KENAI ANNOUNCES
PRIVATE PLACEMENT WITH ELDORADO GOLD CORP. PARTICIPATION
Kenai Resources
Ltd. has negotiated, subject to the acceptance by the TSX Venture Exchange, a
non-brokered private placement of up to 35 million units at a price of 10 cents
per unit. Each Unit will be comprised of one common share and one-half of one
common share purchase warrant, of which one whole warrant will entitle the
holder to purchase one additional common share at a price of $0.125 for a
period a twelve months from the closing of the private placement. Eldorado Gold
Corp. has committed to subscribing for 15,000,000 Units of the private
placement which, upon exercise of the attached warrants, would represent
approximately19.6% of the then issued capital of Kenai. Finder's fees may be
payable on a portion of the private placement, in accordance with the policies
of the TSX Venture Exchange.
The net
proceeds will be used to prepare the Sao Chico project for trial mining and
processing of 50,000 tons of high grade gold bearing material over an initial
12 month period. Kenai is applying for and expects to be granted a trial mining
licence from appropriate Brazilian authorities. Kenai is also preparing a NI
43-101 compliant Mineral Resources estimate, assembling various reports
associated with the trial mining licence grant and in discussions regarding the
required development finance. Additional infill drilling may be undertaken
during the development stage. Further details associated with on-going drilling
and production commencement will be provided in separate news releases.
Under a
recently entered into letter agreement (the "Agreement") with
ASX-listed Gold Anomaly Ltd ("GOA"), Kenai is acquiring 100% of GOA's
wholly-owned subsidiary, Gold Aura do Brasil Mineracao Ltda ("GOAB"),
which holds 100% of the Sao Chico gold project mineral rights located along a
prominent NW-SE trend which is the most mineralized zone within the Tapajos
Mineral Field in central-northern Brazil. The consideration payable by Kenai
includes: a) forgiveness of an existing loan of AUD$3,500,000 due to Kenai from
GOA which is part of cash advances made by Kenai for the Sao Chico gold
project; b) issuance of 10 million common shares of Kenai following regulatory
and related approvals, with such shares subject to a 12 month non-trading hold
period; and, c) the issuance of an additional 6 million Kenai common shares
when one of several development milestones are achieved for the Sao Chico
project such as completion of a bankable feasibility study. Under the terms of
the Agreement, Kenai has no other obligations to GOA.
About the Sao
Chico, Brazil project
The Sao Chico
gold project is located along a prominent NW-SE trend which is the most
mineralized zone within the Tapajos Mineral Field in central-northern Brazil.
The Tapajos field was the site of the biggest gold rush in Brazilian history in
the late 1970's and 1980s when approximately 500,000 garimpeiros (artisanal
miners) rushed to the area to exploit extensive areas of newly discovered
alluvial gold. Approximately 20 to 30 million ounces of gold (unofficial
government figures) were produced from these operations before the easily won
alluvial gold deposits were largely depleted. The garimpeiros have little
expertise in underground mining and environmental considerations and were thus
urged by the government to consolidate their small claims and form joint
ventures with established mining companies. The area has had little exploration
by modern exploration methods compared to other equivalent gold fields in the
world. Kenai has recently completed an initial 3,268 meters, 22 hole Diamond drilling program, confirming a 530 meter strike
length high grade gold zone at the Sao Chico project which is held by GOAB.
Kenai's Vice
President Technical Services, Neil Cole, is responsible for technical
information in this news release. Mr Cole has sufficient experience which is
relevant to the style of mineralization under consideration and to the activity
which is being undertaken and planned to qualify as a Qualified Person under NI
43-101. Mr Cole has verified the technical data disclosed in this release, including
references to planned exploration and operational activities, and the sampling
of the gold-bearing reef structures. Mr Cole has consented to the inclusion in
this release of such technical information in the form
and context in which it appears.
We seek
Safe Harbor.