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Due to Tournigan Energy, Ltd.
12 Months Ended
Jan. 31, 2012
Due to Tournigan Energy, Ltd. [Abstract]  
Due to Tournigan Energy, Ltd. [Text Block]

Note 5.  Due to Tournigan Energy, Ltd.

 

In connection with the acquisition of TUSA, the Company issued to Tournigan Energy an interest-free promissory note in the amount of $325,327. The promissory note was due August 31, 2009. In addition, the Company agreed to secure the release of, or reimburse Tournigan Energy for, the existing reclamation bonds on the properties in the amount of $930,000, less any applicable reclamation costs.

 

On August 21, 2009, Tournigan Energy extended the due date of the promissory note to December 15, 2009. Tournigan Energy also extended the repayment date of the first $530,000 of reclamation bonds to December 15, 2009, and the repayment of the remaining $400,000, less the cost of the reclamation work, to September 30, 2010.

 

On December 14, 2009, Tournigan Energy agreed to reduce the amount payable under the promissory note to $100,000. This amount was paid on December 15, 2009, and the promissory note was extinguished. In addition, the Company paid $100,000 as partial payment of the $530,000 installment of the reclamation bond due on that date.

On December 22, 2010, Fischer-Watt repaid Tournigan Energy a further $130,000.

 

At January 31, 2011, the balance due to Tournigan Energy was $600,000.  This amount was to be repaid from one-half of the proceeds (net of issuance costs) of all equity share issues of Fischer-Watt until Tournigan Energy has been paid in full.

 

On July 13, 2011, the Company renegotiated its debt and property interests with Tournigan Energy concerning its uranium properties in the western United States. Tournigan Energy has agreed to defer receipt of its debt and property interests by converting these Company liabilities to a two percent (2%) net smelter return (“NSR”) royalty interest on uranium properties with the Company’s current areas of work.

 

Under the renegotiated terms Tournigan Energy has:

a)

Forgiven the $600,000 payable by the Company;

b)

Converted its interests in the Company’s properties to a two percent (2%) NSR royalty up to a maximum of $10,000,000;

c)

The Company is entitled to buy back up to one-half of this royalty for $3,000,000 at any time up to July 13, 2016, and thereby reduce the remaining royalty to a one percent (1%) NSR royalty capped at $5,000,000

d)

The NSR royalty will apply to any uranium production by the Company in the Wyoming counties of Carbon, Fremont, Sublette and Sweetwater, and the South Dakota county of Fall River. These are all areas where the Company currently holds uranium property interests.

This transaction has been approved by the TSX-V exchange, as Tournigan Energy is listed in Toronto on the TSX Venture Exchange.

 

Peter Bojtos, who was President, CEO and Chairman of the Board of Fischer-Watt at that time, declared his interest in this transaction since he was also a director of Tournigan Energy.