Tournigan Signs Option Agreement on Kremnica Gold Property
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Vancouver, June 8, 2009 -- Tournigan Energy Ltd. (TVC:TSX-V; TGP:Frankfurt) is pleased to announce that it has signed a definitive option agreement with Ortac Resources plc of London, England, whereby Ortac may acquire in four stages up to a 100% interest in Tournigan's Kremnica Gold project in Slovakia, a non-core asset of Tournigan. Tournigan's focus is now solely on the development of its prospective uranium properties in Slovakia, notably the Kuriskova uranium project.
Strategic Benefits of the Option Agreement
The option agreement allows Tournigan to allocate its financial and management resources entirely on developing its core uranium properties in Slovakia.
The overhead savings from divesting of the operatorship of the Kremnica Gold project are estimated at approximately Cdn $40,000 per month.
Management can more aggressively pursue its primary objective of developing the company's flagship Kuriskova uranium project through the pre-feasibility and feasibility stages.
Tournigan is now effectively a uranium pure-play company.
The option agreement structure will allow Tournigan shareholders to continue to participate in the upside of potential future production at Kremnica while committing minimal financial or management resources.
Option Agreement Summary
The option agreement grants Ortac the sole and exclusive right and option to acquire in four stages up to an undivided 100% right, title and interest in and to the Kremnica Gold project (20% in the first stage, 10% in the second stage, 30% in the third stage and 40% in the fourth stage). The earn-in terms for the four option stages are as follows:
First Option Stage: Ortac may acquire a 20% interest by completing at its sole cost an NI 43-101 compliant resource estimate and preliminary assessment on or before June 1, 2011.
Second Option Stage: Upon completion of the First Option Stage, Ortac may acquire an additional 10% interest by delivering an extension notice and payment of US$500,000, payable in cash or publicly traded shares of Ortac, to Tournigan.
Third Option Stage: Upon completion of the Second Option Stage, Ortac may acquire an additional 30% interest by completing at its sole cost an NI 43-101 bankable feasibility study on or before June 1, 2013.
Fourth Option Stage: Upon completion of the Third Option Stage, Ortac may acquire the remaining 40% interest in the Kremnica Gold project for the following consideration:
A payment to Tournigan of $15.00 per ounce of 100% of the gold equivalent (gold plus silver) resource defined as proven and probable reserve in the bankable feasibility study, payable in cash or publicly traded shares of Ortac (this payment will be net of the US$500,000 payment described in the Second Option Stage unless this stage is completed by June 1, 2011 in which case the US$500,000 will be deducted from that payment); and
Granting to Tournigan a 2% net smelter royalty (NSR) on gold and silver production from the Kremnica Gold project (such NSR may be reduced to 1% by paying Tournigan US$1 million in cash at any time prior to the commencement of commercial production at Kremnica. The remaining 1% NSR which Tournigan retains will be payable in respect of 1 million gold ounces equivalent, after which time it will be reduced to a 0.5% NSR in respect of a further 1 million gold ounces equivalent, after which time Tournigan's NSR will be terminated).
Following completion of the First Option Stage, Ortac and Tournigan will form a joint-venture with participating interests reflecting the earn-in at each option stage. If Ortac decides not to proceed with the next option stage, then the participating interests in the joint-venture will remain fixed at the preceding earned-in amounts.
Ortac will take over operatorship of the Kremnica Gold project during the term of the option agreement and will maintain the underlying properties and mining licenses in good standing.
Dorian L. (Dusty) Nicol, President and CEO of Tournigan, will be appointed to the Board of Directors of Ortac.
The option agreement is still subject to approval by the TSX Venture Exchange.
About Tournigan
Tournigan is a uranium exploration and development company that has built a portfolio of highly prospective assets in Slovakia. The Company has focused its development and obtained licences in Slovakia, a member of the European Union since 2004. Slovakia is economically and politically stable, has excellent infrastructure and, as of January 1, 2009, has adopted the Euro currency. Tournigan is committed to safe and sustainable exploration and mine development in Slovakia.
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