Euromax Resources Ltd. (TSX VENTURE:EOX) ("Euromax" or the "Company") is pleased
to announce that it has completed the sale of its Bulgarian operations through
the sale of its subsidiary company Euromax Services EOOD ("Euromax Services")
for consideration of US$3.5 million. Euromax Services owns 100% of the Trun
project and the Babjak and Zlataritza exploration assets in Bulgaria.
US$0.6m was paid upon signing and the remaining upfront consideration of US$2.1m
is payable in cash before 9 May 2014, with the balance being retained by the
purchaser as indemnification against any liability arising under the warranties
and (assuming there are no claims under the warranties) will be paid in two
separate instalments: US$0.5m on 31 December 2015 and US$0.3m on 31 December
2018. The Company retains a pro-rata share pledge to secure payment of the
deferred instalments. As part of the agreement, the Company has also cancelled
the 1.5% Net Smelter Return it held over the Breznik property, as previously
reported in news releases dated 7 May 2012 and 27 September 2013.
The Company has established a new stand-alone exploration services company in
Bulgaria, Euromax Exploration Services EOOD ("EES"), into which a number of key
Euromax personnel have been transferred with Mr. Dimitar Dimitrov taking the
role as Managing Director. EES has already secured its first contract that will
cover its fixed forecast operating expenditures over the next year and has
initiated marketing to secure further contracts. The EES team has extensive
experience in target definition, resource estimation, interpretation, mapping,
database and project management. As part of this restructuring and with his new
role as Managing Director of EES, Dimitar Dimitrov will be stepping down as
Senior Vice-President of Exploration of Euromax, but will continue to be fully
engaged with the Company's other projects.
The sale of this asset and the establishment of EES follow a comprehensive
strategic review in the light of challenging market conditions in the junior
gold sector and is aimed at ensuring the most efficient use of the Company's
personnel and resources. The sale proceeds will be used to finalise the
Company's Ilovitza Pre-Feasibility Study, progress development work on its
Ilovitza project in Macedonia, and for general corporate purposes.
Update on Ilovitza Pre-Feasibility Study ("Ilovitza PFS")
The Company, in a press release dated 3 December 2013 and subsequent Technical
Report filed on 17 January 2014, announced an increased mineral resource
estimate for the project. This significantly larger resource necessitated a
complete re-optimisation of the PFS to ensure that the maximum value of this
resource is exploited. This re-optimisation has necessarily delayed publication
of the PFS by a few months as the Company has adapted and re-optimised the mine
plan, through-put rate and tailings design and placement for the Ilovitza
project. This additional work will properly reflect the full exploitation of the
significantly increased resource when the complete results of the Ilovitza PFS
are announced in June 2014.
Commenting on the announcement, Steve Sharpe President & CEO, said: "These have
been very trying times for junior exploration companies and I am very proud of
the pragmatism shown by the management team in implementing an innovative
restructuring that not only sees a significant cash injection, but also allows
our highly respected exploration team to stand on its own two feet financially.
As such it will be perfectly placed to take advantage of the cyclical upturn in
regional exploration interest when it occurs, as it surely will.
"The cash proceeds from the sale of Euromax Services will allow us to continue
on track with development work at Ilovitza, which is where we believe the
tangible and deliverable value of the Company lies. In that context, we fully
expect the re-optimised PFS to demonstrate a step-change economic improvement
over an already robust Preliminary Economic Assessment."
About Euromax Resources Ltd.
Euromax is a Canadian exploration and development Company with gold and base
metal assets in Macedonia and Serbia and an exploration services company in
Bulgaria. We are focused on developing mineral resources in Southeastern Europe,
with the objective of becoming a world-class mining company in the region. Our
strength lies in our corporate and local management and technical expertise in
Macedonia, Bulgaria and Serbia.
This news release contains forward-looking statements including but not limited
to statements regarding the exploration services company, Euromax Exploration
Services Ltd, an updated resource estimate, and the completion of a
Pre-Feasibility Study for its Ilovitza project. In making the forward-looking
statements in this release, the Company has applied certain factors and
assumptions that are based on information currently available to the Company as
well as the Company's current beliefs and assumptions made by the Company,
including with respect to mineral resource estimates, that the key assumptions
and parameters on which such geological interpretations are based are
reasonable, that the Company will be able to obtain the necessary supplies,
equipment, personnel and any financing required to carry out its planned
activities, that the Company's objectives concerning the Ilovitza project can be
achieved and that the Company's activities will proceed as expected. Although
the Company considers these assumptions to be reasonable based on information
currently available to it, they may prove to be incorrect, and the
forward-looking statements in this release are subject to numerous risks,
uncertainties and other factors that may cause future results to differ
materially from those expressed or implied in such forward-looking statements.
Such risk factors may include, among others, that that mineral resources are not
as estimated, unexpected variations in mineral resources, grade or recovery
rates, actual results of exploration activities will be different than
anticipated, data and assumptions underlying the geological interpretations may
prove to be inaccurate, incomplete or to have been incorrectly interpreted, that
the Company will not be able to obtain the necessary supplies, equipment,
personnel and any financing required to carry out its planned activities.
Readers are also encouraged to review all Company documents filed with the
securities authorities in Canada, including the Management Discussion and
Analysis in respect of the Company's recent financial statements under the
heading "Operational and Other Business Risks", which documents describe
material factors and assumptions and risks that apply to the forward looking
statements in this release. Readers are cautioned not to place undue reliance on
forward-looking statements. The Company does not intend, and expressly disclaims
any intention or obligation to, update or revise any forward-looking statements
whether as a result of new information, future events or otherwise, except as
required by law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) has reviewed or accepts
responsibility for the adequacy or accuracy of this release.
For more information, please visit www.euromaxresources.com.
FOR FURTHER INFORMATION PLEASE CONTACT:
Euromax Resources Ltd.
President & CEO
+44 (0)20 3667 2970
Euromax Resources Ltd.
N. American Representative
+1 416 294 5649