Sudbury, Ontario (September 9th, 2010) Northern Superior Resources Inc. (“Northern Superior” or the “Company”) is pleased to announce that it has signed a formal option agreement (the “Option Agreement”) with Rainy River Resources Ltd. (“Rainy River”) in respect of claims forming a part of the Big Dam and TPK areas of Northern Superior’s Ti-pa-haa-kaa-ning gold property, northwestern Ontario (the “Project”).
Following the terms set out in a letter agreement signed by the parties in June 2010 (see press release June 28th, 2010), Rainy River has the option to earn a 51% interest in the Project by meeting the following obligations:
- spending an aggregate of $9.4 million in exploration expenditures on the Project over three years, broken down as follows: $1.4 million in the first year; $4 million in the second year; and $4 million in the third year. Rainy River has the right to accelerate the rate and time at which it incurs expenditures. Northern Superior is committed to spending $1.6 million in expenditures on the Project by the end of 2010;
- paying $300,000 to Northern Superior upon regulatory acceptance of the Option Agreement;
- paying $1.3 million to Northern Superior by January 5th, 2011; and
- subscribing for three private placements of Northern Superior shares for gross proceeds of $500,000 in each of the three years of the option earn-in period. The first such private placement was closed concurrently with the signing of the Option Agreement (please see below for details). In years two and three of the Option Agreement, the price per common share will be equal to the volume weighted average of Northern Superior’s shares for 20 days prior to the anniversary of the effective date of the Option Agreement in each year.
During the remainder of 2010, Overburden Drilling Management Limited (“ODM”) will act as project manager on a mutually accepted exploration program that will be decided and implemented by ODM with assistance from Northern Superior’s geologists.
Northern Superior has granted Rainy River a right of first refusal with respect to Northern Superior’s interest in the eastern half of the Ti-paa-haa-kaa-ning gold (“TPK”) property and its 100% interest in the western half of the TPK area (known as the “New Growth Area”) should Northern Superior receive an acceptable bona fide arms’ length third party offer to purchase the New Growth Area.
Dr. T.F. Morris, President and CEO states: “This is an exciting development in the progress of the TPK property. Rainy River not only brings the capital necessary to drive this project to success, but also has proven success in discovery of significant gold mineralization using data and exploration techniques similar to those of Northern Superior.”
The area covered by this Option Agreement focuses on the Big Dam and TPK areas of Northern Superior’s 100% owned TPK gold property in northwestern Ontario. An exceptional, regionally extensive gold grain-in-till dispersal apron has been defined on this area of the property.
Northern Superior and Rainy River currently have a reverse circulation rig in operation on the Project. This phase of drilling should be completed by September 14th, 2010.
The Company is also pleased to announce that, pursuant to the terms of the Option Agreement, on September 9, 2010, it closed the first of three private placements with Rainy River for 2,500,000 common shares of the Company at a price of $0.20 per share for proceeds of $500,000.
Pursuant to a right granted to Lake Shore Gold Corp. (“Lake Shore Gold”) in May of this year (in connection with the acquisition of Northern Superior’s interest in the Ti-pa-haa-kaa-ning gold property), Lake Shore Gold elected to participate in the private placement by subscribing for its pro rata entitlement. Lake Shore Gold acquired 625,000 common shares of the Company at a price of $0.20 per share for proceeds of $125,000.
The share price for the private placements was determined at the time of signing of the letter agreement in respect of the Option Agreement in June, 2010. At that time, Northern Superior’s shares were trading at $0.12 (TSX-V, SUP).
A total of 3,125,000 common shares of the Company were issued pursuant to the private placements for aggregate gross proceeds of $625,000. All common shares issued in connection with the private placement are subject to a hold period under applicable securities laws, which hold period expires on January 10, 2011.
Dr. T.F. Morris, President and CEO states: “We are very pleased and grateful to receive these private placements from Rainy River and Lake Shore Gold. To receive such support from two extremely successful gold exploration and mining companies is tremendously encouraging and reinforces the quality and potential of Northern Superior Resources Inc. and its gold exploration projects.”
Both the private placements and the Option Agreement have been conditionally approved by the TSX Venture Exchange.
About Northern Superior
Northern Superior Resources Inc. is a junior exploration company focused on exploring for gold in the Superior geological province of the Canadian Shield. The Company currently has three high active, high quality gold exploration projects in Ontario and Quebec- TPK, Thorne Lake and Wachigabau (see Company web site, www.superior.com). These projects, and other early stage gold exploration projects (Rapson Bay, Meston Lake, Lespinay, Lac Surprise, Hazeur, Chibougamou River and Lemark Creek), were all developed from the Company’s extensive geoscientific data base.
Northern Superior is a reporting issuer in British Columbia, Alberta, Ontario and Quebec, and trades on the TSX Venture Exchange under the symbol SUP. For further information contact:
Thomas F. Morris
President and CEO
Tel: (705) 525 ‐0992
Fax: (705) 525 ‐7701
This press release may include statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. The Company cautions that actual performance will be affected by a number of factors, many of which are beyond its control. Future events and results may vary substantially from what the Company currently foresees. Discussion of the various factors that may affect future results is contained in the Company’s recent filings, available on SEDAR.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.