TORONTO, ON / ACCESSWIRE / August 21, 2017 /Sarissa Resources Inc. (OTC PINK: SRSR) ("Sarissa" or the "Company") is pleased to provide the following update to its shareholders on the business activities related to the renewed development of its Nio-Star Corp. (Nio-Star) subsidiary's Nemegosenda specialty metals (niobium) project located near Chapleau, Ontario, Canada.
Corporate and Capital Raising Update
Nio-Star has closed on the financing previously announced in its news release of June 29, 2017, by concluding definitive agreements with RP Capital Group Inc. (RP Capital). Pursuant to those agreements, RP Capital has agreed to provide Nio-Star with a loan of up to C$250,000, some of those funds having already been advanced. The funds so provided are pursuant to a loan that is convertible into a 35% equity stake in Nio-Star. This convertible loan is also secured by a first lien on Nio-Stars assets, including the Nemegosenda patented properties owned by Nio-Star. The loan bears interest at 12% per annum (with interest waived if the loan is converted) and is convertible into common shares as described at the option of the lender. Also pursuant to the definitive agreements, Ronald A. Potts, the principal of RP Capital, is joining the Board of Directors of Nio-Star Corp. (to be appointed Chairman) and RP Capital has the right to appoint one additional nominee to the Board of Directors of Nio-Star, with Sarissa having the right to appoint the two other members to a Board of Directors for Nio-Star that would then have four directors.
Pursuant to the definitive agreements, under certain enumerated conditions, Nio-Star has the right to force RP Capital to elect to convert his loan into equity of Nio-Star or to have the loan repaid with interest. The definitive agreements also provide that Sarissa's and RP Capital's shares of Nio-Star are subject to rights of first refusal, tag-along rights, drag-along rights, and other customary restrictions on transfer. In addition, Nio-Star has agreed that in certain circumstances where there is an event of default under the loan, in addition to customary default rights RP Capital would be entitled to convert its loan so as to receive 51% of the issued and outstanding shares of Nio-Star. The definitive agreements also contain other terms and conditions that would be customary for a loan of this nature.
Concurrently with the loan, RP Capital has begun providing Nio-Star and Sarissa with investment banking advice, capital markets advice, other strategic, assistance with executive recruiting, and other legal and business advisory services. The parties have also begun working together to raise capital for Nio-Star, having agreed that up to C$25,000,000 could have to be raised over time as the exploration and development of the Nemegosenda project advances.
Legal Matters Update
Nio-Star has retained the Toronto based law firm of Crawley MacKewn Brush LLP, a firm which specializes in securities litigation. To date, a defense has been filed on behalf of the Nio-Star subsidiary against lawsuits filed by former management, members of their families and related companies. In addition, Nio-Star has initiated a court action with claims against former management and associated parties, including Andrew Drew Currah, Lucas Currah, Penny Currah, Benedetto Fuschino, Larry Salo, Scott Keevil, and Sabine Frisch, as well as companies related to the above individuals including Northern Rock Works LTD, Chapleau Birch Holdings LTD, 1777370 Ontario Inc., 2254022 Ontario LTD, Midnight Capital Corp., Fire Lake Resources Inc. For further details of these lawsuits please click here. Additionally, the Company has retained the US law firm Faegre Baker Daniels LLP to investigate additional US-based claims against the above-mentioned parties for additional damages on behalf of Sarissa and its shareholders. The Company is confident that it will prevail on both the defense and counter claims and the additional forthcoming actions.
The Company also plans to provide evidence to various government agencies in both Canada and the United States in regards to details relating to these suits.
The Company is also providing shareholders with an update with respect to the civil matter involving Company President, Dan Byrnes, regarding an investment of funds into Sarissa stock under Mr. Byrnes discretion as a Trustee. Recently, a judgment was entered against Mr. Byrnes in this matter. This matter was a personal issue for Mr. Byrnes and does not relate to any Company business or his role as an officer and director.
Geological and Metallurgy Update
The capital already provided by RP Capital is funding several initiatives that were begun over the past several months. The main objective of these initiatives was to review the portfolio of previous work completed on the project in past years, and also provide an indication as to whether the project has potential merit and additional capital should, therefore, be allocated for the next phase of investigations. We consider this due diligence a success as it provided our advisory board, geology and metallurgy teams the confidence to move on to the next phase of the project, wherein we will undertake the necessary project work that is necessary to ultimately engage in the completion of a preliminary economic assessment on the Nemegosenda project within the next 12 months. The design and budgeting of this next phase are currently underway and the work is expected to kick off in October.
The highlights of this recent work include:
- 1. Nio-Star has been working under the direction of Advisory Board Member Don Hains and other metallurgy expert consultants on some initial metallurgy studies with SGS Canada Inc., labs in Lakefield Ontario. Nio-Star was able to utilize core samples already provided to SGS for this work program. It is expected that the Company will have the initial results of these metallurgy studies in the coming weeks. In order to obtain more representative samples from the SE zone of the Nemegosenda property, the Company has engaged a drilling company to provide specialized drilling in the SE zone. That drilling is currently scheduled to begin in early September, once the necessary approvals and permitting process has been completed.
- 2. Nio-Star has completed a geological and geophysical evaluation of the project under the direction of its QP geologist Patrick Chance M.Sc., P.Eng., and exploration geophysicist Scott Hogg P.Eng.
- 3. Historic drilling immediately east of Nemegosenda Lake in the 1950s outlined two niobium bearing zones, designated D and SE both associated with complex magnetic anomalies. At that time, a historic resource was reported in the D Zone area where drilling had been focused. Subsequently, extensive trenching and sampling and reassessment of core from the SE Zone area suggests that there are two non-contiguous areas of mineralization. Additional infill drilling is required to assess the extent and grade of the SE zone. The mineralization described above lies on patented properties owned by Nio-Star.
- 4. The current study also reviewed historic (circa 1955) ground magnetic data, regional airborne magnetic data acquired by the Ontario Geological Survey (2000), as well as modern ground data from assessment files. 3D modeling of the airborne data suggests that the D Zone lies adjacent to a distinct magnetic feature that may also be present in the SE Zone area.
Mr. Chance is presently designing and cost estimating a work program that is directed towards compiling and validating the historic data, confirming the extent and grade of mineralized intervals by twining of certain drill holes, completing a highresolutionhelicopterborne gradiometer survey and other tasks required for completion of an NI 43101compliant resource estimate in the D and SE Zones.
For further information please see the current technical report of the project available here and on SEDAR.
The Company is also working with RPA Inc. to complete an "Order of Magnitude Report" during the month of September, which will provide an independent overview of the metallurgy and geology work completed this summer.
Patrick Chance M.Sc., P.Eng., is a qualified person within the meaning of National Instrument 43-101 and has read and is responsible for the Geology technical information contained in this news release
Don Hains, P. Geo. is a qualified person within the meaning of National Instrument 43-101 and has read and is responsible for the Metallurgy technical information contained in this news release
About Sarissa Resources Inc.
Sarissa Resources Inc. is a mining development company with interests in properties in Northern Ontario, Canada. Sarissa and Nio-Star are specifically focused on the development of the Nemegosenda niobium project.
For further information, contact:
Sarissa Resources Inc.
Certain statements in this press release may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include projections of matters that affect revenue, operating expenses or net earnings; projections of growth; and assumptions relating to the foregoing. Such forward-looking statements are generally qualified by terms such as plans, anticipates, expects, believes or similar words of like kind. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or qualified. Future events and actual results could differ materially from those set forth in, contemplated by or underlying the forward-looking information. These factors are discussed in greater detail in the Company's business plan and filings with the OTC Markets.
SOURCE: Sarissa Resources Inc.
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