VANCOUVER, April 4, 2013 /PRNewswire/ - TerraX Minerals Inc. (TSX-V: TXR; Frankfurt: TXO) has agreed to grant an option to Virginia Mines Inc. (TSX: VGQ) to purchase a 2% NSR on its Northbelt Property in Yellowknife, NWT, Canada. To purchase this Royalty Option Agreement Virginia will pay TerraX $200,000, payment made by the issuance of 20,000 common shares of Virginia at a deemed price of $10.00 per share. These shares will be subject to a 4-month regulatory hold period. The option will entitle Virginia to purchase a 2% net smelter return on production within the Northbelt property by payment of $2,000,000 within 3 months following commencement of production.
In addition Virginia will purchase through a non-brokered private placement 4,000,000 common shares of TerraX at a price of $0.20 per share for gross proceeds of $800,000. The private placement will include ½ warrant per share and each warrant will entitle Virginia to one common share at an exercise price of $0.30 per share for a period of 36 months.
Finally, TerraX will concurrently raise up to an additional $1,200,000, on terms substantially similar to the Virginia Units, through a non-brokered private placement to bring the total funding raised up to $2,000,000. The proceeds of these placements will be earmarked for exploration over the next year on the Northbelt Property.
The Royalty Option Agreement and the private placements are subject to TerraX and Virginia obtaining regulatory approvals from the TSX Venture Exchange and the TSX respectively and execution of a final royalty agreement and private placement subscription agreements.Joe Campbell, president of TerraX states, "TerraX is very pleased to be the first investment by Virginia in a junior mining company outside of Quebec, and we take this as a vote of confidence not only in the high potential of the Northbelt Property, but also in the technical team underpinning TerraX's exploration efforts." On behalf of the Board of Directors