Dec 15 2010
Augen Gold Corp. (TSX VENTURE:GLD) announced today that it has entered into a letter of intent effective December 14, 2010, with Vancouver-based Sanatana Diamonds Inc. (TSX VENTURE:STA) a well-managed emerging resource company, for a proposed Option and Joint Venture Agreement to acquire up to 51% undivided interest in the rights to certain mineral claims in Chester, Yeo, Neville, and Benneweis townships in Ontario.
These claims exclude those depicted in the map entitled "WCoté with Planned Drill Holes" where a current 18 DDH program is underway, although Sanatana has been granted a first right of refusal on these claims should GLD decide to enter into a joint venture on them.
"The main claims in this LOI are in areas that have exellent potential, but are unlikely to be a major focus for Augen Gold for the next few years," said J. David Mason, president and CEO of Augen Gold. "In our opinion, this is an excellent agreement for GLD and will prevent unnecessary dilution while supporting the company's intense focus on its four main targets.
Sanatana has agreed to spend $5 million on these claims over the next three years and provide cash plus 5,000,000 shares in Sanatana as payment for the option. The proposed Agreement is subject to, among other things, the completion of satisfactory due diligence, the negotiation and execution of a definitive agreement, approval of the boards of both parties, and approval of the TSX-V; the parties have agreed to execute this definitive agreement on or before February 15, 2011. The proposed Agreement is an arm's-length transaction and is not expected to require shareholder ratification.
Augen Gold has been successful in raising approximately $9.1 million in 2010 and is focused on achieving its exploration milestones. Since inception in October 2006, the Company has raised more than $20 million for the South Swayze Project.
Source: Augen Gold Corp.