Business & Finance
Business and Finance
Business and Finance
Tue, June 14, 2011
Mon, June 13, 2011 GIYANI GOLD TO ACQUIRE MADONSI GOLD MINE, SOUTH AFRICA
VANCOUVER, June 13, 2011 /CNW/ - Giyani Gold Corp (the "Company") (TSXV: WDG) is pleased to announce that it has entered into a binding agreement (the "Transaction") to acquire a 74% interest in historically past-producing Madonsi Gold Mine located in the Giyani Greenstone belt of South Africa. Consistent with the Rock Island acquisition update announced April 4th 2011, this Transaction together with the anticipated closing of the Rock Island transaction as previously announced will position Giyani Gold with a majority stake in seven past producing gold mines all located within a 13 km corridor of highly prospective moderate to high grade gold environment.
The Company expects to have a NI 43-101 technical report prepared on the Madonsi Gold Mine shortly after closing, which management believes will delineate a gold resource. In addition, management believes that the Madonsi Gold Mine offers considerable upside to upgrade the expected resource size and categories with short term exploration and development work.
Executive Chairman Duane Parnham was quoted, "Adding the Madonsi Gold Mine to our portfolio of contracted acquisitions has us on track with our stated intention of consolidating the Giyani Greenstone Belt. The Madonsi Gold Mine further complements the large historical resource management is confident is present in the Rock Island transaction, which remains on track to close, and gives us a 7th past producing mine from which to initiate our compilation and exploration activities."
The Transaction will be structured as a purchase by the Company of 100% of the issued and outstanding common shares of Lexshell 845 Investments (Pty) Ltd, which shares are currently held by Nokuthula Ngubeni (the "Seller"). Lexshell 845 Investments (Pty) Ltd. has entered into a sale of shares and claims agreement to acquire 74% of the issued and outstanding common shares of Hectocorp (Pty) Ltd., which has applied for a prospecting right (permit) for gold for the Madonsi Gold Mine to the Minister of Mines and Energy of the Republic of South Africa. The remaining 26% interest in Hectocorp (Pty) Ltd. will on completion of the sale of shares and claims agreement be owned by local South African partners. The transaction is structured in this manner in order to comply with legislated Black Economic Empowerment policies for development of these mineral rights.
As consideration for the acquisition of the interest in the Madonsi Gold Mine, the Company will pay to the Seller a total of $2,000,000, plus a 5% finders' fee to an arm's length party.
The Transaction is subject to certain conditions including governmental and TSX Venture Exchange approval.
About the Giyani Gold Project: This strategic land package covers a key geologically prospective gold region of the world. South Africa is a prolific gold producing country and contains the largest gold reserves of any country globally. Located in the north-east part of South Africa, the Giyani Greenstone Belt represents a historically under-explored region of the country and key industry development initiative for the Chamber of Mines of South Africa. Klein Letaba and Frankie deposits are the largest within the new portfolio of properties in the Giyani Gold Project and management believes that each property displays the potential for a large tonnage, high grade, and shallow mining operation.
The Company's director, Mr. James A. Turner, a Qualified Person as defined by National Instrument 43-101, has read and approved the information contained herein.
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 news release.
ON BEHALF OF THE BOARD
Mr. Duane Parnham, Executive Chairman
This news release contains forward-looking statements regarding the future success of the business of the Company that is subject to risk and uncertainties. Examples of such forward-looking statements including, but are not limited to, statements concerning the Company's acquisition of the interest in the Giyani Gold Project and Madonsi Property, expectations concerning timing and success of the preparation of the NI 43-101 technical report on the Madonsi Property and exploration activities on the Madonsi property and generally, government regulation of exploration and mining operations, indications and benefits of exploration, drilling test work and engineering assessments, environmental risks, title disputes or claims, and the Company's intention to raise additional capital and financing. These forward-looking statements involve known and unknown risk and uncertainties that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied in these forward-looking statements. These risks include risks related to whether or not investors will agree to the escrow release extensions, or that the Company will achieve closing of the transactions, access to historical drilling assay results on the Madonsi Property,dependence on key personnel, competition, risks related to newly acquired businesses, uncertainty and dilution of additional financing and ability to service debt, as well as the risk factors described in the Company's Management Discussion and Analysis filed on SEDAR at [ www.sedar.com ], and the risks to be described in any Management Information Circular. The forward-looking statements contained herein are made as of the date of this news release and are expressly qualified in their entirety by this cautionary statement. Except as required by law, the Company undertakes no obligation to publicly update or revise any such forward-looking statements to reflect any change in its expectations or in events, conditions or circumstances on which any such forward-looking statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.
