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Snowfield Development Corp (TSX: SNO) ("Snowfield") announces that it has entered into a Letter of Intent Agreement (the "Agreement") with Challenger Development Corp. ("Challenger") of Vancouver, B.C. whereby Challenger can earn up to a 51% joint venture interest in Snowfield's Wire Mineral Claim.
The Wire Claim is located in the South Mining District of the Northwest Territories, covering approximately 413.2 acres, and is proximate to Snowfield's Ticho Project kimberlite property currently being explored by Snowfield. The Wire Claim was originally acquired by Snowfield under a Letter of Intent Agreement dated November 27, 2003, as amended April 30, 2004 and December 31, 2004, with Robert Carroll of Yellowknife, N.W.T., (the "Carroll Agreement") the beneficial owner of a 100% interest in the Wire Claim. The Carroll Agreement sets out the principal terms between Robert Carroll and Snowfield whereby Snowfield would earn a 100% joint venture interest in the Wire Claim.
The Wire Claim is a diamond exploration property which has been the subject of earlier ground and airborne geophysical surveys, surface sampling and a one-hole diamond drill program. The Wire Claim has a significant geophysical target that warrants further exploration. The Wire Claim, formerly known as the Drybones #11 Claim, was the subject of technical report dated June 20, 1996, by Mark Senkiw, P.Geol. The Senkiw Report was not written in accordance with National Instrument 43-101F1 Technical Report standards
To earn a 51% interest in the Wire Claim from Snowfield, Challenger will make cash payments to Snowfield of a cumulative total of $60,000; issue Snowfield a cumulative total of 300,000 common shares of Challenger's capital stock; and expend a cumulative total of $250,000 on programs of exploration on the Wire Claim under a two stage Option as follows:
The First Stage
To earn an 25% interest in the Wire Claim, Challenger shall:
a) pay $25,000 to Snowfield on or before March 31, 2005 at the latest;
b) subject to regulatory approval, issue 100,000 common shares of its capital stock to Snowfield
on or before March 31, 2005 at the latest; and
c) expend an aggregate of $100,000 on a Stage I program of exploration and development work on the
Wire Claim on or before October 31, 2005.
The Second Stage
To earn a further 26% interest in the Wire Claim, Challenger shall:
a) pay a further $35,000 to Snowfield on or before December 31, 2005;
b) expend a further aggregate of $150,000 on a Stage II program of exploration and development work
on the Wire Claim on or before July 31, 2006; and
c) issue a further 200,000 common shares to Snowfield by September 30, 2006 at the latest.
Should Challenger be successful in discovering kimberlite pipes on the Wire Claim, Challenger shall pay Snowfield the sum of $35,000 for each kimberlitic pipe discovered up to a maximum of two kimberlitic pipes or a total payment of $70,000.
A Production Royalty of cumulative 4% overriding royalty on any diamond production from the Wire Claim is reserved in favour, collectively, of Robert Carroll and Snowfield with a buy-back proviso contained in the Production Royalty Agreement allowing Challenger to purchase back from Robert Carroll and Snowfield, up to 50% (a cumulative 2%) of the Production Royalty at a total cost of $3,000,000.
Challenger shall be the Operator for the Wire Claim, for so long as the Option Agreement is in effect.
The Agreement is subject to Challenger obtaining regulatory approval for the material change. There is no finder's fee related to this transaction. Snowfield advises that Robert T. Paterson, the President and a Director of Snowfield, is also the President and a Director of Challenger.
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.