VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 03/14/13 -- North Arrow Minerals Inc. (TSX VENTURE: NAR) ("North Arrow" or the "Company") is pleased to announce it intends to complete a $3,000,000 non-brokered private placement and has entered into an assignment agreement with 0954506 B.C. Ltd. ("BCCo") under which BCCo has agreed to assign and transfer to North Arrow all of BCCo's interest and obligations in certain option agreements with Stornoway Diamond Corporation. Stornoway has granted three distinct and separate options to BCCo to acquire an 80% interest in each of the Qilalugaq, Pikoo and Timiskaming diamond projects located in Canada. Stornoway is the holder of a 100% interest in all three projects. BCCo is a private company controlled by Eira M. Thomas. Ms. Thomas is the daughter of D. Grenville Thomas, President, CEO and a director of North Arrow.
Upon closing of the assignment, North Arrow will have options to earn an 80% interest in each of the Qilalugaq, Pikoo and Timiskaming diamond properties by completing exploration work programs (each an "option work program") on each of the projects. If North Arrow completes an option work program and provides notice to Stornoway of its intent to vest an 80% interest in a project, Stornoway will have a one-time right (the "Back-in Right") to buy-back a 20% interest in the project by paying to North Arrow an amount equal to three times the costs incurred in connection with the applicable option work program. Upon earn-in by North Arrow in a project, North Arrow and Stornoway will form a joint venture for the purpose of further exploration of the project, and the interests would be 80% North Arrow and 20% Stornoway, unless Stornoway exercises the Back-In Right, in which case the interest would 60% North Arrow and 40% Stornoway.
Mr. Thomas stated, "The acquisition of these options to earn an interest in the Qilalugaq, Pikoo and Timiskaming diamond projects, combined with North Arrow's Lac de Gras diamond project currently under option to Harry Winston Diamond Corporation, positions North Arrow as a diamond-focused exploration company. North Arrow has the management and technical expertise and the financial capacity to evaluate and advance this pipeline of early to more advanced-stage diamond properties. Upon closing the financing announced today, North Arrow plans to initiate exploration programs on the Timiskaming and Pikoo projects and will continue to evaluate and acquire additional high quality diamond exploration opportunities."
Qilalugaq diamond project (Nunavut)
The 7,143 hectare Qilalugaq diamond project is located near the community of Repulse Bay, Nunavut. The property was originally staked by BHP Billiton Diamonds Inc. and subsequently optioned by Stornoway in 2006. Stornoway acquired a 100% interest in the project in 2010. The project is subject to a 3% net smelter returns royalty on metals produced and a 3% gross-overriding royalty on the sale of industrial minerals, including diamonds. A total of eight kimberlite pipes (Q1-4, A34, A42, A59, A76, A94, A97 and A152) have been identified within the Qilalugaq diamond project as well as a number of laterally extensive kimberlite dyke systems.
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