VANCOUVER,
April 12, 2013 /CNW/ - Telson
Resources Inc. (TSX Venture - TSN) ("Telson" or the
"Company") is pleased to report that its
wholly-owned Mexican subsidiary, Samarkand de Mexico S.A. de
C.V. ("Samarkand") has entered into a "CONTRATO DE
PROMESA", the Mexican equivalent of a Canadian Letter of
Intent, with Minera Hestgold S.A. de C.V. ("Hestgold") (the
"Agreement"). The Agreement outlines the major terms and
conditions whereby Samarkand and Hestgold intend
to develop and operate the El
Realito Project (the "Realito Project"), an open pit
mining facility located near Culiacan, the capital city of Sinaloa, Mexico.
Project Description
The Realito Project mining and processing facility
is accessible via 45km of paved highway, plus 15km of
gravel road north-northeast from the City
of Culiacan. The Realito Project is a low sulfidation
epithermal gold-silver deposit that consists of several mineralized
structures hosted within igneous rocks. The most explored and main
structure, El Realito, has been
traced over 4km of strike length and extensively exposed along
approximately 1.5km of that strike length on mineralized zones
stripped of overburden in preparation of surface mining. The
El Realito structure has been
sampled on the surface and tested with at least ten widely spaced
diamond drill holes. Tables presenting this historic data are
available for viewing on the Company's website
http://www.telsonresources.com/elrealitoproject/historical-data.html
A historic potentially open pittable resource was calculated in
a report dated February
8th, 2008 (the "Historical Resource Report"),
prepared by Mexican geological engineer, Ezael Martin Rocha
Turrubiates ("Turrubiates"). Senor Turrubiates graduated in 1968
from "Instituto Politecnico Nacional", The National Polytechnic
Institute in Mexico DF, with a
professional certificate issued by the "Direccion General de
Profesiones".
The Historical Resource Report calculates a resource, in all
resource categories, of 1,461,099 tonnes at 2.918 g/t gold and
11.46 g/t silver. Please see the table below for details of
the resource.
Category |
Tonnage |
Grade (gr/ton) |
Calculated |
Adjusted |
Au |
Ag |
Proven |
569,783 |
472,012 |
3.505 |
15.04 |
Probable |
601,080 |
406,336 |
3.119 |
12.55 |
Possible |
265,399 |
132,700 |
2.703 |
10.76 |
Indicated |
900,101 |
450,051 |
2.183 |
6.94 |
Totals |
2,336,363 |
1,461,099 |
2.918 |
11.46 |
As the historic resource has been calculated on the basis of
widely spaced drill holes, underground and surface sampling, Telson
cautions that readers should not place undue reliance on same.
Telson advises that considerable in-fill drilling, assaying and
QA/QC work would be required to verify the resource as current. No
Qualified Person has done sufficient work to classify the
historical estimate as a current mineral resource and Telson is not
treating the historical estimate as a current resource or
reserve.
The Realito Project has a mining and processing facility on
site, financed and installed by Hestgold, capable of processing up
to 300 tonnes per day by ball mill processing and gravity precious
metal separation. The crushing circuit has an over
capacity of up to 800 tonnes per day, in anticipation of
transitioning to heap leach operations in the future. The
processing facility is not yet operational, requiring additional
work to complete the final installation, which work is estimated to
take up to six months to complete, at an estimated budget of US
$1.3 million.
The Realito Project is fully permitted with a
mining environmental permit and change of use of soil
permit granted by Proteccion Ambiental Y Recursos Naturales, (MIA
Oficio # SG/145/2.1.1/0560/08) dated November 5, 2008) and Cambio De Uso De Suelo de
Terrenos Forestales, Oficio # SG/145/2.2/0843/08/ dated
October 24 2008.
The Realito Project also holds a Surface Rights Agreement with
the local Ejido Organization, Ejido de "Bagresitos" entered into
February 14, 2004, having a term of
30 years.
Agreement Terms
1. |
Under the terms of the
Agreement, Hestgold and Samarkand intend to form a new private
Mexican company ("Newco") to hold title to all of the Realito
Project concessions and mining equipment, including the
processing plant, as described above. Newco will fund and direct
the development of the Realito Project. |
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a) |
Initial ownership interest in Newco is to be 51% Telson - 49%
Hestgold. |
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b) |
Telson, through Samarkand, will invest, on
a secured loan basis, up to an initial USD$2 million into
Newco, and will be issued redeemable preferred shares (the
"Investment"). Hestgold and Telson will agree on a payment
schedule to repay the Investment by redeeming the preferred shares,
based on cash flow from production. USD $1.5 million of the
Investment will be made available for the Realito Project
development to finish construction of the milling facility and
commence commercial production, and USD$500,000 of the Investment
will be paid to Hestgold and used to payout Hestgold's most urgent
high interest liabilities, as identified on a schedule to be
prepared by Hestgold and approved by Telson. |
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2. |
Hestgold will transfer
100% of the Realito Project concessions and the mining facility
equipment into Newco at a value to be agreed upon. This value would
be a combination of the investment recorded on Hestgold's books
that can be verified (the "Verifiable Investment"),
plus a reasonable amount of investment to be agreed upon
by Telson and Hestgold (the "Good Will"), plus the
value of all surface equipment and milling equipment
(the "Equipment"). It is the intention of Hestgold and
Telson that the combination of the values of the Verifiable
Investment, the Good Will, and the Equipment (the "Hestgold
Project Investment") would be equal, or close to the total
investment that Hestgold has made in the Realito Project to date.
It is anticipated, as represented by
Hestgold, that the total value of the Hestgold Project
Investment will be between USD $7 million to USD $10 million. |
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a) |
Newco will issue redeemable preferred shares to Hestgold having
a value based on the Hestgold Project Investment, in return
for Hestgold transferring 100% ownership of the concession and
assets described above. Hestgold and Telson will agree on a payment
schedule to repay the Hestgold Project Investment by redeeming the
preferred shares, based on cash flow from production. |
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b) |
The USD$500,000 payment from Newco to Hestgold outlined in 1b,
when paid out of Newco, will be treated as a return of investment
capital to Hestgold, and will reduce the amounts to be recorded as
the Hestgold Project Investment. |
Future Development for Mill Expansion and/or Heap
Leach
Telson shall have the right to contribute additional funding to
Newco in order to explore and develop the Realito Project, with the
goal of outlining a resource of sufficient quantity to support
either a gravity mill expansion or heap leach operation. For each
USD $2,500,000 funded, Telson shall
earn an additional 4.75% stake in Newco, such that upon funding an
additional USD $10 million, Telson
will own a cumulative total of 70% of Newco. If Telson fails to
invest an amount equal to the Hestgold Project Investment at the
end of three years from the date of formation of Newco, Telson's
cumulative interest in Newco shall be reduced on a prorated basis,
but at no time or under any circumstances will Telson's interest in
Newco be reduced to less than 25%.
"In these difficult times for the junior mining sector, I am
very pleased to present to Telson shareholders and investors this
opportunity for Telson to fund and participate in the Realito
Project, thereby securing a significant interest in a project that
we hope can be developed to a production situation relatively
quickly and cost effectively." states Ralph
Shearing, President and CEO of Telson, "If we are successful
in securing initial funding for this project, we hope to have the
mill operating within six months and thereby advance from an
exploration and development company to a small scale gold
producer. We note that a feasibility study has not been
completed and there is no certainty the proposed operations will be
economically viable." "We consider that the Realito Project will
complement our advanced Tahuehueto Project, located in the prolific
Sierra Madre Mineral Belt".
Previous Funding Agreements |
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Hestgold has advised Telson that it entered into two funding
agreements, the first, on October 26th, 2010 and amended on
December 22nd, 2010; and the second on June 21st, 2011.
Both of these agreements contemplated that funding would be
provided to Hestgold and/or the Realito Project in a timely manner
in order to allow the construction of a mill processing facility.
Hestgold has represented that its previous funding partners are in
default of their respective agreements, however, until such time as
those agreements are mutually cancelled, renegotiated or terminated
by Hestgold, there remains a contingent liability of Hestgold to
the respective parties in the amount of approximately USD
$1,800,000. |
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Due Diligence |
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Samarkand and Telson have 45 days within which to conduct
further due diligence investigations and make a decision on whether
to proceed based on such investigations. Samarkand has already
conducted extensive due diligence on the Realito Project and
Hestgold, however completion of the transaction is subject to a
number of conditions, including but not limited to satisfaction
with final due diligence and TSX Venture Exchange acceptance. There
can be no assurance that the transaction will proceed and be
completed as proposed or at all. |
The proposed transaction is subject to the
acceptance of the TSX Venture Exchange.
For further information please contact the
Company directly or visit the Company's web site at the address
noted below.
This press release was prepared by
Ralph Shearing, P.Geol, a qualified
person as defined under NI 43-101
ON BEHALF OF THE BOARD OF DIRECTORS
(signed) "Ralph
Shearing"
______________________________________
Ralph Shearing,
Chief Executive Officer
"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."
WARNING: The Company relies upon litigation protection for
"forward-looking" statements. This News Release may contain
forward-looking statements including but not limited to comments
regarding the timing and content of up-coming work programs,
geological interpretations, receipt of property titles, potential
mineral recovery processes, etc. Forward-looking statements address
future events and conditions and therefore involve inherent risks
and uncertainties. Actual results may differ materially from those
currently anticipated in such statements. Telson Resources Inc.
relies upon litigation protection for forward-looking
statements.
SOURCE Telson Resources Inc.