Feb 24 2011
Kestrel Gold Inc. (TSX VENTURE:KGC) has announced that the Corporation has entered into a definitive share purchase agreement to acquire all of the issued and outstanding shares of Rio Diablillos (S.R.L.) in consideration of the issuance of 2,000,000 common shares of the Corporation over a period of 18 months.
(See news release dated September 15, 2010). Rio is a private corporation, incorporated under the laws of Argentina. The Agreement is subject to both the satisfactory meeting of certain closing conditions customary to transactions of the nature of the Acquisition, and applicable regulatory body approvals, including the approval of the TSX Venture Exchange. The Corporation anticipates closing of the Acquisition in the near future.
As stated in the news release of September 15, 2010, Rio holds an option and right to acquire one hundred (100%) percent interest in 32 mining claims located in the Andean Pre-Cordillera of San Juan Province, Argentina (the "Huachi Mining Property"). The Corporation has obtained a National Instrument 43-101 compliant technical report with respect to the Huachi Mining Property (the "Technical Report"), which will be filed with the applicable regulatory authorities and on SEDAR upon the closing of the Acquisition.
Pursuant to a loan agreement between the Corporation and Rio, the Corporation has agreed to loan up to US$3,000,000 to Rio for the exclusive purpose of performing mining exploration activities in Argentina, acquiring mining concession rights in Argentina, mining exploration and prospecting costs, purchasing mining exploitation rights in Argentina or costs related to those mining activities (the "Loan"). As of the date of this news release, the Corporation has loaned US$350,000 to Rio. The Loan is to be repaid over a 30 month period commencing in August 2012, with interest at a rate of 2% per annum, and is secured against all of the issued and outstanding shares of Rio.
Highlights of the Technical Report
Stephen de Wit, P.Geo and William Gilmour, P.Geo of Discovery Consultants ("Discovery Consultants"), an independent, geosciences and exploration consulting firm, were retained by Kestrel to prepare an independent technical report on the Huachi Mining Property. As part of the Technical Report, twenty-five rock samples were collected by Mr. de Wit in October 2010. The samples consisted of outcrop and float material and grab samples. All 25 rock samples returned with gold values, ranging from 0.03g/t to 52.3g/t Au, with notable quantities of silver and lead.
Huachi Mining Properties
The Huachi Mining Property is located within the Huachi mining district in northern San Juan Province, Argentina, about 135 km due north of the city of San Juan, and 40 km northwest of the small town of San Jose de Jachal. The Huachi Mining Property is comprised of 32 mining tenures that cover 462 hectares. Mining in the Huachi valley extends back to pre-Columbian times indicated by the presence of ancient Incan mining tools in the region. Throughout this history there has been gold mining activity, ranging from small artisanal miners to small-scale mechanized operations in the 1960s. The Huachi Mining Property contains copper gold sulphide mineralization that was deposited in an environment that transitions from the basal roots of a low to intermediate sulphidation epithermal to a subvolcanic copper porphyry environment at depth.
Source: Kestrel Gold Inc.