TORONTO, March 24 /CNW/ - Win-Eldrich Gold Inc. ("WEG"), a wholly owned subsidiary of Win-Eldrich Mines Limited ("WEX") (TSXV:WEX), and American Mining Corporation ("AMC"), a Nevada corporation, are pleased to announce they have entered into a Letter of Intent ("LOI") in which the two companies agreed to create a new Limited Liability Company ("LLC") for the purposes of expanding the existing 100 ton per day mill to a 200 ton per day mill. The expanded facility will provide the ability to process the historic gold resource at Ashdown identified in several historical reports and will operate as a regional custom milling facility. The Ashdown historical gold resource has not been verified as a current resource, a feasibility study has not been completed and there is no certainty that the proposed operation will be economically viable.
The terms of the LOI are as follows:
- Each company will own 50% of the new LLC.
- AMC will make a $500,000 initial payment to WEG.
- AMC will make a $1,500,000 payment to WEG upon execution of the definitive agreement (90 days).
- AMC will contribute a 100 ton per day gold circuit to the LLC to double production at Ashdown.
- WEG will contribute the permitted and operating Ashdown flotation mill to the LLC.
- The two companies will share costs and net profit from the sale of recovered gold and other metals based on their ownership interest in the LLC.
The LLC will be responsible for the costs of completing the permitting, installation and commissioning of the modified and expanded mill. When completed, the capacity of the Ashdown Mill facility will be 200 tons per day.
Perry Muller, CEO of Win-Eldrich, comments that "sustained high gold prices have encouraged WEX to pursue development of the historic gold resource at Ashdown in addition to continuation of profitable molybdenum sulfide concentrate production. The LOI with AMC also allows WEX to satisfy its commitments to creditors and to expand operations for the benefit of our shareholders. We are looking forward to working with AMC."
Gary MacDonald, CEO of American Mining states that "we look forward to working with Win-Eldrich as through our assessment of the Ashdown facility, we have seen an experienced team that is dedicated to minimizing operating costs and increasing metal production. This opportunity furthers AMC's business model of acquiring and operating regional custom-milling centers in Nevada. Our custom mills focus on processing gold ores that enhance mill profitability for the benefit of our clients and stakeholders."
Versatech Capital For Mining (www.versatechcapitalformining.com), a boutique mine financing firm, has been an advisor and source of funding for this LOI. Versatech's contact is George Petker at (775) 830-3401.
This news release includes certain forward-looking information and forward-looking statements (collectively "forward looking statements") concerning the future performance of our business, its operations and its financial performance and condition, as well as management's objectives, strategies, beliefs and intentions. Forward-looking statements are frequently identified by such words as "may", "will", "plan", "expect", "anticipate", "estimate", "intend" and similar words referring to future events and results, including in respect of the increase in production levels at the Ashdown mine. Forward-looking statements are based on the current opinions and expectations of management. All forward-looking statements are inherently uncertain and subject to a variety of risks and uncertainties, including the speculative nature of mineral exploration and development generally and specifically in respect of the interpretation of the geology, continuity, grade and size of mineral deposits, unanticipated operational or technical difficulties, fluctuating commodity prices, competitive risks and the availability of financing, changes in laws or regulations, changes in the financial markets and changes in general economic conditions, as described in more detail in our recent securities filings available at www.sedar.com. Such forward-looking statements are based on a number of assumptions, including but not limited to the level and volatility of the price of molybdenum, the availability of financing, the accuracy of reserve and resource estimates and the assumptions on which those estimates are based and the ability to achieve and maintain certain operational efficiencies. Should one or more risks and uncertainties materialize or should any assumptions prove incorrect, then actual events or results may differ materially from those expressed or implied in the forward looking-statements and we caution against placing undue reliance thereon. We assume no obligation to revise or update these forward-looking statements, except as required by applicable law.
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