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Snowfield Development Corp. (the "Company") is pleased to announce that it has executed a Letter of Intent agreement between the Company and Mr. Robert Carroll ("Carroll") of Yellowknife, N.W.T. whereby the Company can earn a 100% joint venture interest in the Wire Mineral Claim (the "Claim"). The Claim, Tag No. F68107, is located in the South Mining District of the Northwest Territories, covering approximately 413.2 acres and is in close proximity to the Mud Lake kimberlite currently held under option by the Company.
The terms of the joint venture agreement are as follows:
1. The full price and consideration payable to Carroll by the Company for granting the Company the option to earn a 100% undivided working interest in and to the Claim will be cash payments by the Company of a cumulative total of $30,000; the issuance of 250,000 fully paid and non-assessable shares of the Company's capital stock, freely marketable through the facilities of the TSX Venture Exchange (the "Exchange") (upon expiration of the Exchange's prescribed hold period restricting resale of shares for a four-month period); and the expenditure of a cumulative total of $250,000 on programs of exploration on the Claim under a three-stage Option as follows:
The First Stage
To earn an 25% interest in the Claim, the Company shall:
a) pay $5,000 to Carroll within five (5) business days after the Option Agreement is accepted for filing by the Exchange or by January 31, 2004 at the latest;
b) issue 50,000 common shares within five (5) business days after the Option Agreement is accepted for filing by the Exchange or by January 31, 2004 at the latest; and
c) expend an aggregate of $25,000 on a Stage I program of exploration and development work on the Claim on or before March 31, 2004; and
The Second Stage
To earn a further 26% interest in the Claim, the Company shall:
a) pay a further $10,000 to Carroll on or before December 31, 2004;
b) expend a further aggregate of $75,000 on a Stage II program of exploration and development work on the Claim on or before December 31, 2004; and
c) issue a further 75,000 common shares in its capital stock to Carroll within five (5) business days following the acceptance for filing by the Exchange of a geological report prepared by an independent Professional Engineer or Geologist recommending the further expenditure of funds in excess of those detailed herein for a Stage II program of exploration on the Claim; or by December 31, 2004 at the latest; and
The Third Stage
To earn a further 49% interest in the Claim, The Company shall:
a) pay a further $15,000 to Carroll on or before December 31, 2005;
b) expend a further aggregate of $150,000 on a Stage III program of exploration and development work on the Claim on or before December 31, 2005; and
c) issue a further 125,000 common shares in its capital stock to Carroll on, or before, by December 31, 2005 at the latest;
2. Should the Company be successful in discovering kimberlite pipes on the Claim, as confirmed by an independent geological authority, the Company shall pay Carroll the sum of $25,000. For each kimberlitic pipe discovered up to a maximum of two (2) kimberlitic pipes or a total payment of $50,000.
3. Should the Company not make the payments, share issuances and exploration expenditures set out in paragraph 1., up to and including the Third Stage, on or before their respective due dates, then the Option shall terminate and the Company shall earn no interest in the Claim.
There shall be reserved unto Carroll a 3% overriding royalty on any diamond production from the Claim (the "Production Royalty") with a buy-back proviso contained in the Production Royalty Agreement allowing the Company to purchase back from Carroll up to 66.66% (a cumulative 2%) of the Production Royalty at a total cost of $3,000,000.
The Company shall be the Operator of the Claim, for so long as the Option agreement is in effect and, consequent to restrictive equipment availability and scheduling requirements, shall undertake immediately an airborne multi-frequency Electromagnetic (EM) survey of the Claim utilizing Meridian Geoscience's Hummingbird Electromagnetic/Magnetic system.
This agreement is subject to the Company obtaining regulatory approval for the material change. This is an Arms-length transaction, and there is no finder's fee involved.
ON BEHALF OF THE BOARD
"Robert T. Paterson"
President
SNOWFIELD DEVELOPMENT CORP.
THE CANADIAN VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENTS HEREOF.