VANCOUVER, Sept. 2 /CNW/ - Medallion Resources Ltd (TSX.V: MDL) announced
today that it has optioned from privately held Romaine River Titanium Inc.,
the right to acquire a 100% legal and beneficial interest ("Option") in the
Everett iron-titanium property ("Property"). The Property consists of
59 claims, located three kilometres east of the Rio Tinto-owned Lac Allard
iron-titanium mine in Duplessis County, Quebec. The Everett Property is
potentially one of the world's largest iron-titanium occurrences with a
historical 234-million-tonne estimated resource(*).
President William Bird reports, "The Everett Property, represents an
exceptional opportunity for Medallion shareholders and it's rare that a
project of this magnitude is available to any company."
About the Everett Iron-Titanium Property
Historical drilling and metallurgical work support the Everett Property's
historical resource estimate of 234 million tonnes grading 10.8% titanium
oxide (TiO(2)) and 17.9% iron.(*) The body of iron-titanium mineralization
outcrops along a known length of 2.3 kilometres and a width that ranges from
180 metres to 485 metres. It is open along strike and down dip.
The Everett Property minerals are hematite (Fe(2)O(3)) and ilmenite
(FeTiO(3)), which also are the minerals mined at the QIT Lac Allard mine. The
QIT mine, owned by Rio Tinto and presently the largest of its type, is a
leading producer of high-quality titanium and steel products.
(*) The historical resource estimate and the Everett Property reports
supporting the estimate were prepared before the introduction of National
Instrument 43-101- Standards of Disclosure for Mineral Projects ("NI 43-101").
They may not be relied upon until they are confirmed using methods and
standards that comply with those required by NI 43-101. The potential for the
Everett Property mineralization to replicate the historical resource estimate,
or for new data to expand its tonnage and grade, is conceptual and is based on
historical reports, which cite approximate lengths, widths, depths, grades,
metallurgical test work and projections of the historical resource. Investors
are cautioned that a qualified person has not yet completed sufficient
exploration, test work or examination of past work to define a resource that
is currently compliant with NI 43-101. The Company further cautions that there
is a risk that exploration and test work will not result in the delineation of
such a currently compliant resource. Neither the Company nor its personnel
treat the historical resource estimate or the historical data as defining a
current mineral resource, as defined under NI 43-101, nor do they rely upon
the estimate or the data for evaluation purposes; however, these data are
considered relevant and will be used to guide exploration as the Company
develops new data to support a current mineral-resource estimates in
accordance with the requirements of NI 43-101.
Terms of Option Acquisition
In consideration of the grant of the Option, the Company has agreed,
among other things, to pay to RRT $50,000 and issue 100,000 common shares to
RRT (the "Initial Payments") on or before 120 days following the date of the
LOI. The parties have agreed to prepare and execute a definitive option
agreement, which will replace the LOI. The LOI and the Option are subject to
due diligence, the acceptance of the TSX Venture Exchange and the approval of
the shareholders of RRT.
On or before 31 December 2012, in order to maintain the right to exercise
the Option and acquire a 100% interest in the Everett Property, Medallion is
required to pay to RRT in installments an aggregate of $450,000, issue to RRT
an aggregate of 800,000 Medallion Shares and incur an aggregate of $6,000,000
in optional expenditures on the Everett Property (collectively, the "Option
Payments"). These expenditures include an obligation that Medallion incurs an
aggregate of $750,000 in expenditures on the Property on or before 31 December
2009 and produce a technical report in accordance with National Instrument
43-101 to confirm measured and/or indicated mineral resources on the Property.
The LOI permits Medallion to extend the term of the Option to 31 August 2013,
in the event that Medallion defers a portion of the required expenditures due
by 31 December 2012 and agrees to expend the deferred shortfall, plus a
premium, by 31 August 2013. In the event that Medallion wants to exercise the
Option at an earlier date, Medallion has the right to complete the Option
Payments at any time prior to the required dates set out in the LOI. The
Everett Property is not subject to any royalties.
On completion of the above mentioned Initial Payments and Option Payments
and provided that Medallion has not less than $4,000,000 in working capital in
hand and no long-term unconvertible debt, Medallion will have the right to
exercise the Option and acquire the Everett Property by paying to RRT an
additional $1 million and by issuing to RRT that number of Medallion Shares so
that RRT will then hold, inclusive of all shares previously issued to RRT, an
aggregate of 50% of the then issued and outstanding Medallion Shares.
Medallion will grant to RRT the right to acquire, for no additional
consideration, a proportion of the number of Medallion Shares which are
subsequently issued upon exercise of any warrants of Medallion outstanding at
the date of the exercise of the Option based on the extent to which such
warrants are in the money when exercised. Medallion will also grant the right
to acquire, for no additional consideration, such number of Medallion Shares
as is equal to the number of any Medallion Shares that are subsequently issued
upon conversion of any special warrants, subscription receipts and convertible
debt instruments of Medallion (excluding stock options), which are outstanding
at the date of the exercise of the Option.
Prior to the exercise of the Option, Medallion has also granted to RRT
the right to acquire up to 10% of the securities issued in any equity
financing of Medallion on the terms and conditions applicable to other
investors in such financing.
Medallion has also agreed upon execution of the definitive agreement to
appoint one nominee of RRT to the board of directors of Medallion, and upon
exercise of the Option to appoint nominees of RRT to comprise 50% of the
members of the board of directors of Medallion, subject to regulatory
ON BEHALF OF THE BOARD OF DIRECTORS
"William H Bird", PhD, PGeo, President & CEO
William H. Bird, PhD, PGeo, serves the Board of Directors of the Company
as an internal, technically Qualified Person. Technical information in this
news release has been reviewed by Dr Bird and prepared in accordance with
Canadian regulatory requirements as set out in National Instrument 43-101.
Company Management, which takes full responsibility for content, prepared this
news release. The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release. Some of the
statements contained in this release are forward-looking statements, such as
estimates and statements that describe the Company's future exploration and
financing plans, objectives or goals, including words to the effect that the
Company or management expects a stated condition or result to occur. Since
forward-looking statements address future events and conditions, by their very
nature, they involve inherent risks and uncertainties. Actual results in each
case could differ materially from those currently anticipated in these
statements. Such risks include expectations that may be raised by discussing
potential mine types and by comparing the Company's projects to other
projects. Also, in order to proceed with the Company's exploration and
acquisition plans, additional funding is necessary and, depending on market
conditions, this funding may not be forthcoming on a schedule or on terms that
facilitate the Company's plans.
For further information:
For further information: check the website www.medallionresources.com or
contact: William H Bird, (888) 827-6611, email@example.com; David Fry, (888)
827-6611, firstname.lastname@example.org; Wayne Marsden, (888) 366-4464,