TORONTO, May 20, 2011 /CNW/ - Cadman Resources Inc. (CUZ.P:TSX-V) (the "Company" or "Cadman") is pleased to announce that the Company has entered into an arm's-length non-binding letter of intent (the "LOI") with Q-Gold Resources Ltd. ("Q-Gold") (QGR:TSX-V) dated as of May 4, 2011, whereby Cadman will, subject to
a number of conditions, acquire a fifty-five percent (55%) interest
(the "Interest") in Q-Gold's Golden Star and Baseline Nugget Claims Project (the "Project"). The transaction will constitute the Company's qualifying transaction
("QT") under the policies of the TSX Venture Exchange (the "Exchange"). The Golden Star and Baseline Nugget Claims Project is a gold
exploration project located in the historic gold camp of Mine Centre in
Northwestern Ontario. The Company has received and reviewed a NI 43-101
compliant technical report prepared by Independent Qualified Person,
Richard Beard, P.Eng. on the Golden Star project located in the
historic gold camp of Mine Centre in north-western Ontario dated May
13, 2011 (the "Report").
Terms of the Agreement
Cadman has agreed to work towards a definitive agreement with Q-Gold
which agreement will include the following terms and conditions:
Cadman will pay Q-Gold $275,000 and issue Q-Gold 1,000,000 common shares
in the capital of Cadman (each a "Common Share") on the closing date in exchange for the Interest;
Cadman will also commit to expend $600,000 on the Project; a minimum of
$250,000 to be expended within the first 12 months after the closing
date and the balance prior to that date which is 24 months after the
closing date, such expenditures to be made in accordance with a
National Instrument 43-101 - Standards of Disclosure for Mineral Projects compliant technical report; and
Final agreement is conditional on completion of satisfactory due
diligence by Cadman and receipt of all other necessary corporate,
regulatory and securities law approvals, including Exchange approval to
the listing of the Common Shares on the Exchange.
Property Description and Exploration Highlights
The following information has been obtained from the Report.
The Project consists of two blocks of mining claims, leases and patents
that are 1.5 kilometers apart: the Golden Star Block and the
Baseline/Nugget Block. The Project is located near Mine Centre in
Northwestern Ontario, 65 km east of Fort Frances, Ontario. The Golden
Star Block consists of three mining leases and several mining patents.
A total of 36 claim units comprise an area of 535.91 Ha (1324.3 acres).
The Baseline/Nugget Vein block consists of 10 un-patented mining claims
comprising an area of approximately 160 Ha (400 acres). Total area of
the two blocks is 695.91 Ha. All the claims, leases and patents are
subject to a 2% NSR, payable to previous owners.
The Golden Star Block hosts the former Golden Star Mine, a past producing mine that was
developed on seven levels to a depth of 547 feet (167 m) during the
period 1898-1901. During the periods 1898-1901, 1934, 1938, and 1941, 10,758 ounces of gold and 34 ounces of silver were recovered from 19,345 tons of ore, for an average grade of 0.56 ounces per ton milled.
The Baseline/Nugget Block is situated 1.5 kilometres south of the Golden
Star Block and 2 kilometres north of the past producing Foley Mine
The Baseline Vein, on surface, varies in width from less than 0.5 metres up to 2.5
metres, averaging about 1 metre and extends over 110 metres to the
east-southeast. Historic grid sampling of the blasted rock from the
Baseline Vein in 2008 resulted in a weighted average grade of 8.4
grams/tonne Au from 105 samples (424 Kg) obtained over a 50-metre
length of the central portion of the vein . Weighted average grade for
silver assays returned 9.66 g/T from 90 samples (367 Kg).
The Nugget Vein is located approximately 500 metres northeast of the Baseline Vein and
consists of a north-northwest (335 deg.) trending steeply dipping vein
that extends for over 100 metres. Previous sampling results include a
small 160 tonne bulk sample that showed results of 3.8 g/tonne gold and
a 70-kilogram sample that showed 8.99 g/tonne gold. Recent work
carried out on the Golden Star Block by Q-Gold since 2006 includes
airborne geophysics, ground geophysics, limited surface sampling, and
diamond drilling. Recent work by Q-Gold on the Baseline/Nugget Block
includes airborne geophysics, ground geophysics, extensive trenching,
drilling, blasting and sampling, bulk sampling, and diamond drilling.
There are also a number of gold-bearing quartz and quartz-carbonate
veins on the Project that have not been explored in detail.
Concurrent Non-Brokered Private Placement
Concurrent with the proposed QT, Cadman intends to complete a
non-brokered private placement for gross proceeds of up to $1,500,000
through the sale of units and Flow-through units. The Flow through
units include common shares for which the Company has renounced certain
expenditures and thus allow the investor to write off the entire amount
of the investment as an income tax deduction.
Cadman will issue up to 3,200,000 units for $0.25 each, each unit
comprised of one Common Share and one half of one Common Share purchase
warrant, each full warrant exercisable at a price of $0.35 for one
Common Share within 18 months from the date of issuance. Cadman will
also issue up to 2,121,213 Flow-though units for a price of $0.33 each,
each Flow-through unit exercisable for one Flow-through Common Share
and one half of one Common Share purchase warrant, each full warrant
exercisable at a price of $0.35 for one Common Share within 18 months
from the date of issuance. The proceeds will be used to finance
acquisition costs and exploration work in connection the Project, and
for general working capital purposes. A finder's fee, in accordance
with the policies of the Exchange, may be payable in cash and/or
securities of Cadman with respect to the QT.
Conditions to Closing of QT
The closing of the QT is subject to a number of conditions, including,
but not limited to, the following:
Completing a private placement that raises gross proceeds of a maximum
Completion or waiver of sponsorship;
Receipt of all required corporate, regulatory and securities law
Cadman meeting Exchange Tier 2 listing requirements for a mining issuer;
Completion of Cadman's due diligence review.
Cadman intends to apply for an exemption from Exchange sponsorship
Trading in the common shares of Cadman will remain halted pending the
release of further disclosure regarding this QT and the satisfaction of
the initial filing requirements of the Exchange and a preliminary
review by the Exchange. If the Exchange conditions to the closing of
the QT are not been satisfied, the QT will be abandoned. The QT is not
a Non-Arm's Length QT and is not subject to shareholder approval.
Following completion of the QT it is anticipated that the directors and
officers of Cadman will remain unchanged: Derek Bartlett (Director and
CEO), Alex Johnston (Director and CFO), Andrew Mah (Director and
Chairman of the Board) and Patrick Brandreth (Director). It is not
anticipated that any 10% shareholders will be created.
About Q-Gold Resources Ltd.
Q-Gold is a is a Canadian-based mineral exploration company currently
exploring for precious and base metals in Ontario and Arizona. It is
listed on the Exchange with the symbol QGR. Further information on
Q-Gold is available at http://www.qgoldresources.com/ and on its profile at www.sedar.com.
Certain information in this press release may constitute forward-looking
information. This information is based on current expectations that are
subject to significant risks and uncertainties that are difficult to
predict. Actual results might differ materially from results suggested
in any forward-looking statements. The Corporation assumes no
obligation to update the forward-looking statements, or to update the
reasons why actual results could differ from those reflected in the
forward looking-statements unless and until required by securities laws
applicable to the Corporation. Additional information identifying risks
and uncertainties is contained in the Corporation's filings with the
Canadian securities regulators, which filings are available at www.sedar.com.
Investors are cautioned that, except as disclosed in the filing
statement to be prepared in connection with the QT, any information
released or received with respect to this QT may not be accurate or
complete and should not be relied upon. Trading in the securities of a
capital pool company should be considered highly speculative.
All information contained in this news release with respect to Q-Gold
was supplied entirely by Q-Gold for inclusion herein. Richard Beard is the qualified person who supervised the preparation of
the information that forms the basis for this written disclosure.
The TSX Venture Exchange has in no way passed upon the merits of the
proposed transaction described herein and has neither approved nor
disapproved the contents of this news release.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE Cadman Resources Inc.
For further information:
Derek Bartlett, Chief Executive Officer, at: