|June 16, 2011|
Angus Mining to Acquire a Majority Stake in Nevada Precious Metals Exploration Company, Silver Reef Resources
|Angus Mining (Namibia) Inc. ("Angus" or the "Company") (TSX Venture: ANA) and Elgin Mining Inc ("Elgin" or the "Vendor") (TSX Venture: ELG) are pleased to announce that they have entered into a definitive agreement, pursuant to which Angus will acquire Elgin's 68% interest in the undiluted share capital of Silver Reef Resources Ltd. ("Silver Reef"), a privately held company incorporated under the laws of British Columbia, through the purchase of 20,500,000 units of Silver Reef. In consideration, Angus will pay Elgin $1,000,000 in cash and issue $1,500,000 in equity, or 4,411,764 Angus common shares based on 5 day trailing volume weighted average price of $0.34 per share. The Silver Reef units to be acquired by Angus each consist of one common share or Silver Reef and one warrant, 18,000,000 warrants are exercisable for $0.15 per Silver Reef Share and 2,500,000 warrants are exercisable for $0.25. The transaction is expected to close in July, 2011 and is subject to, among other things, approval by the TSX Venture Exchange, and the Company obtaining the equity or debt financing necessary to satisfy the cash consideration of the acquisition and the completion of satisfactory due diligence.|
Silver Reef is a privately held precious metals exploration company with operations based in Central Nevada, USA. Silver Reef has the option to earn a 100% interest in 8 properties covering in excess of 14,000 acres, which include several small past-producing open pit mines, shafts with underground workings, and other indications of economic mineralization. All of the optioned properties have been drilled historically, and Silver Reef is in the process of compiling drilling data, and completing NI 43-101 technical reports on four of the largest claim packages.
Two of the projects, Reveille and Freiburg, supported small-scale, high-grade silver production as recently as the early 1980's, however were shut down as the result of declining commodity prices. Geotech Ltd. has completed airborne geophysical studies of both projects, which Silver Reef has used to prioritize targets for a phase 1 drilling campaign scheduled to begin in Q3, 2011. Management of both Silver Reef and Angus Mining believe that there is great potential at Reveille and Freiburg, and target to bring these projects to development and production rapidly following the definition of mineral resources, if any are defined.
In order to earn a 100% interest in Reveille, Silver Reef must make cash payments of up to $1.25 million and incur $7.5 million in mining work expenditures by August 15, 2013 and issue up to 5,000,000 shares upon the occurrence of certain events. The property will also be subject to certain royalties. With respect to Freiburg and other claims, Silver Reef may earn a 100% by spending an aggregate of $5 million and making certain additional cash payments and subject to certain royalties. Silver Reef has spent approximately $1 million to date in the earn in process.
The geology of each project is similar; intrusive rocks having intruded overlying sediments, primarily dolomites and quartzites, with mineralizing solutions depositing silver, gold and to a lesser extent lead and zinc, as stockwork veins, breccias, and replacement deposits. At surface, much of the mineralization is oxidized, transcending into deeper sulphide mineralization as evidenced by historical workings.
Silver Reef is managed by a team of professional Geologists including George Nicholson, a private consultant with extensive experience in intrusive related ore bodies, and Gary Deschutter, a former senior Geologist with Falconbridge and, more recently Anglo American.
Silver Reef is currently financed through the first stage of drilling at Reveille and Frieburg.
Fraser Buchan, Angus Mining CEO commented; "The Silver Reef acquisition represents an important step forward in Angus Mining's plans to deliver resource growth in the precious metals sector, and ultimately production. Silver Reef is earning into a portfolio of projects that have the potential to generate high grade, high quality resources, in a sector that we believe will outperform. When combined with the Ondundu Gold Project in Namibia, the Company will have a diversified portfolio of projects, and solid prospects for increasing shareholder value."
Brian Morales, Elgin Mining CFO commented; "This transaction is consistent with Elgin's strategy to focus on more advanced stage projects, specifically the recently announced agreement to acquire the Lupin gold mine and Ulu gold deposit as well as the Oro Cruz and La Bufa projects. The transaction provides Elgin with an immediate return on its investment in Silver Reef and cash which will be used to advance the aforementioned projects. At the same time Elgin will be able to participate in the potential of the Ondundu Gold project and we believe that in the capable hands of Angus, a company focused earlier stage projects, that Silver Reef can be advanced and value can be created."
Pursuant to the early warning requirements of National Instrument 62-103, Elgin is required to report certain information with respect to its holdings of securities of Angus. Upon completion of the transaction, Elgin will hold an aggregate of 4,411,764 Angus common shares representing 12.4% of the outstanding capital of Angus on an undiluted basis (Note: disclosure regarding the percentage of outstanding Angus common shares held by Elgin is based on information provided by Angus).
The securities will be acquired by Elgin for investment purposes. Elgin will evaluate its investment in Angus from time to time and may, based on such evaluation of market conditions and other circumstances, increase or decrease shareholdings in Angus as circumstances require. For further information and to obtain a copy of the early warning report filed under applicable Canadian provincial securities legislation in connection with the transactions hereunder, please go to the Angus profile on the SEDAR website www.sedar.com or contact Elgin at the telephone number specified below.
Robert Buchan is a director and the Chairman of both Angus and Elgin. Mr. Buchan also holds 2,580,000 Angus common shares and 2,580,000 Angus warrants and directly and indirectly owns 3,228,098 common shares of Elgin. The transaction is considered as being a non-arm's length transaction subject to the requirements of the TSX Venture Exchange. The transaction has been approved by the independent directors of Angus and Elgin.
Angus Mining (Namibia) Inc. is a Canadian based precious metals exploration company focused on developing the Ondundu Gold Project in West-Central Namibia via a joint venture agreement with Forsys Metals Corp. The Company's goal is to deliver superior shareholder returns by identifying, acquiring and developing high quality assets in a safe and socially responsible manner. Angus Mining is committed to providing economic and social benefit to the Namibian community through the responsible development of mining assets in the Country.
For further information on Angus please
Fraser Buchan: President and CEO
Elgin Mining Inc. has approximately $46 million in cash available to complete the acquisitions of the Lupin Gold Mine and Ulu gold deposit as well as to commence aggressive exploration and development programs on each and to meet its obligations with respect to its recently announced option agreement with Lincoln Mining Corp.
For further information on Elgin please
Brian Morales: Chief Financial Officer:
Certain information set forth in this press release contains "forward-looking statements" and "forward-looking information" under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forwardlooking statements which include management's assessment of Elgin's and Angus' future plans and operations and are based on each company's current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. Some of the forward-looking statements may be identified by words such as "expects" "anticipates", "believes", "projects", "plans", and similar expressions. These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Elgin's and Angus' actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Elgin and Angus undertake no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
You can view the Next News Releases item: Fri Jul 8, 2011, Elgin Mining Acquires Lupin Gold Mine and Ulu Gold Deposit and Appoints Patrick Downey as President and Chief Executive Officer
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