VANCOUVER,
May 8, 2012 /PRNewswire/ - Emerick
Resources Corp. (TSXV: ERC) ("Emerick" or the
"Company") is pleased to announce that it has entered into a
non-binding letter agreement dated April 26,
2012 to acquire all of the outstanding shares of Medgold
Resource Ltd. ("Medgold") (the "Transaction"), a
private company incorporated in England and Wales focused on the exploration and
development of precious and base metals in Western Europe.
The Proposed Transaction
To acquire Medgold, the Company will issue
32,287,500 shares in its capital stock to Medgold's shareholders in
proportion to their respective shareholdings in Medgold.
Emerick's resulting issued capital will be 52,416,078 shares, of
which Medgold's shareholders will own 61.6%. All outstanding
options in Emerick and Medgold will be cancelled. The
Company's current working capital position of approximately
$500,000 will increase to
$1.3 million.
Ralph Rushton will
remain as Director and President of Emerick
and Simon Ridgway as Chairman of the Board. Upon completion
of the Transaction, Dan James will
be appointed as Director and CEO of Emerick and will be joined on
the Board by David Hall and
Jeremy Martin, all of whom are
directors of Medgold. Medgold has the right to appoint one
additional representative to the Board after completion of the
Transaction.
Based on the terms of the Transaction, Emerick will
apply to the Exchange to have its listing graduated from the NEX
board to Tier 2 of the TSX Venture Exchange (the "Exchange")
as a resource issuer. Upon completion of the Transaction, the
Company will be known as "Medgold Resources Corp.". Medgold is at
arm's length to the Company, and none of the directors or officers
of the Company are directors, officers or shareholders of
Medgold.
The Transaction will be completed by way of a
legally binding sale and purchase agreement ("SPA") which
will be entered into between Emerick and each of Medgold's
shareholders. The completion of the transaction will be subject to
a number of conditions, including, inter alia, entering into the
SPA, approval of both Medgold's and Emerick's respective boards,
approval of the Transaction by Emerick's shareholders, completion
of a 43-101 compliant technical report on one of Medgold's assets
and approval of the Transaction by the Exchange.
The Properties
Medgold has licences granted and under application
in Italy, Spain and Portugal, targeting gold and base metal
projects. These countries are favourable jurisdictions, with robust
mining codes, backed by administrations who are actively seeking
both foreign investment and commodity exploration companies.
Upon completion of the Transaction, it is expected that the
Pietratonda project, described below, will be the Company's
material property for the purposes of NI 43-101.
Italian Projects: Pietratonda and
Frassine
Medgold is the owner of two gold exploration
licences in Italy, each 8 square
kilometers in area, called Pietratonda and Frassine, covering gold
mineralization hosted within silicified limestones known as
jasperoids. Their occurrence is controlled by steeply-dipping
normal faults and low-angle thrust faults and their intersection
with limestone-flysche contacts.
At Pietratonda gold mineralization is hosted in the
limestone unit called Calcare Cavernoso and crops out in small
exposures located in dense woodland. Gold-bearing jasperoids, which
are typically low- to medium-grade, are extensive over a strike
length of 1.1 km and widths of up to 200 m. Mineralization is
typically associated with a unconformable thrust contact with
underlying basement rocks with much of the contact covered by
Pleistocene silica sands - which have previously been exploited by
quarrying methods. Gold grades from historical rock-chip
exploration programs yielded results of 0.81, 0.71 and 0.62 g/t Au.
High-angle normal faults, which have been reported by previous
authors, are the key exploration targets as these are commonly
high-grade and are typically feeder structures to the
jasperoids.
Field work has commenced at Pietratonda with a
program of grid-soil sampling covering the main zone of gold
mineralization. Channel-chip sampling and detailed geological
mapping will also commence in the coming weeks. It is
intended to commence permitting for drilling as soon as the results
of this work are evaluated and drill targets have been defined.
At Frassine, mineralization hosted at the contact
between limestone units and an overlying and capping flysch unit,
is exposed in several locations over 1.4 kilometres of
strike. Best gold grades occur in a road section, 0.8 km
north of the village of Frassine, which yielded historical grab
sample results ranging from trace to 43.0 g/t Au. Medgold
sampling intersected 0.41 g/t Au over 12 metres from a contiguous
channel-chip sample, located on the same jasperoid, approximately
120 metres northwest of the above historical anomalies.
Medgold has designed field programs consisting of grid-soil
sampling and systematic rock-chip sampling over the key anomalies,
with the aim of defining drill targets by year-end.
Previous work at Frassine and Pietratonda was
limited to geological mapping and rock-chip sampling, carried out
by Anglo American in 1987-92 and
Adroit in 2004-08.
Portuguese Targets
Medgold has also applied for four exploration
licences in northern Portugal,
targeting intrusion-related gold systems, similar to Astur Gold's Salave project, in northwest
Spain, which hosts Measured
Resources of 2.1 Mt at 3.88 g/t for 268,000 oz Au, and Indicated
Resources of 15.8 Mt at 2.79 g/t for 1.4 M oz Au*. At Salave, gold
is typically vein-hosted, locally attaining bonanza grade status,
with veins and associated alteration, commonly extensive over
kilometres of strike. The Romans, who mined the high-grade
Au-As veins, conducted extensive exploration and exploitation
programs throughout the northern Portugal region, with many of the prospects
now the focus of modern-day exploration.
* See "Technical Report on Salave Gold
Deposit, Spain" by Scott Wilson
RPA, February 25, 2010:
http://www.asturgold.com/data/2011/12/salave_43-101.pdf
The Portuguese government is encouraging new
exploration investment and making efforts to streamline the
application process. The licences, some of which are subject
to a public tender, are expected to be issued in mid-2012.
They vary from early-stage exploration, covering large acreages of
ground, to drill-ready projects. All of the projects have
been subject to previous exploration, and three have conceptual
resources. Field operations are planned to commence
immediately following licence issuance.
Spanish Exploration
Medgold has signed a binding agreement with Ormonde
Mining plc to strategically explore for gold in northern
Spain. Ormonde has developed
an extensive geochemical database covering an area of over 2,500 sq
km, from which Medgold has defined a series of key exploration
targets, and will be applying for licences in Q2 2012.
Conditions for Completion
Completion of the Transaction is subject to a
number of conditions, including acceptance by the Exchange and
Emerick shareholder approval. The Transaction cannot close until
the required shareholder approval is obtained. There can be no
assurance that the Transaction will be completed as proposed or at
all.
Investors are cautioned that, except as
disclosed in the management proxy circular to be prepared in
connection with the Transaction, any information released or
received with respect to the Transaction may not be accurate or
complete and should not be relied upon. Trading in the securities
of the Company should be considered highly speculative.
The Exchange has in no way passed upon the
merits of the proposed Transaction and has neither approved nor
disapproved the contents of this press release.
Qualified Person
Mr. David Cass, a
director of Emerick, is a member of the Association of Professional
Engineers and Geoscientists of British
Columbia, and a Qualified Person in accordance with NI
43-101. Mr. Cass has reviewed and approved the technical
information in this release based on reports provided to Emerick by
Medgold and on reports by historic workers. Emerick, however,
has not independently verified Medgold's exploration results or
those of historic workers.
ON BEHALF OF THE BOARD
"Ralph
Rushton"
Ralph Rushton, President &
CEO
Neither the TSX Venture Exchange nor
the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy
or accuracy of this release.
Forward-Looking Statement
This news release includes certain
"forward-looking information" within the meaning of Canadian
securities legislation. Forward-looking statements include
predictions, projections and forecasts and are often, but not
always, identified by the use of words such as "seek",
"anticipate", "believe", "plan", "estimate", "forecast", "expect",
"potential", "project", "target", "schedule", budget" and "intend"
and statements that an event or result "may", "will", "should",
"could" or "might" occur or be achieved and other similar
expressions and includes the negatives thereof. All
statements other than statements of historical fact included in
this release, including, without limitation, statements regarding
the expected benefits of the transaction, the completion of the
transaction, the receipt of any regulatory approvals for the
transaction and the potential of the properties are
forward-looking statements that involve various risks and
uncertainties. There can be no assurance that such statements will
prove to be accurate and actual results and future events could
differ materially from those anticipated in such statements.
Forward-looking statements are based on a number of material
factors and assumptions. Important factors that could cause
actual results to differ materially from Company's expectations
include actual exploration results, changes in project parameters
as plans continue to be refined, future metal prices, availability
of capital and financing on acceptable terms, general economic,
market or business conditions, uninsured risks, regulatory changes,
delays or inability to receive required approvals, and other
exploration or other risks detailed herein and from time to time in
the filings made by the Company with securities regulators.
Although the Company has attempted to identify important factors
that could cause actual actions, events or results to differ from
those described in forward-looking statements, there may be other
factors that cause such actions, events or results to differ
materially from those anticipated. There can be no assurance
that forward-looking statements will prove to be accurate and
accordingly readers are cautioned not to place undue reliance on
forward-looking statements.
SOURCE Emerick Resources Corp.
