categorised as Measured and Indicated in accordance with the JORC Code or NI43-101.
For and on behalf of Dragon Mining Limited