Tentative Agreement to Sell Northland's Non-Ferrous Assets in Sweden

27.10.2010  |  Marketwired

LUXEMBOURG, LUXEMBOURG -- (Marketwire) -- 10/27/10 -- Northland Resources S.A. (TSX: NAU)(OSLO: NAUR)(FRANKFURT: NBS) - ('Northland' or 'the Company') is pleased to announce that it has signed a Letter of Intent ('LOI') to sell the Company's non-ferrous projects in Sweden to Orex Minerals Inc. ('Orex'). The total consideration is valued at a minimum of USD 15.5 million, and includes a mix of upfront cash and shares, as well as deferred cash and share payments, guaranteed investments and a 2% Net Smelter Royalty ('NSR').

Mr. Karl-Axel Waplan, President and CEO of Northland, commented, 'The signed LOI for the sale of the non-ferrous projects in Sweden, including the Barsele Gold Project, is in line with the Company's strategy to focus on iron ore and dispose of non-core assets. The Board of Directors believes that the inherent value of the Swedish non-ferrous projects will be better developed by a team that can focus its resources and technical expertise on advancing these projects towards mining operations.'

Northland will receive a total of USD 5 million in cash over two years, and USD 3.5 million worth of Orex shares to be issued over a period of four years from signing of the Final Agreement. Orex has also guaranteed that a minimum USD 3 million will be spent on the non-ferrous projects in the first two years. Finally, Northland will retain a 2% NSR, which can be purchased at any time by Orex for USD 4 million in cash. Northland will also have the right to appoint a Director to the Board of Orex.

Orex is a silver and gold exploration company with projects in Mexico. It is listed on the TSX Venture Exchange under the trading symbol REX. The Orex management team has a proven track record in exploration and company development, most recently with the TSX Venture Exchange-listed company Orko Silver Corp.

Final details, conditions and approvals are expected to be completed over the next few months, with closing expected on or about January 26, 2011. A further announcement will be made upon closing. Pareto Securities AS has acted as financial advisor with respect to this transaction.

ON BEHALF OF THE BOARD

'Karl-Axel Waplan'

President and CEO, Northland Resources S.A.

For more information please visit our website at: www.northland.eu

Contacts:

Northland Resources S.A.

Karl-Axel Waplan

President & CEO

+46 705 104 239


Northland Resources S.A.

Anders Hvide

Executive Chairman

+47 92 88 98 58


Northland Resources S.A.

Eva Kaijser

CFO

+46 709 32 09 01


Northland Resources S.A.

Marguerite Manshreck-Head

Investor Relations

Canada: +1 647 224 7882
www.northland.eu