Northern Gold and Valgold Announce Agreement to Consolidate 100% Ownership of Garrison Property
(April 7, 2011) - Northern Gold Mining Inc. (TSXV: NGM) and ValGold Resources Ltd. (TSXV: VAL) 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:
- Northern Gold has a right to vote the Northern Gold Shares shares; and
- 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-V: VAL).
About ValGoldValGold 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.
For further information please contact:
Northern Gold Mining Inc.Martin R. Shefsky
President and CEO
Tel: 416.366.7300
Fax: 416.366.7301
Email:
mshefsky@northerngold.caWeb site:
www.northerngold.caValGold Resources Ltd.Stephen J. Wilkinson
President & Chief Executive Officer
Tel: (604) 687-4622
Fax: (604) 687-4212
Email:
info@valgold.comWebsite:
www.valgold.comCAUTIONARY 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.