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VANCOUVER, Jan. 22 /CNW/ - GMV Minerals Inc. (the "Company" or "GMV") (TSX-V:GMV) is pleased to announce that it is has entered into a non-binding letter of intent (the "LOI") to acquire 100% of the issued and outstanding shares of a private company ("Targetco") incorporated in El Oro Province, Ecuador. Targetco is a gold producer with properties located in the district of southern Ecuador, known as the Zaruma-Portovelo-Ayapamba (the "Properties").
Highlights of the Transaction
Subject to the terms and conditions to be contained in a definitive agreement to be negotiated between the parties before March 15, 2010:
- GMV will acquire all of the issued and outstanding shares of
Targetco, in consideration for the issuance by GMV of
post-consolidation common shares of GMV (consolidated on a
three for one basis) (the "Transaction Consideration");
- completion of the Transaction will be subject to GMV completing a
concurrent majority arm's length private placement of its securities
for a minimum of $5 million (the "Financing");
- following completion of the Transaction and the Financing, the
shareholders of Targetco hold 50% of the total issued and outstanding
post-consolidation common shares of GMV;
- completion of the Transaction will be subject to a number of
conditions, including, but not limited to, the negotiation and
execution of a definitive agreement and the delivery of National
Instrument 43-101 compliant technical reports in respect of the
Properties by March 15, 2010, satisfactory due diligence and the
receipt of all necessary regulatory and shareholder approvals,
including the approval of the TSX Venture Exchange ("TSX-V").
There can be no assurance that the Transaction will be completed,
as proposed or at all;
- each of GMV and Targetco will agree to convene a meeting of their
respective shareholders as soon as reasonably possible to propose
i) with respect to GMV, among other matters, approval of the
Transaction and a consolidation of its share capital on the basis of
one new common share for every three old common shares outstanding,
and ii) with respect to Targetco, if necessary, approval of the
- the board of directors of GMV will be reconstituted to include
additional independent directors; and
- the new board of directors of GMV on completion of the Transaction
will grant certain directors and members of management of GMV and
Targetco incentive stock options pursuant to GMV's existing
stock option plan.
About the Targetco Properties
While Targetco is actively mining and producing gold, it does not have established resources or reserves, and the Properties are not supported by NI 43-101 Technical Reports. It is a condition of the Transaction that Targetco prepare NI 43-101 compliant technical reports with respect to the Properties prior to execution of a definitive agreement for the Transaction. It is expected that the Company shall receive the NI 43-101 reports within the next 4-6 weeks.
The Zaruma-Portovelo-Ayapamba area where the Properties are located has been a producer of both gold and silver for over 450 years. The area is approximately 60 kilometres east of the major port of Machala. Targetco acquired its interests in the Properties and has been active since November 2006.
Targetco's main focus comprises operations at two underground mines. The first is a mesothermal gold project which is currently operating at 130 tons per day. Production is averaging 12 kilos Au per month. Historical records show it produced 3.5 million ounces of gold and 12 million ounces of silver at 14.6 g/t gold and 48.9 g/t silver between 1905-1944. From 1965 to 1980 the mine was re-opened and produced an estimated 375,000 ounces of gold.
Targetco's second underground mine covers an area totalling 343 hectares. There are 2 processing plants which collectively are currently operating at 170 tons per day. Historical records show production from 2006. Current production of the second mining operation is averaging 14 kilos Au per month.
A comprehensive press release with further particulars relating to the proposed Transaction will follow in accordance with the policies of the TSX-V.
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.
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 or has in any way passed upon the merits of the proposed Transaction and has neither approved nor disproved the contents of this press release.
This release includes forward-looking statements regarding GMV, Targetco and their respective businesses. Such statements are based on management's current expectations. The forward-looking events and circumstances discussed in this release, including completion of the proposed Transaction between GMV and Targetco and the Financing, may not occur and actual operating results could differ materially as a result of known and unknown risk factors and uncertainties affecting the companies. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and GMV undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
SOURCE GMV Minerals Inc.
For further information: For further information: GMV Minerals Inc., Ian Klassen, Tel: (604) 899-0106, www.gmvminerals.com, Email: email@example.com