MetalQuest Minerals Announces Plans to Acquire all the Assets of Canadian Ore Processors Corporation



    tsx.v: MQ, Frankfurt: T9N, otc-bb: MQSTF

    VANCOUVER, May 25 /CNW/ - As previously reported (March 6th, 2008)
MetalQuest Minerals Inc. ("MetalQuest" or the "Company") completed an asset
monetization strategy in 2008 in order to continue an "evaluation of potential
merger, acquisition and exploration opportunities in British Columbia and
Peru."
    As a result of these efforts, MetalQuest plans to acquire all the
outstanding shares of Canadian Ore Processors Corp., ("Canadian Ore
Processors") a private Canadian corporation. Canadian Ore Processors was
formed for the express purpose of developing gold ore toll processing
opportunities in northern Peru. The principals of Canadian Ore Processors have
extensive international experience in all facets of mineral processing and
have developed a comprehensive business plan to process ores currently being
mined by approximately 6500 small scale miners in the area of northern Peru,
as estimated by the Peruvian Ministry of Energy and Mines.
    Canadian Ore Processors has acquired US$10 million in financing from the
Grafton Resources Investment Trust ("Grafton") through a stock swap between
Grafton and Minera CanOrePro Ltda. S.A. (Minera CanOrePro); a private Peruvian
corporation and a subsidiary of Canadian Ore Processors. As a result of the
acquisition of Canadian Ore Processors, MetalQuest will own 50% of Minera
CanOrePro. Grafton will own the remaining 50% through their US$10 million
investment.
    As a condition of the Grafton investment in Minera CanOrePro, MetalQuest
will be seeking shareholder approval at the June 26, 2009 Annual General and
Special Meeting, to consolidate MetalQuest shares on a three old for one new
basis and change the name to Canada Gold Corporation ("Canada Gold"). On
approval, Canada Gold will issue 1,190,000 common shares for 100% of the
issued and outstanding shares of Canadian Ore Processors, as full
consideration. As additional consideration, Grafton will issue a call option
to Canada Gold to purchase, at Canada Gold's discretion, within 36 months,
Grafton's interest in Minera CanOrePro for US$10 million in cash or the
equivalent in Canada Gold shares at a minimum floor price of US$0.55, or the
thirty day average trading price, whichever is higher, subject to regulatory
approval, at the time of exercise.
    Andrew Neale P.Eng., currently CEO and Director of Canadian Ore
Processors will become the CEO of Canada Gold and will join the board as an
executive director. Andrew has over 20 years experience in all facets of
mineral processing, including operations management, environmental management
and government relations. Andrew was previously Vice President-Technical
Services with Freeport-McMoRan Copper and Gold in both Indonesia and New
Orleans. Andrew has a BSc and MSc in Mineral Processing Engineering from the
University of Alberta
    Rick Plotzki, currently COO and Director of Canadian Ore Processors will
assume the role of COO of Canada Gold and will join the board as an executive
director. Rick has over 25 years experience in mine operations, maintenance,
and engineering & construction management. Rick has managed the design and
commissioning of some of the world's largest milling operations, including
Freeport's Grasberg C3 and C4 expansions, Escondida's C4 expansion, the
Collahuasi expansion, and the Las Pelambres construction. Rick is fluent in
Spanish and previously worked in Peru in the late 80s and early 90s at the
then Southern Peru Copper Corporation (now owned and operated by Grupo
Mexico).
    Dave McMillan, currently President and CEO of MetalQuest will take on the
role of Executive Chairman of Canada Gold. Dave has over 40 years in the
resource industries, and his career has spanned manufacturing, marketing,
sales and financing, including 17 years as an investment advisor as VP, Senior
VP, Director, and member of the Executive Committee for Yorkton Securities and
Yorkton Holdings Inc. Dave holds board positions on several publicly traded
resource companies, and is an advisor to various venture capital companies.
    Commenting on the acquisition, Dave McMillan adds he is pleased that all
three parties (MetalQuest, Canadian Ore Processors and Grafton) have come to
agreement on the acquisition. "We are excited to have Andrew and Rick join
Canada Gold and bring their years of mineral processing, engineering and
construction management experience which complements our experience in
corporate finance, marketing and the public markets. Similarly, we are
grateful to have the financial backing of the Grafton Fund which covers much
of the financial risk of constructing and commissioning the processing plant."
    Grafton and its associates will assist Canada Gold in the disposal of the
Grafton ordinary shares, held by Minera CanOrePro, to raise funds to construct
and commission the toll processing plant. The principals of Grafton and its
associates have experience in using this type of share exchange and disposal
mechanism to provide investee companies with new funding. It is also planned
that Grafton and its associates will work closely with Canada Gold in various
aspects of advancing the project.
    Grafton is a registered closed-end fund managed by Newland Fund
Management LLP of London, England and was incorporated for the purpose of
securing and developing investment opportunities in the natural resource
sector. Grafton is managed by David Hutchins and Kjeld Thygesen, two natural
resource fund managers in the sector, with over 60 years experience between
them.
    The above is subject to shareholder and final TSX-V approvals.

    ABOUT METALQUEST MINERALS INC.

    MetalQuest Minerals Inc. is an exploration and development company, based
in Vancouver, British Columbia, Canada. Currently, MetalQuest has
approximately 25 million shares outstanding, owns approximately 2.7 million
shares in Animas Resources Inc. (TSX.V: ANI) and will receive future payments
from Animas of US$900,000 for the previously announced sales agreement on
certain properties in Mexico. For more information, visit www.metalquest.ca.

    
    On Behalf of the Board,

    (*)Dave McMillan(*)

    Dave McMillan
    President & C.E.O.
    MetalQuest Minerals Inc.
    

    This communication to shareholders and the public contains certain
forward-looking statements. Actual results may differ materially from those
indicated by such statements. All statements, other than statements of
historical fact, included herein, including, without limitations statements
regarding future production, are forward looking statements that involve
various risks and uncertainties. There can be no assurance that such
statements will prove to be accurate and actual results and future events
could differ materially from those anticipated in such statements. Neither the
TSX Venture Exchange nor it's Regulation Services Provider (as that term is
defined in the policies of the TSX Venture Exchnage) accepts responsibility
for the adequacy or accuracy of this release.





For further information:

For further information: Chad McMillan, Vice President, Corporate
Communications, (604) 685-5851 or Toll Free: (888) 685-5851, Fax: (604)
685-7349, ir@metalquest.ca, http://www.metalquest.ca; Corporate Office: Suite
520 - 700 West Pender St, Vancouver, BC CANADA, V6C 1G8

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