VANCOUVER, Feb. 11 /CNW/ - Dagilev Capital Corp. (TSX-V: DCC.P, "Dagilev" or the "Company") is pleased to announce that it has entered into an agreement dated February 10, 2010 with Rio Narcea Gold Mines, Ltd. ("Rio Narcea"), a subsidiary of Lundin Mining Corporation (TSX:LUN)(OMX:LUMI), to acquire an approximate 95% interest in the Salave Gold Deposit ("Salave" or the "Property") in the province of Asturias, Spain for cumulative cash payments of 20,500,000, of which 500,000 is payable on closing and the balance upon achieving certain milestones and the issuance of 5,296,688 common shares of Dagilev (the "Proposed Transaction"). The Company is a capital pool corporation listed on the TSX Venture Exchange (the "TSXV") and the Proposed Transaction constitutes the Company's qualifying transaction under TSXV Policy 2.4.
The Proposed Transaction is at arm's-length, and will be subject to a number of conditions, including but not limited to, TSXV acceptance and other necessary approvals. The qualifying transaction will not require the approval of Dagilev's shareholders.
Salave Gold Deposit - One of the largest undeveloped gold deposits in
The Property is located in the province of Asturias, Spain. There is a NI 43-101 technical report titled, "The Salave Gold Deposit prepared for Rio Narcea Gold", dated October 29, 2004. There is an estimated 1,458,245 ounces of gold at a 1g/t Au cut-off grade in the Measured and Indicated Category, with a further 222,357 ounces in Inferred:
- Measured - 354,000 tonnes @ 2.70 g/t Au 30,730 Ounces
- Indicated - 14,800,000 tonnes @ 3.00 g/t AU 1,427,515 Ounces
- Inferred - 2,800,000 tonnes @ 2.47 g/t Au 222,357 Ounces
Rio Narcea successfully explored, developed and produced more than 1 million ozs from the El Valle and Carlés gold mines in the region.
The Salave gold deposit is situated within the Salave Property which consists of five mineral exploitation concessions covering a total area of 433 hectares and is owned by Exploraciones Mineras del Cantabrico S.A (EMC) a Spanish company. EMC holds a 100% interest in the Property, subject only to royalties due to a third party including a series of staged payments and a 5% net smelter returns royalty on gold produced and sold when cumulative gold production exceeds 800,000 ozs. EMC is indirectly owned by Rio Narcea as to approximately a 95% interest and by third parties as to an approximately 5% interest.
Dagilev has engaged Scott Wilson Roscoe Postle Associates Inc. of Toronto, Ontario to complete an updated NI 43-101 technical report. Brian McEwen, P.Geol. is a qualified person under the definition in NI 43-101. Mr. McEwen completed a site visit in December 2009 and has reviewed the contents of this news release.
In August 2005, the Regional Government of Asturias halted open-pit project development of Salave due to the introduction of certain zoning legislation. Immediately after, legal proceedings were commenced by EMC against the government seeking reversal of the decision or monetary compensation. The legal proceedings are on-going.
Dagilev will acquire approximately 95% of the issued and outstanding securities of EMC in consideration for 500,000 (the "Up Front Payment") payable at closing and the issuance to Rio Narcea at closing of 5,296,688 common shares of Dagilev. Rio Narcea will own 19.99% of the 26,496,689 Dagilev shares outstanding post-transaction. In addition, Dagilev is to pay Rio Narcea 20,000,000 within 180 days of receipt by EMC of all necessary material permits, licenses and approvals from all appropriate regulatory bodies and governmental authorities to allow EMC to construct and operate an open pit mine on the Property.
The agreement also includes certain other terms relating to the current legal proceedings initiated by EMC against the government of Asturias, Spain, in connection with the Property. Dagilev and Rio Narcea have agreed that any judgments or monies awarded to EMC as a result of the litigation will be aggregated and shared by Rio Narcea and EMC, following deduction from the amount of the award actually received of the Up Front Payment and litigation costs and court related costs incurred by Dagilev or EMC between the closing date of the Proposed Transaction and the time of settlement of or final judgment in the lawsuit. The net award or monies received, if any, following the foregoing deductions, will be divided with 50% payable to Rio Narcea and 50% payable to EMC.
Dagilev has also agreed to issue 500,000 common shares to a third party in consideration for that party agreeing to amend an agreement in respect of the Property.
Dagilev will change its name on closing to Astur Gold Corporation.
Haywood Securities Inc. acted as financial adviser to Dagilev in respect of the Proposed Transaction.
Board of Directors and Management of the Resulting Issuer
Upon closing of the Proposed Transaction, it is contemplated that the current directors Douglas Turnbull and Cary Pinkowski will remain on the board. David Doherty will be resigning. It is further contemplated that Cary Pinkowski will remain President and Chief Executive Officer and that Nick Demare will be appointed as Chief Financial Officer. Rio Narcea will have the right to appoint an additional member to the Board of Directors.
The Honourable John D. Reynolds, P.C. will be joining the board as a director. Mr. Reynold's career includes substantial experience in venture capital development, resource sector development and elected political office, both federal and provincial. Mr. Reynolds served as Member of Parliament of Canada, 1997-2006 and 1972-1977 and also as leader of Her Majesty's official opposition.
Mr. Reynold's career in the private sector has included directorships on the boards of numerous public companies, including International Corona Resources; Calibre Mining Corp., CY Oriental Holdings Ltd., Oriel Resources, Rusoro Mining Ltd. and Terrane Metals Corp. Mr. Reynolds was appointed as a member of the Queen's Privy Council for Canada on February 6, 2006. In March 2006, he was appointed as a Senior Strategic Advisor to Lang Michener law firm in Vancouver.
Sponsorship of a qualifying transaction of a capital pool company is required by the TSXV unless exempt in accordance with TSXV policies. The Company intends to apply for an exemption from sponsorship requirements, however, there is no assurance that the Company will be able to obtain this exemption.
Completion of the transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction 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.
The TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
ON BEHALF OF THE BOARD
Signed "Cary Pinkowski"
Cary Pinkowski, Chief Executive Officer and Director
SOURCE DAGILEV CAPITAL CORP.
For further information: For further information: Cary Pinkowski, No. 300-1055 West Hastings Street, Vancouver, B.C., V6E 2E9, (604) 694-1600, firstname.lastname@example.org