VANCOUVER, BRITISH COLUMBIA--(Marketwired - June 25, 2013) - Duncastle Gold Corp. ("Duncastle") (News - Market indicators)(FRANKFURT:5D3) has closed the sale of the historic Yankee-Dundee Mine to Armex Mining Corp. pursuant to an agreement announced on January 21, 2013. At closing Duncastle received a $50,000 advance royalty as the initial payment on a purchase price which may total about $4 million or more by way of cash and royalty payments depending on mine performance, commodity markets and other factors per the following schedule:
- $50,000 advance royalty payments due on closing, on receipt of a notice of work (permit), and annually thereafter until production;
- $250,000 cash payment on the commencement of production;
- $250,000 cash payment on the anniversary of the commencement of production;
- additional production payments totaling $1 million payable from 30 per cent of net revenues; and
- a 2.5% net smelter royalty with buy-down at $1 million per 1%.
In addition to the above, Duncastle retains back-in rights pursuant to the agreement by which it can re-acquire the project in the event specific production milestones are not met.
The Yankee-Dundee project includes numerous past-producing, high-grade mines including the two largest mines in the Ymir camp, the Yankee Girl and the Ymir mines. The Ymir camp produced 883,000 tonnes of ore at an average grade of 10 g/t gold and 60 g/t silver for a gross total production value of over $500 million (current value), ranking it as the largest silver producing camp in the British Commonwealth for a period during the 1930s. Duncastle consolidated most of the Ymir camp and completed over 7,700 meters of drilling in 48 holes, identifying a high-grade extension of the Yankee Girl mine that is near existing mine workings. Duncastle personnel inspected some of the mine workings in 2006 and found them to be in very good condition. The Armex team is experienced in underground mine rehabilitation and development, and plans to use the historic workings as an inexpensive basis for exploration, expansion and mining activities.
Duncastle President Michael Rowley reported: "Armex Mining has done great work advancing the project in a challenging market. Their plans balance near-term production from less capital intensive operations before expanding into mining deeper underground as the project advances. Their team is well equipped to accomplish this with excellent experience in geology and mine development including environmental regulations and the financial markets. We look forward to seeing the historic mine return to production with benefit to both parties."
Corporate Update
Graham Thatcher has been appointed Chief Financial Officer of the Company to replace Mahesh Liyanage who has resigned such position. The company and the board of directors thank Mr. Liyanage for his service to the company. Mr. Thatcher moved from London, England to Vancouver, British Columbia in 2006. Specializing in financial reporting and auditing across a breadth of business sectors in both the UK and Canada, he brings extensive experience of operating with International Financial Reporting Standards and paperless systems. He is also senior accountant at Manex Resource Group which provides administrative, financial, corporate, corporate finance and geological services to a number of public companies in the mineral resource sector.
About Duncastle Gold
Duncastle Gold Corp. is a Vancouver-based gold exploration company with 100% ownership potential on over 510 square kilometers of projects in Ontario and British Columbia, Canada. In addition to three gold projects in Ontario and its royalty interest in the past-producing Yankee-Dundee Mine in southeast BC, Duncastle controls the highly prospective polymetallic Porphyry Creek project in northwest BC.
As part of the Manex Resource Group, Duncastle benefits from shared expertise in corporate finance, public company administration, investor relations, and technical and geological services provided for seven public companies active in North America. Since its formation in 1997, the Manex Group companies have raised over $350 million in exploration financing.
Rob Macdonald, (P.Geo.), is the Qualified Person responsible for reviewing the technical results in this release.
On behalf of the Board of Directors,
Michael Rowley
President, Director, Duncastle Gold Corp.
This News Release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. These statements are based on a number of assumptions, including, but not limited to, assumptions regarding general economic conditions, interest rates, commodity markets, regulatory and governmental approvals for the company's projects, and the availability of financing for the company's development projects on reasonable terms. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, the timing and receipt of government and regulatory approvals, and continued availability of capital and financing and general economic, market or business conditions. Duncastle Gold Corp. does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.
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.
