Virginia Mines Inc. (TSX:VGQ) has purchased 3,617,085 units of this private placement for net proceeds to Terrax of $723,417. Should TerraX conduct a subsequent private placement of units before May 17, 2013, Virginia has agreed to purchase such number of additional units as to allow it to maintain a holding of 9.9% of the issued and outstanding common shares of TerraX, up to a maximum aggregate amount of $800,000. The net proceeds of this private placement will be used to fund the upcoming 2013 exploration program on TerraX's wholly-owned Northbelt gold property in the Northwest Territories, 15 km from Yellowknife.
TerraX also advises that it has entered into a definitive royalty option agreement with Virginia, whereby Virginia has been granted an option to acquire a 2% net smelter returns royalty on the Northbelt property (see our news release of April 4, 2013). Virginia may exercise the option by payment of $2,000,000 within 3 months following commencement of production. In consideration of granting the option, TerraX received 20,000 common shares of Virginia at a deemed price of $10.00 per share for aggregate consideration of $200,000.
Joe Campbell, P. Geo, President of Terrax, states, "Terrax is very pleased to close the first tranche of this private placement which was completed during a difficult time in global equity and metal markets, and the junior mining sector in particular, and provides sufficient funding for our 2013 exploration programs at Northbelt, including drilling on multiple previously recognized gold bearing targets."
The Northbelt gold property consists of 121 mineral leases totaling 8,802 acres (3,562 hectares) and covers approximately 13 km of strike along the prolific Yellowknife belt, 15 km north of the city of Yellowknife. The southern part of the property is accessible by road, and the remainder is accessible by all-terrain vehicles. Northbelt is situated on the northern strike continuation of the Yellowknife gold camp, immediately west of the major break controlling gold mineralization within the camp. This spatial location is host to all known gold deposits in the Yellowknife camp, including the past-producing 7.6 Moz Giant and the 5.5 Moz Con mines. The property is host to multiple shears that are the recognized hosts for gold deposits in the Yellowknife camp and it contains innumerable gold showings.
On behalf of the Board of Directors
Contact: Paradox Public Relations
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