The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from CNW Group

Mediterranean Resources signs LOI for acquisition of further exploration properties

Tuesday, May 22, 2012

Mediterranean Resources signs LOI for acquisition of further exploration properties07:45 EDT Tuesday, May 22, 2012VANCOUVER, May 22, 2012 /CNW/ - Mediterranean Resources Ltd. (TSX: MNR; Frankfurt: MHM1) ("Mediterranean" or the "Company") is pleased to announce that it has signed a Letter of Intent with Golden Touch Resources Corp. (TSXV: GOT) ("GOT") to acquire all of the issued and outstanding shares of Golden Touch Resources Australia Pty Ltd, Golden Touch's wholly owned subsidiary.  Golden Touch Australia is the parent company of JAB Resources Ltd. which holds all of the GOT's exploration properties in Albania as set out below (see map at http://www.medresources.ca/news/2012/may22/Golden-Touch-Overview.png):Gold: The Rubik's concession is located in northern Albania. GOT has undertaken an initial drill program aimed at defining the extent of mineralization outlined at the Gjazuj Prospect, 20 kms north of Rubik. Drillhole GJZ 5 intersected 37 metres of gold mineralization averaging 1.67 g/t Au (gold) from 63 - 100 metres. This intersection included 9 metres at 5.1 g/t Au from 63-72 metres and 4 metres at 3.2 g/t Au from 90 - 94 metres and several other smaller gold intervals.  Surface trench sampling by GOT in the Gjazuj Area has defined gold bearing intervals within 1 - 2 metres of the surface of 6 metres at 6.3 g/t Au; 9 metres at 4.6 g/t Au and 9 metres at 3.3 g/t Au. Previous drilling in the area has outlined other high grade intervals which include 7 metres at 9.5 g/t Au; 8 metres at 7.2 g/t Au; 6 metres at 10.4 g/t Au; 5 metres at 6.4 g/t Au, plus some very high grade intersections of 2 metres at 21.8 g/t Au; 1 metre at 29.4 g/t Au and 1 metre at 23.7 g/t Au. All these intersections are at depths below 100 metres.Drilling to date has outlined mineralization over a strike length of 200 metres and 400 metres of up-sequence outcrop. The mineralization is open along strike in both directions and at depth below 100 metres. The mineralization outlined so far coincides with one of five significant gold in soils anomalies along the up-sequence outcrop to the east, stretching over 6 kms.Chromite: The Kukes concession consists of chromite mineralization over an area of about 10 sq. km in northeastern Albania. Within this area there are numerous known small pods of massive or banded chromite mineralization typically grading between 20 - 30% chromite (Cr2O3). These pods or lenses are referred to below as "high grade chromite pods," and the larger ones typically contain up to 1 million tonnes (as indicated by previous drilling and Albanian Government estimates.)High grade chromite pods within JAB's tenements have been the subject of some past mining activity. That activity reached a peak in the 1980's, whilst the State was the main producer. At this time Albania was the world's third largest producer of chromite. Some 1 - 2 million tons of ore has been mined from within the initial GOT tenements. Some of the ore mined (typically >30% Cr2O3) was sold as "direct ship ore", and the rest (typically averaging 20% Cr2O3) was concentrated to a marketable grade by the State during the 1980's. The State operations ceased production with the fall of Communism in the 1990's.Platinum: GOT's exploration efforts thus far have defined platinum group elements (PGE) mineralization within a 6 km long structural shear zone in northeastern Albania. Within this zone the key focus is over a strike length of around 1 km between two outcrops where surface trenching by GOT has defined significant PGE over widths between 5 - 15 metres. The results of the trenching included 14 metres at 1.5 g/t (Pt) Platinum; 11 metres at 1.9 g/t Pt; 5 metres at 2.1 g/t Pt. In addition these intervals include a further 20% of other PGE, mainly palladium and around 20% chromite.Ken Chapple, President of GOT, a Fellow of the Australian Institute of Geoscientists and hence a qualified person under the meaning of Canadian National Instrument 43-101, is responsible for the technical content of this news release relating to GOT's properties.TransactionThe terms of the transaction are that Mediterranean will issue 21.154 million shares to GOT in exchange for 100% of the issued and outstanding shares of Golden Touch Australia Ltd, a corporation registered in Australia, which in turn wholly owns the subsidiaries in Albania that hold 100% of the aforementioned properties. The transaction shall be structured as a plan of arrangement so that the Mediterranean Shares shall be distributed by Mediterranean pro rata (on the basis of one MNR share for every one and one-half GOT shares held) to the GOT shareholders on closing of the transaction.The current major shareholders of GOT include respected North American and European institutions. On signing of the LOI, Mediterranean has agreed to loan $100,000 to GOT, which will be repayable by GOT no later than December 30, 2012. The loan bears interest at 3% per year, calculated monthly. The Loan is to be secured by the GOT's pledge of 100% of the issued and outstanding shares of Golden Touch Australia.If Mediterranean identifies a NI 43-101 compliant measured and indicated resource of at least 500,000 ounces of gold at the Rubik deposit, then GOT shall have the right but not the obligation to back-in for 30% of such deposit upon payment to Mediterranean of 90% of Mediterranean's exploration and development expenditures on such deposit to the date of GOT's exercise of such right.It is the intention of Mediterranean that the chromite assets will eventually be spun off into a standalone vehicle in a distribution to its shareholders. The chromite asset acquired from GOT will be combined with other chromite assets in Albania and elsewhere to make a chromite-specific exploration/mining entity. Albania has long been synonymous with chromite mining but has seen the industry languish in recent times due to lack of investment.Dr. John Clarke, Chairman of Mediterranean, commented that "Mediterranean is very excited to expand its range to the emerging mining province of Albania where close historical ties exist to our current main focus, Turkey."About Mediterranean ResourcesMediterranean acquired an undivided interest in the Tac and Corak properties from Teck Cominco in 2006. Approximately $18 million in cumulative expenditures have been made to date. The Cevreli and Celtik properties were acquired directly by MNR. Mediterranean is well financed for continued exploration.On behalf of the Board of Directors,"Christopher Ecclestone" President and CEONeither Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this News Release.Certain information set out in this News Release constitutes forward-looking information, which may include information relating to the exploration and development of the Company's properties. Forward-looking statements (often, but not always, identified by the use of words such as "expect", "may", "could", "anticipate" or "will" and similar expressions) may describe expectations, opinions or guidance that are not statements of fact and which may be based upon information provided by third parties. Forward-looking statements are based upon the opinions, expectations and estimates of management of the Company as at the date the statements are made and are subject to a variety of known and unknown risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. Those factors include, but are not limited to risks, uncertainties and other factors that are beyond the control of the Company, risks associated with the industry in general, commodity prices and exchange rate changes, operational risks associated with exploration, development and production operations, delays or changes in plans, risks associated with the uncertainty of reserve estimates, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. In light of the risks and uncertainties associated with forward-looking statements, readers are cautioned not to place undue reliance upon forward-looking information. Although the Company believes that the expectations reflected in the forward-looking statements set out in this press release or incorporated herein by reference are reasonable, it can give no assurance that such expectations will prove to have been correct. The forward-looking statements of the Company contained in this News Release, or incorporated herein by reference, are expressly qualified, in their entirety, by this cautionary statement. The Company does not undertake any obligation to update any forward-looking statements or information to reflect information, events, results, circumstances, realities or otherwise after the date on which such statement is made or to reflect the occurrence of unanticipated events, except as required by law.For further information: Christopher Ecclestone President and CEO 604-669-3397 www.medresources.ca