Kootenay Resources Announces Sale of the Two Times Fred Property

Executive Summary

• Kootenay Resources Inc. sold its 100% interest in the Two Times Fred Property to Evolution Mining Ltd.’s subsidiary for CAD $1,000,000 cash plus a 2.0% net smelter returns (NSR) royalty.
• A concurrent NSR agreement grants Kootenay the 2.0% royalty; Evolution holds an option to purchase half of this royalty for CAD $3,000,000 before commercial production begins.
• If the buy‑down option is exercised, Kootenay will extinguish a pre‑existing 2% underlying NSR, leaving a 1.0% NSR payable to Kootenay; if not, Kootenay may acquire the underlying NSR or receive payments from Evolution under that royalty.

Key Details

• Purchase Price: CAD $1,000,000 cash paid to Kootenay at closing.
• Royalty Granted: 2.0% net smelter returns (NSR) on the Two Times Fred Property transferred to Kootenay.
• Buy‑Down Option: Evolution may purchase 50% of the Kootenay NSR for CAD $3,000,000 prior to commercial production.
• Post‑Option Structure:
• If exercised – Kootenay will acquire and extinguish an existing third‑party 2% underlying NSR, resulting in a net 1.0% NSR payable to Kootenay.
• If not exercised – Kootenay may elect to acquire the underlying NSR, or Evolution must continue paying under that royalty, reducing payments due to Kootenay under its own NSR.
• Relationship: Evolution is at arm’s length from Kootenay.
• Regulatory Disclaimer: TSX Venture Exchange and its Regulation Services Provider do not accept responsibility for the adequacy or accuracy of this release.

Notable Quotes

(No executive quotes were provided in the release.)