TORONTO, Feb. 27, 2013 /CNW/ - Armistice Resources Corp. (TSX: AZ),
operator of the McGarry gold mine in Ontario's Kirkland Lake area,
today reported that it has made the third and fourth payments on the
Option Agreement to purchase 100% of the former Kerr-Addison mine
On signing the Option Agreement in December 2010 for the purchase,
Armistice agreed to make five annual payments of $500,000 in cash to a
group of private investors (the Group) who controlled ownership of the
Kerr-Addison property and to issue 2,000,000 common shares to the
Group. Armistice subsequently made the first two annual cash payments.
The third payment of $500,000 was payable in January 2013.
Armistice reached an agreement with the Group to amend the Option
Agreement, under which the third and fourth payments of $500,000 each
were satisfied by the issuance of 10,000,000 shares from the Armistice
treasury. The remaining fifth option payment of $500,000 in cash will
continue to be payable on January 1, 2015 or the next business day
As agreed in December 2010, Armistice continues to be required to pay a
2% royalty on gold production from the Kerr-Addison property, except
for an area identified in an internal report prepared by AJ Perron Gold
Corp. dated October 21, 1996 as containing proven and probable reserves
which are subject instead to a 3% net smelter royalty.
"We are very pleased to have made this amendment that enables us to
satisfy the third and fourth purchase payments with common shares,"
said Todd J. Morgan, chief executive officer and president. "This
enables Armistice to use our cash to continue funding the development
and operations of our McGarry Mine.
"As we reported in July 2012, the results of the surface
diamond-drilling program carried out on the Mill Zone of the
Kerr-Addison property were very encouraging. The findings from the 68
holes drilled confirmed our expectations that there is great potential
for mineral resource delineation on the property. Our current focus is
on bringing the McGarry Mine into commercial production in 2013. As we
progress with that and start to generate meaningful cash flow, we
intend to resume exploration drilling on the company's extensive land
package, including the Kerr-Addison property," Mr. Morgan said.
About Armistice Resources Corp.
Armistice Resources, a Canadian-based exploration and development
company, is the owner of the McGarry gold mine in Ontario's Kirkland
Lake area. Including the McGarry Mine property, Armistice has
established a sizeable footprint of contiguous gold properties in
Virginiatown on the prolific Larder Lake-Cadillac Break that extends
200 km east-west straddling the Ontario and Quebec border and that has
produced 95 million ounces of gold. The McGarry Mine consists of 33
contiguous patented mining claims, including three licenses of
occupation, totaling 484 hectares. The McGarry Mine is fully permitted
and all equipment and systems at the site have been brought up to
In addition, in December 2010, Armistice signed a definitive five-year
option agreement for the purchase of up to 100 percent of the mineral
rights on the Kerr-Addison property, which is adjacent to the McGarry
Mine. The Kerr-Addison Gold Mine was one of Canada's largest gold
producers, producing more than 11 million ounces of gold during a
58-year operating life from 1938 to 1996. In December 2012, Armistice
completed the purchase of the mineral rights on 18 mining claims
totaling 627 acres (the Barber-Larder Property) located on the western
boundary of the McGarry Mine.
Armistice Resources is listed on the Toronto Stock Exchange (Symbol: AZ)
and currently has 231,528,971 common shares issued and outstanding. To
find out more about Armistice Resources, please visit the company's
website at www.armistice.ca.
This news release contains forward-looking statements, including current
expectations on the timing of the commencement of production and the
rate of production, if commenced. These forward-looking statements
entail various risks and uncertainties that could cause actual results
to differ materially from those reflected in these forward-looking
statements. Such statements are based on current expectations, are
subject to a number of uncertainties and risks, and actual results may
differ materially from those contained in such statements. These
uncertainties and risks include, but are not limited to, the strength
of the Canadian economy; the price of gold; operational, funding, and
liquidity risks; the degree to which mineral resource estimates are
reflective of actual mineral resources; and the degree to which factors
which would make a mineral deposit commercially viable are present; the
risks and hazards associated with underground operations. Risks and
uncertainties about Armistice Resources' business are more fully
discussed in the company's disclosure materials, including its annual
information form and MD&A, filed with the securities regulatory
authorities in Canada and available at www.sedar.com and readers are urged to read these materials. Armistice Resources
assumes no obligation to update any forward-looking statement or to
update the reasons why actual results could differ from such statements
unless required by law.
SOURCE: Armistice Resources Corp.
For further information:
President, CEO, and Chairman
Todd J. Morgan
Armistice Resources Corp.
Investor and Media Relations
Richard W. Wertheim
Wertheim + Company Inc.