Hodgins announces intention to increase ownership position in acquisition of prospective uranium claims in Athabasca basin

MELFORT, SK, Oct. 20, 2014 /CNW/ - On August 15, 2014 Hodgins Auctioneers Inc. ("Hodgins" or the "Corporation") (TSXV: HA) announced that a wholly owned subsidiary (1839579 Alberta Ltd. or "1839579")  had acquired a 25% undivided interest from Majesta Resources Inc. ("Majesta") in a group of nine contiguous mineral claims with a combined total of 39,125 hectares (98,233 acres)("Majesta Mineral Claims") located 230 km NW of La Ronge and 445 km north of Prince Albert, Saskatchewan.  The northeastern corner of the claims are 10 km from the Key Lake uranium mill. 1839579 has an option to acquire an additional 35% undivided interest by conducting depositing $400,000 into a joint venture account to pay work exploration on or before December 31, 2014 and issuing 4,000,000 common shares of the Corporation at a deemed price of $0.05 per common share. 1839579 wishes to exercise the option to acquire the 35% undivided interest to bring its total ownership to 60%.  The Corporation is seeking to raise $1,000,000 in flow-through shares to fund the acquisition and to fund further exploration and drilling on the claims.

The acquisition will constitute a "Change of Business" as defined in the TSX Venture Exchange ("TSXV") policies. The transaction is conditional upon (a) TSXV approval; (b) shareholders' approval; and (c) the raising of at least $450,000 by non-brokered private placement. 

Terms of the Agreement

Majesta will be the operator and will conduct all exploration activities under the terms of a joint operating agreement until the ownership of the Corporation is at least 75%.  The operator has advised that it expects to drill 10 holes (200 meters each) for each tranche of $400,000.  Any party failing to make cash call are subject to dilution of their respective working interest.  If any party is diluted below an undivided 10% their interest is converted to a 0.75% net smelter royalty which can be purchased for fair market value. The Corporation has a further option to acquire an additional; 30% on or before December 31, 2015 by paying $400,000 to Majesta and issuing 2,000,000 common shares of the Corporation.

Interest of Insiders in Majesta

Grant Hodgins and Barrie Jung are officers and directors of the Corporation.  Grant Hodgins and Barrie Jung, directly or indirectly, own 20.15% of the issued (22,717,500) and outstanding shares of the Corporation. Grant Hodgins is an officer and director of Majesta. Grant Hodgins and Barrie Jung own 34% of the common shares of Majesta.  

Randy Studer is a director and officer of Majesta.  Randy Studer, directly or indirectly, and together with family members own 64.79% of the common shares of Majesta. Randy Studer lives in La Ronge, Saskatchewan, and his primary occupation for 35 years has been conducting exploration work for mining companies, through a legal entity called Durama Enterprises Limited. Randy Studer was a director and president of a publicly owned mining exploration company on the TSXV from 1995 to 2006 (Explor Resources Inc.). Mr. Studer will not become an officer and director of the Corporation.  Mr. Studer will not become a control person of the Corporation.

Majesta Mineral Claims

Majesta holds 75% interest in the Majesta Mineral Claims, as listed in the following table. 

Expenditures required by Saskatchewan Government to keep Claims in Good Standing.

Number     (1)	Area     (2)	Good Until     (3)	Assessment credit Oct 1-14	MAW 520	Due by 2015
S-110101	4001	25/04/2015	-$12,002	$12,002	$60,015
S-110715	3495	25/04/2015	-$10,485	$10,485	$52,425
S-110716	5398	25/04/2015	-$12,688	$12,688	$80,970
S-110717	5186	25/04/2015	-$15,558	$15,558	$77,790
S-110891	4326	25/05/2015	-$2,911	$2,911	$64,890
S-110892	4655	25/05/2015	-$13,825	$13,825	$69,825
S-110894	5545	25/05/2015	-$16,635	$16,635	$83,175
S-111627	2334	27/09/2015(1)	-$19,874	$19,874	$35,010
S-112322	4185	09/09/2015(1)	-$4,333	$4,333	$62,775
	39125		-$108,311	$108,311	$586,875.00
Note:  Assumes Filing and Processing of the MAW 520 by the Saskatchewan Government

Majesta and the Corporation does not own the minerals.  The Government of Saskatchewan issues a claim by which Majesta has the right to explore, develop and exploit minerals on the mineral claims and such other rights attributed to a "claim" as  defined by Part VI the Mineral Tenure Registry Regulations (Saskatchewan) Chapter C-50.2 Regulation 27 (effective December 1, 2012) (as amended by Saskatchewan Regulation 70/2013) promulgated under the Crown Minerals Act (Saskatchewan) Chapter 50.2 (subject to any transitional provisions contained in The Mineral Disposition Regulations 1986 (Saskatchewan).

Under the provisions of the Crown Minerals Act (Saskatchewan), the Province of Saskatchewan owns the minerals.  The Government of Saskatchewan provides the holder of a mineral claim certain rights for a 1 year period.  There is no obligation to conduct exploration work.  The one year period can be extended indefinitely for further 1 year periods provided the holder:

(a) Expend a set sum of money each year on exploration; and

(b) The holder reports the expenditure within the defined period and the expenditures are accepted by the Province of Saskatchewan as qualifying expenditures.

The one year period will be extended for a period determined by dividing the qualifying expenditures by the annual requirement.  Expenditures can be allocated from claim to claim subject to certain limitations.  

Private Placement

The Corporation has sought TSXV approval for a proposed non-brokered private placement of up to 20,000,000 common shares at a price $0.05 per common share for gross proceeds of up to $1,000,000.  Six of seven of every common share issued has flow through attributes.   All of the securities issued under the private placement will be subject to a four month resale restriction and will contain a legend which will detail the resale restriction.  There is a minimum of $450,000 minimum subscription under the private placement and Hodgins may close the offering in several tranches, however, the private placement must be concluded by December 31, 2014. The proceeds of the private placement will be used to make the claims acquisition.

In connection with this private placement, Hodgins will pay cash finder's fees equal to 8% of the funds raised to eligible finders who introduce subscribers to the private placement and issue one common share and one finder's fee common share for every 10 common shares issued to eligible subscribers.     

About Hodgins Auctioneers Inc.

Hodgins Auctioneers Inc. is an auction company conducting business in Western Canada.  For further information, please contact Grant Hodgins, CEO, 306.752.2075 or visit www.hodginsauctioneers.com

Reader Advisory

Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur.  In particular, forward-looking information in this press release includes, but is not limited to, statements with respect to the timing and completion of the proposed private placement and related information. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.

The forward-looking information contained in this news release is expressly qualified by this cautionary statement. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. 

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Hodgins Auctioneers Inc.

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