Reunion Gold Corporation ("Reunion") is pleased to announce that it has entered into an option agreement dated December 1, 2016 with Union Minière de Saül ("UMS"), an arm's length private company. Pursuant to the option agreement Reunion has the right to acquire an 80% interest in the Haute Mana gold project in French Guiana, South America by completing a preliminary economic assessment ("PEA") on the project within a period of five years (the "Option Period").
Haute Mana Gold Project
The Haute Mana gold project consists of eight mining concessions (the "Concessions") covering an area of 121.5 km² in the central-south part of French Guiana, some 170 km SW from the capital city of Cayenne, being accessible by a forest trail and aircraft. Geologically, the region is underlain by a Proterozoic greenstone belt composed of volcano-sedimentary sequences intruded by granitoids and cut by the prominent Sophie-Saul shear zone striking NW-SE and extending for more than 30 km. This is one of the most prolific gold producing area of French Guiana, from at least six "camps" along this shear zone, mostly from artisanal work both in alluvial and primary sources. The region was extensively mapped and explored by the Bureau de Recherches Géologiques et Minières (BRGM) in the eighties, including 4,500 m of auger and 772 m of diamond drilling. Ressources Franc-Or did further exploration work in the nineties, including 79 line kilometres of soil sampling and 1,224 m of diamond drilling. The concession area has seen little other systematic exploration and is considered to have excellent potential for 'shear-type" gold mineralization.
The transaction is subject to requisite regulatory approvals including the approval of the TSX Venture Exchange.
The Option Period will commence upon receipt of all required approvals and UMS having fulfilled two condition precedents consisting of (1) the submission by December 31, 2016 of renewal applications for all Concessions which are expiring on December 31, 2018 and (2) the receipt from the French regulatory authority of a plan describing environmental reclamation work required to be done on the Concessions as a result of past mining activities (the "Plan"). In connection with the work required to be done by UMS under the Plan, the Company has agreed to advance, as a loan to UMS, up to 250,000 euros. The Loan will bear interest at the legal rate in effect in French Guiana at the time of the disbursement. The Loan and accrued interest will be repayable within 60 days of the completion of the PEA. If the Company does not exercise the option, the Loan will be cancelled.
Upon exercise of the option by the Company, the Company will be deemed to have acquired an 80% interest in the Concessions. UMS will then have the option to retain its 20% participating interest or convert its interest in a 5% net profit interest or sell its 20% interest to the Company at a price to be agreed to at that time.
The Company intends to finance the Loan and exploration work to be done on the Concessions during the next few months from the proceeds of the sale of its Matthews Ridge Project (see news release of November 4, 2016). The Company anticipates that the sale of the Matthews Ridge Project will be completed by the end of December 2016.
Carlos Bertoni, P. Geo., a consultant to Reunion and a qualified person pursuant to National Instrument 43-101, has reviewed and approved the scientific and technical data contained in this press release.