North Arrow Minerals Inc. (TSXV-NAR) ("North Arrow" or the "Company") is pleased to provide an update on the corporate affairs of the Company including the following highlights:
The various arrangements announced today are intended to allow North Arrow shareholders to benefit from: i) increased exposure and leverage to the Lac de Gras diamond project where, under the terms of an existing option agreement, Harry Winston Diamonds Inc. will fund up to $5 million exploring over 300,000 acres within the Lac de Gras diamond field; ii) a stronger board of directors; and iii) a clean balance sheet resulting from the proposed financing and loan conversion. Upon closing of these transactions, North Arrow will have sufficient working capital to evaluate new exploration opportunities over the next eighteen to twenty-four months while benefiting from third party funding of exploration activities at the Lac de Gras, Contwoyto (funded by Elgin Mining Inc. -- please see news release dated July 9, 2012), and Hope Bay (funded by Sennen Resources) projects.
Acquisition of Springbok's Lac de Gras Interests
North Arrow has entered an agreement with Springbok Holdings Inc. under which North Arrow will acquire Springbok's 50% interest in the LDG/GT mining leases and the JT1 and JT2 mineral claims (the "LDG/GT Property"), located in the Northwest Territories (the "Springbok Interests"). The Springbok Interests include the right to obtain a 22.5% interest in the Lac de Gras Joint Venture Property, subject to the terms and conditions of an option agreement among Springbok, North Arrow and Harry Winston Diamonds Inc. (please see North Arrow news release dated September 6, 2011 for details on the underlying arrangement with Harry Winston). The Joint Venture Property consists of the 81,500 acre LDG/GT Property as well as 226,000 acres controlled by Harry Winston. As a result of this transaction, North Arrow will retain a 100% interest in the LDG/GT property including the right to obtain a 45% interest in the Lac de Gras Joint Venture Property. Under the terms of the agreement with Springbok, North Arrow has agreed to purchase the Springbok Interests for 10,000,000 common shares of North Arrow at a value of 5 cents per common share. As additional consideration, in the event: i) Harry Winston exercises its option and earns a 55% interest in the Joint Venture Property (and North Arrow thereby obtains a 45% interest in the Joint Venture Property); and ii) North Arrow subsequently incurs $2 million in joint venture expenditures on the Joint Venture Property, North Arrow will issue to Springbok that number of common shares of North Arrow having a value of $1 million. The agreement with Springbok is subject to certain terms and conditions, including the approval of the TSX Venture Exchange.
Board of Directors
North Arrow is also pleased to report that Dr. Chris Jennings has been appointed to the board of directors of the Company, increasing the number of directors to five. Dr. Jennings is a principal of Springbok Holdings and will be an independent member of the board. Dr. Jennings brings to the board extensive experience in diamond, gold and base metal exploration and development throughout the world. Dr. Jennings was a Founder of SouthernEra Diamonds Inc., served as a consultant to Aber Resources and has held positions with numerous companies including International Corona Corp., BP Minerals (Canada) and Falconbridge Ltd.
Private Placement Financing
North Arrow also reports that it intends to complete a non-brokered private placement of up to twelve million units at a price of 5 cents per unit for total gross proceeds of $600,000. Each unit will comprise one common share and one common share purchase warrant. Each warrant will entitle the holder to acquire an additional common share of North Arrow at a price of 10 cents for 24 months immediately following the closing date. Proceeds from the private placement will be used to finance exploration on the Company's projects in Canada and for working capital purposes. It is anticipated that insiders of the Company will participate in the private placement, on the same terms and conditions as arm's length subscribers. The Company may pay commissions and finders' fees in connection with the financing.
This private placement and any finder's fees are subject to certain conditions, including receipt by North Arrow of all necessary regulatory approvals, including the approval of the TSX Venture Exchange, and a hold period of four months for all issued securities. Closing of this private placement is expected to occur on or around November 30, 2012, subject to receipt of all required regulatory approvals.
In conjunction with the non-brokered private placement, North Arrow has also entered a debt settlement agreement with Anglo Celtic Exploration Inc. Under the terms of the agreement, North Arrow and Anglo Celtic have agreed to settle an outstanding debt in the amount of $1 million plus unpaid interest accrued thereon, as outlined in a loan agreement dated August 31, 2011 and as evidenced by a convertible promissory note. The debt will be settled by North Arrow issuing to Anglo Celtic 21,639,100 common shares at a price of 5 cents per share. Anglo Celtic is a private company controlled by D. Grenville Thomas, who is President, CEO and a director of North Arrow. The debt settlement agreement and settlement of the loan for shares is subject to receipt of the approval of the TSX Venture Exchange. If the settlement of the loan is approved, Mr. Thomas, through Anglo-Celtic, will become a "Control Person" (as defined in the TSX Venture Exchange's policies) of North Arrow. The creation of a new Control Person requires disinterested shareholder approval, which North Arrow will seek from shareholders at the next Annual General Meeting.
North Arrow also reports that it has notified Strongbow Exploration Inc. that it will not proceed with the option to earn an interest in Strongbow's Snowbird nickel project as announced in a North Arrow news release dated August 3rd, 2012.
North Arrow is a well-established junior exploration company with a diverse portfolio of gold, diamond and base metal projects throughout the Canadian north. These projects are explored by North Arrow and its various joint venture partners and the Company continues to evaluate new exploration opportunities through ongoing generative and project evaluation initiatives. Information on the North Arrow's projects and strategy can be found at www.northarrowminerals.com.
North Arrow Minerals Inc.
/s/ "D. Grenville Thomas"
Chairman and CEO
For further information, please contact:
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