Northern Gold and ValGold Announce Agreement to Consolidate 100% Ownership of Garrison Property
April 07 2011 - 12:50PM
Marketwired
Northern Gold Mining Inc. (TSX VENTURE: NGM) and ValGold Resources
Ltd. (TSX VENTURE: VAL)(FRANKFURT: VR2) are pleased to announce
that the companies have entered into a definitive agreement to
consolidate 100% ownership of the Garrison Property. Under the
terms of the agreement Northern Gold is purchasing ValGold's
interest in the Garrison Option and Joint Venture Agreement,
subject to closing and regulatory approval.
Northern Gold's buy-out of the Garrison Option and Joint Venture
Agreement gives it 100% ownership interest in the Garrison
Property. In consideration for this sale, ValGold will receive:
-- a cash payment of C$650,000 of which C$325,000 is to be paid at closing
and C$325,000 to be paid within 90 days of the closing date;
-- 16 million common shares in Northern Gold ("Northern Gold Shares")
giving ValGold aggregate ownership of 17.55% of the issued and
outstanding shares of Northern Gold on a non-diluted basis. For a period
ending on the earlier of twenty-four months after closing or a change of
control:
i. Northern Gold has a right to vote the Northern Gold Shares shares; and
ii. Northern Gold has a right of first refusal to provide a buyer for any
sale by ValGold in excess of 160,000 Northern Gold Shares in any
calendar month.
-- a 2% net smelter return royalty of which (i) half (i.e. 1%) can be
acquired by Northern Gold for C$5 million paid to ValGold at any time
upon the earlier of thirty-six months following regulatory approval and
the commencement of commercial production, and (ii) the remaining 1% can
be acquired for a further payment of C$10 million at any time upon the
earlier of seventy-two months following regulatory approval and the
commencement of commercial production.
Martin Shefsky, President and CEO of Northern Gold commented,
"This is an important step in Northern Gold's objective of
developing the Garrison Property. As 100% owner of the Garrison
Property, Northern Gold will have complete flexibility in
completing exploration and development. ValGold has been a great
partner and we look forward to our ongoing relationship with
ValGold as a significant shareholder."
Stephen Wilkinson, President and Chief Executive Officer of
ValGold also commented, "This is a significant step in executing on
our growth strategy. Not only are we positioned with a significant
share holding in a formidable player in the market, but also we are
now better positioned with increased cash flows to re-invest in
existing key properties and net new investments to generate greater
value for our shareholders. We look forward to participating in the
future success of Northern Gold and the Garrison Property".
About Northern Gold
Northern Gold Mining Inc. is a TSX-V listed, publicly traded
junior resource company based in Toronto, Ontario, dedicated to the
discovery and development of high value mineral deposits in the
proven mining camps of Kirkland Lake and Timmins in North Eastern
Ontario. Northern Gold is focused on developing two advanced stage
gold deposits on the Garrison Gold Property. The Property is
located within the Abitibi greenstone belt along the
Porcupine-Destor and the Munro Fault systems. The Property hosts
several gold mineralized showings in addition to the two advanced
stage exploration targets, the Jonpol and Garrcon Deposits, for
each of which NI 43-101 compliant mineral resources have been
calculated, and the less advanced 903 gold mineralized area.
Historic diamond drilling by previous operators was completed in
all three referenced areas. The Jonpol Technical Report was posted
on SEDAR October 21, 2009 and the Garrcon Technical Report was
posted on SEDAR November 5, 2010. The Garrison Gold Property has
historic mining infrastructure at both the Jonpol and Garrcon
Deposits and producing mines are located in close proximity to the
property. The Company was in the second year of an option agreement
under which it may have earned up to an 80% interest in the
Garrison Gold Property from ValGold Resources Ltd. ("ValGold")(TSX
VENTURE: VAL).
About ValGold
ValGold Resources Ltd. is an international development company
based in Vancouver, Canada. The Company's objective is to generate
wealth for its stakeholders by applying its strategy of acquiring
properties with identified but under-explored mineral
resources.
ValGold's commitment to realize world-class mineral deposits is
based on a strategy that employs three key fundamental
criteria:
-- Mineral rights to extensive areas in prospective but under-explored
regions.
-- Mineral exploration projects with potential for substantial development.
-- Experienced management with exploration, mining and financial expertise.
Incorporated in 1987, the Company is listed on the senior board
of the TSX Venture Exchange under the symbol VAL.
The technical aspects of this press release have been reviewed
by Michael Gross M.S., P.Geol., Vice President Exploration for
Northern Gold, who is the "Qualified Person" as defined by NI
43-101 for this project.
CAUTIONARY STATEMENT: Neither 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. This News Release
includes certain "forward-looking statements". These statements are
based on information currently available to the Company and the
Company provides no assurance that actual results will meet
management's expectations. Forward-looking statements include
estimates and statements that describe the Company's future plans,
objectives or goals, including words to the effect that the Company
or management expects a stated condition or result to occur.
Forward-looking statements may be identified by such terms as
"believes", "anticipates", "expects", "estimates", "may", "could",
"would", "will", or "plan". Since forward-looking statements are
based on assumptions and address future events and conditions, by
their very nature they involve inherent risks and uncertainties.
Actual results relating to, among other things, results of
exploration, project development, reclamation and capital costs of
the Company's mineral properties, and the Company's financial
condition and prospects, could differ materially from those
currently anticipated in such statements for many reasons such as:
changes in general economic conditions and conditions in the
financial markets; changes in demand and prices for minerals;
litigation, legislative, environmental and other judicial,
regulatory, political and competitive developments; technological
and operational difficulties encountered in connection with the
activities of the Company; and other matters discussed in this news
release. This list is not exhaustive of the factors that may affect
any of the Company's forward-looking statements. These and other
factors should be considered carefully and readers should not place
undue reliance on the Company's forward-looking statements. The
Company does not undertake to update any forward-looking statement
that may be made from time to time by the Company or on its behalf,
except in accordance with applicable securities laws.
Contacts: Northern Gold Mining Inc. Martin R. Shefsky President
and CEO 416-366-7300 416-366-7301 (FAX) mshefsky@northerngold.ca
www.northerngold.ca ValGold Resources Ltd. Stephen J. Wilkinson
President & Chief Executive Officer 604-687-4622 604-687-4212
(FAX) info@valgold.com www.valgold.com