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DISSEMINATION IN THE UNITED STATES/
CALGARY, June 19 /CNW/ - CMQ Resources Inc. (TSXV: CMQ) ("CMQ") is
pleased to announce Letter Agreements to explore two Nevada gold exploration
properties and to call an Annual and Special Meeting of Shareholders to
approve a funding agreement, share consolidation and future private placement.
Brief Description of Exploration Opportunities
Red Canyon is a sediment-hosted gold project located 12 miles (19 km)
southeast of the 8.5 million ounce Cortez Hills gold discovery. The 7.7 sq.
mi. (20 sq. km.) property consists of 237 unpatented lode mining claims that
cover a 2 sq. mi. (5.2 sq. km.) alteration cell developed in carbonate rocks
that are age-equivalent to host rocks at the Cortez Hills and Gold Bar
deposits. Previous drilling at the Ice prospect identified a near-surface zone
of oxidized gold mineralization hosted in the McColley Canyon Formation,
immediately above the Lone Mountain dolomite. Exploration potential remains
open along strike to the northeast and south in areas covered by post-mineral
volcanic rocks and alluvium. The exploration potential to the northeast is
defined by a) five drill holes that intersected gold mineralization, b)
structural contouring, c) a 3D geochemical evaluation, and d) gravity data.
Select drill-hole intercepts include:
- 95 ft of 0.117 oz Au/t from 20 to 115 ft (29.0m of 4.007 g Au/t from
6.1 to 35.1m) in KR-001;
- 85 ft of 0.046 oz Au/t from 15 to 100 ft (25.9m of 1.568 g Au/t from
4.5 to 30.5m) in ROM07-01; and
- 60 ft of 0.033 oz Au/t from 200-260 ft (18.3m of 1.132 g Au/t from
61 to 79.3m) in M-9.
Previous deep drilling also identified a 3,500 ft by 4,600 ft (1.1 by
1.4km) hydrothermal cell at the Gexa prospect, immediately south of the Ice
prospect. Two holes encountered deep oxidation, moderate to strong
silicification, select intervals of fluidized breccias and elevated pathfinder
elements. Both holes ended prematurely prior to testing their intended targets
in favorable limestone of the Denay and McColley Canyon Formations. These
alteration features combined with elevated gold confirm the presence of a
deeper, previously unrecognized Carlin-style gold system.
The South Sleeper property is located 1.5 miles (2.4 km) south-southwest
of the Sleeper Deposit in Humboldt County, Nevada, on the north end of the
Battle Mountain-Eureka trend. The project consists of 60 lode mining claims
covering 1.8 square miles (4.53 sq. km.).
The target at the South Sleeper property is a low sulfidation, bonanza
gold-silver vein target enveloped by bulk-tonnage, low-grade disseminated ore
covered by pediment gravels.
The Sleeper deposit produced 1,685,500 ounces of gold and
2,334,400 ounces of silver from high-grade veins and lower grade stockwork and
breccia ores. Ninety percent of the ore mined was hosted by the Sleeper
Rhyolite, a volcanic unit that is covered by alluvial gravels. At the present
time XCal Resources Ltd. is evaluating a renewed geological interpretation.
Published geological maps and publicly available data strongly suggests that
the favorable mine stratigraphy and structure trends southwestward from the
Sleeper pit onto the South Sleeper property. Specifically, the gold-silver
veins of the original Sleeper mine, a prominent magnetic low, and Landsat TM
lineaments all trend towards the South Sleeper, which is covered by alluvial
gravels along the western range front.
CMQ has signed a Letter Agreement with Miranda Gold Corp. (TSXV: MAD)
("Miranda") (the "Miranda Agreement"), whereby CMQ may earn up to a 60% joint
venture interest in certain mining claims controlled by Miranda, located in
Eureka County, Nevada (the "Red Canyon Claims"), by spending a total of
USD$4,000,000 on certain exploration expenditures over a five-year period. CMQ
is committed to expend a minimum of USD$500,000 in the first year. Any
additional amounts are at the election of CMQ but no interest is earned until
the entire USD$4,000,000 is expended. After earning a 60% interest, CMQ is to
then earn an additional 10% interest in the Red Canyon Claims by funding the
cost of a feasibility study in respect thereof. The terms of the Miranda
Agreement shall be set forth in a formal exploration agreement that is to be
executed within 60 days.
CMQ has signed a Letter Agreement with Geologix Explorations Inc. (TSXV:
GIX) ("Geologix") (the "Geologix Agreement"), whereby CMQ may earn up to a 55%
joint venture interest in certain mining claims controlled by Geologix,
located in Humboldt County, Nevada (the "South Sleeper Claims"), by spending a
total of USD$3,000,000 on certain exploration expenditures over a five-year
period. CMQ is committed to expend a minimum of USD$200,000 in the first year.
Any additional amounts are at the election of CMQ but no interest is earned
until the entire USD$3,000,000 is expended. CMQ may also elect, in due course,
to earn an additional 10% interest in the South Sleeper Claims by funding the
cost of a feasibility study in respect thereof. The operator, following
completion of a feasibility study, may elect to earn an additional 5% by
arranging financing at its expense for the project through to commercial
production. Alternatively, CMQ and Geologix may form a Joint Venture to
further explore the project. The terms of the Geologix Agreement shall be set
forth in a formal exploration agreement that is to be executed within 60 days.
In order to meet its short term financing requirements, including the
committed amounts under the Miranda Agreement and Geologix Agreement, CMQ has
agreed in principle to enter into a funding agreement (the "Funding
Agreement") with Matco Capital Ltd. ("Matco"), which would permit CMQ to draw
and obligate Matco to provide up to CDN$1,000,000 in loans. The Funding
Agreement expires June 30, 2009 and will be secured by a charge on all assets
and interests of CMQ and requires payment by CMQ of a $50,000 set-up fee.
Amounts drawn under the Funding Agreement bear interest at 9% per annum. There
are no standby or other charges in respect of undrawn amounts. It is
anticipated that the amounts outstanding under the Funding Agreement shall be
repaid upon the completion of the private placement financing described below.
The Funding Agreement has been entered into, conditional upon receiving
shareholder approval at the Annual and Special Meeting of Shareholders
Annual and Special Meeting of Shareholders
CMQ will hold an annual and special meeting of shareholders (the
"Meeting") in early August, 2008. At the Meeting, shareholders of CMQ will be
asked to consider and approve the following items of special business: (i) the
Funding Agreement; (ii) the consolidation of all of the common shares of CMQ
(the "Common Shares") on the basis of ten (10) pre-consolidation Common Shares
for every one (1) post-consolidation Common Share (the "Proposed
Consolidation"); (iii) a future private placement of Common Shares to be
completed within 12 months of the Meeting for up to $5,000,000 (the "Private
Placement") in which insiders and control persons of CMQ may participate; and
(iv) a reduction in the stated capital account of the Common Shares. The
Funding Agreement, the Proposed Consolidation, the Private Placement and the
reduction in the stated capital account of the Common Shares are subject to
the receipt of all applicable shareholder, regulatory and TSX Venture Exchange
CMQ's board of directors believes that, having regard to the large number
of Common Shares outstanding as at the date hereof, it is in the best
interests of CMQ and its shareholders to proceed with the Proposed
Consolidation in order to facilitate future equity financings. There are
currently 65,346,700 Common Shares issued and outstanding. After the Proposed
Consolidation, there would be 6,534,670 Common Shares issued and outstanding.
CMQ does not intend to change its name in conjunction with the Proposed
Net Asset Value
By press releases dated November 19 and 30, 2007, CMQ announced that it
had written off its entire investment in its existing properties, Montezuma
and Vasquir, Nevada, and was assessing them for joint venture or sale. CMQ
believes that for valuation purposes the properties should be treated as
having a nominal value. CMQ has approximately $300,000 in cash and,
accordingly, ignoring any value or liability that may be attributable to the
two Letter Agreements announced today, CMQ has a Net Asset Value of
approximately one half of one cent per share. The NAV on a per share basis
will be increased as a result of the Proposed Consolidation, which should
enhance the feasibility of future equity financings.
John Hogg, Vice President Exploration, CMQ Resources Inc., is the
qualified person, as defined by National Instrument 43-101, who has reviewed
and verified the data disclosed in this press release.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
This press release contains certain forward-looking statements and
forward-looking information (collectively referred to herein as
"forward-looking statements") within the meaning of Canadian securities laws.
All statements other than statements of historical fact are forward-looking
statements. Forward-looking statements typically contain statements with words
such as "anticipate", "believe", "plan", "continuous", "estimate", "expect",
"may", "will", "project", "would", "should", or similar words suggesting
future outcomes. In particular, this press release contains forward-looking
statements pertaining to the following: CMQ's potential joint venture interest
with respect to the Red Canyon Project and the South Sleeper Project, the
Funding Agreement, the Proposed Consolidation, the benefits of the Proposed
Consolidation and the timing and amount of the Private Placement.
Undue reliance should not be placed on forward-looking statements, which
are inherently uncertain, are based on estimates and assumptions, and are
subject to known and unknown risks and uncertainties (both general and
specific) that contribute to the possibility that the future events or
circumstances contemplated by the forward-looking statements will not occur.
There can be no assurance that the plans, intentions or expectations upon
which forward-looking statements are based will in fact be realized. Actual
results will differ, and the difference may be material and adverse to CMQ and
shareholders. Forward-looking statements are based on management's current
beliefs as well as assumptions made by, and information currently available
to, management. Though management considers these assumptions to be reasonable
based on information currently available to it, they may prove to be
incorrect. By their very nature, forward-looking statements involve inherent
risks and uncertainties, both general and specific, and risks that
forward-looking statements will not be achieved. The forward-looking
statements contained in this press release are made as of the date hereof and
CMQ does not undertake any obligation to update publicly or to revise any of
the included forward-looking statements, except as required by applicable law.
The forward-looking statements contained herein are expressly qualified by
this cautionary statement.
For further information:
For further information: Martin Lambert, Chief Executive Officer, CMQ
Resources Inc., Tel: (403) 294-0101, E-mail firstname.lastname@example.org