Laurentian Goldfields Ltd. ("Laurentian" or the "Company") is pleased to announce it has entered into a Definitive Agreement to acquire a 100% interest in the Newman-Madsen Property from Sabina Gold & Silver Corp. ("Sabina") as previously announced January 14, 2014.
The Newman-Madsen Property consists of 38 patented mining claims and is adjacent to Laurentian's Madsen Gold Project in the prolific Red Lake gold camp. Together, the two properties comprise a land package in excess of 5,000 hectares with numerous advanced exploration targets and former gold producers along the 12 kilometre Madsen Mine Trend.
On closing, Laurentian will issue 6.5 million common shares of the Company to Sabina, which are subject to a statutory four month hold period. Laurentian will also take the necessary steps to appoint Mr. Robert Pease, current President and CEO of Sabina, to Laurentian's Board of Directors. The parties will also enter into an equity participation agreement pursuant to which Sabina will have a right to maintain its equity position. Such right will expire on the earlier of 24 months from the closing date or the date which Sabina ceases to hold at least 3.5% of the shares of Laurentian.
"Acquisition of the Newman-Madsen Property is consistent with Laurentian's strategy of consolidating the Madsen Mine Trend to allow the application of modern day exploration under a single property owner. This acquisition is another step in establishing Laurentian as a leading Red Lake exploration company," stated Darin Labrenz, President and CEO of Laurentian. "I also look forward to having Rob Pease joining the Board of Directors. Rob's capital markets expertise and knowledge of the Red Lake gold camp will be a great compliment to our current board and management team."
Sabina will hold a 6.3% interest in the Company upon closing of the transaction, which is expected in May 2014, and is subject to receipt of all required regulatory and third party consents and satisfaction of customary closing conditions and documentation.
About the Newman-Madsen Property
The consolidation of the Newman-Madsen Property and the Madsen Gold Project into one contiguous land package expands the Company's access to prospective horizons along the Madsen Mine Trend by more than two kilometres, and provides exposure to prospective structural horizons associated with the Buffalo and Laverty deposits.
The Madsen Mine Trend lies along the Balmer and Confederation unconformity, and is the key structural break that hosts the past producing Madsen and Starratt-Olsen gold deposits. Mineralization has been previously identified at Newman-Madsen along the structural break, with wide spaced drilling in 2010 returning 43.51 g/t gold over 0.65 m, and earlier drilling in 2006 returning 22.57 g/t gold over 2.0 m. (See news release of Sabina Gold & Silver Corp. dated January 27, 2011.)
The Western Buffalo Trend is characterized by geochemical anomalies that are on trend with the projected extension of mineralization associated with Laurentian's Buffalo Mine. Historic drilling on this trend targeted mineralization along the intrusive/volcanic contact returning 9.24 g/t gold over 3.55 m in hole RLK-02-05. (See news release of Wolfden Resources Inc. dated January 8, 2002.)
The Laverty trend, on the northern section of the property, is characterized by a sequence of folded mafic and ultramafic rocks that are considered prospective for Red Lake 'HGZ', or Zone 8 gold style mineralization.
Laurentian Strengthens Management Team
Laurentian is also pleased to announce that it has enhanced its management team and financial oversight with the appointment of Mr. Sean Tetzlaff to Chief Financial Officer. Mr. Tetzlaff is an experienced financial professional with over 18 years of experience in the mining industry. Recently he served as Chief Financial Officer and Corporate Secretary of Blue Gold Mining, which merged with Riverstone Resources in 2012 to become True Gold Mining. He also served as CFO, VP Finance and Corporate Secretary of Fronteer Gold from 2005 to 2011. Mr. Tetzlaff has a tax background, having worked with KPMG LLP from 2000 to 2004. He is currently the CFO of True North Nickel, a private nickel explorer, and a Director and Chair of the Audit Committee of Pilot Gold.
Laurentian has also appointed Mr. Blaine Monaghan as Director of Investor Relations. Mr. Monaghan has over 12 years of experience in the mineral exploration industry, most recently as VP, Corporate Development for Camino Minerals Corp., and previously Director, Investor Relations for Canplats Resources Corp., which was acquired in 2010 by Goldcorp Inc. for C$300-million. Mr. Monaghan will be responsible for overseeing Laurentian's investor relations program, providing enriched communication and developing relationships with both shareholders and capital markets.
The newly appointed officer and employee will be granted incentive stock options exercisable to purchase up to 300,000 common shares in the capital of the Company until May 13, 2019 at an exercise price of $0.32 per share. The incentive stock options were granted in accordance with Laurentian's Stock Option Plan and are subject to vesting provisions.
Darren O'Brien, P.Geo., and the Vice President, Exploration for the Company, is the designated Qualified Person for this news release within the meaning of National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") and has reviewed and verified that the technical information contained in this release is accurate and approves of the written disclosure of same.
About Laurentian Goldfields Ltd.
Laurentian is led by a management team and board that comprise established mining professionals with extensive knowledge of Red Lake, and proven technical and capital markets expertise. The management and board are committed to generating exceptional shareholder growth through the exploration and development of the high-grade gold Madsen Gold Project in the prolific Red Lake gold camp of Northwestern Ontario. Laurentian intends to become a leading exploration company by unlocking the value in numerous advanced-stage exploration targets and previous gold producers along the 12 kilometre Madsen Mine Trend.
ON BEHALF OF THE BOARD OF DIRECTORS,
Darin Labrenz, P.Geo., President and CEO