BEDFORD, NS, Dec. 11, 2012 /CNW/ - NSGold Corporation (TSXV: NSX) is pleased to announce that it has secured a commitment for a loan
facility of up to $500,000 from Van Hoof Industrial Holdings Ltd.
("VHIH"), a company controlled by Mr. Hans Van Hoof, Chairman of the
Corporation. The loan facility is being made available without any
fees, options or warrants. As the loan is drawn upon, it will bear
interest at the rate of 6% per annum. As collateral for the loan
facility, the Corporation will pledge its shareholding in NSX Silver
Inc., representing 1,875,804 shares.
Hans Van Hoof, Chairman commented:
"My view is that real money tends to be made at the bottom, rather than
at the top of the market. The current junior mining environment however
has seen many 'false bottoms'. It seems to me to be very much like the
reversal of the dot-com boom of the late 1990's and early 2000's. At
our annual meeting in June 2012, I was talking to one of our
shareholders, a very theoretical man, with an impressive knowledge of
mining company history. I mentioned that the junior mining market felt
a bit like the 1998 Asian/Russian Crisis followed by the record low
commodity prices of 2001-2003. He then commented that the liquidity
crisis was the worst experienced in 64 years. That was June 2012 and
everyone expected the investment environment to improve from there on
and yet here we are in December 2012.
Recently I read a very well researched article by John A. Kaiser
regarding the pending 'extinction' of a significant number of TSX and
TSX-V listed junior mining companies. That in turn reminded me of a
phrase from Milton Keynes, that has, or should have, saved many good
investment managers over the years:
'The market can stay irrational longer than you can stay solvent.'
Now back to NSGold Corporation, although we expect our current cash and
receivables position will cover our overhead into mid-2013, the current
environment does create some incredible opportunities. Rather than
having to make those opportunities contingent upon securing funding
before getting an exclusive due diligence period, this loan facility
should position the Corporation to be at the forefront for executing on
the right opportunities, as well as for strategically advancing its
100% owned Mooseland Gold Project."
The Corporation and VHIH will proceed with the preparation of a standard
loan agreement to formalize the foregoing arrangement.
Due to the fact that VHIH, the lender, has ownership of more than 10% of
the outstanding common shares of the Corporation, the loan facility may
be considered a "related party transaction" for the purposes of
Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions and the Corporation is relying on exemptions from the formal valuation
and minority approval requirements of Multilateral Instrument 61-101.
NSGold Corporation is a mineral exploration company actively exploring
for gold in Nova Scotia, Canada. NSGold's principal property is the
wholly-owned Mooseland Gold Property. NSGold's shares are listed on the
TSX Venture Exchange under the symbol NSX.
This news release contains statements that may constitute
"forward-looking information" or "forward-looking statements" within
the meaning of applicable Canadian securities legislation. Forward-looking information and statements may include, among others,
statements regarding the future plans, costs, objectives or performance
of NSGold Corporation ("NSGold"), or the assumptions underlying any of
the foregoing. In this news release, words such as "may", "would",
"could", "will", "likely", "believe", "expect", "anticipate", "intend",
"plan", "estimate" and similar words and the negative form thereof are
used to identify forward-looking statements. Forward-looking statements
should not be read as guarantees of future performance or results, and
will not necessarily be accurate indications of whether, or the times
at or by which, such future performance will be achieved. No assurance
can be given that any events anticipated by the forward-looking
information will transpire or occur, or if any of them do so, what
benefits that NSGold or its shareholders will derive. Forward-looking
statements and information are based on information available at the
time and/or management's good-faith belief with respect to future
events and are subject to known or unknown risks, uncertainties,
assumptions and other unpredictable factors, many of which are beyond
NSGold's control. These risks, uncertainties and assumptions include,
but are not limited to, those described under "Risks and Uncertainties"
in NSGold's Management Discussion and Analysis for the Year ended
December 31, 2011, which is available on SEDAR at www.sedar.com, and could cause actual events or results to differ materially from
those projected in any forward-looking statements. NSGold does not
intend, nor does NSGold undertake any obligation, to update or revise
any forward-looking information or statements contained in this news
release to reflect subsequent information, events or circumstances or
otherwise, except if required by applicable laws.
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.
SOURCE: NSGOLD CORPORATION
For further information:
Glenn A. Holmes
Chief Executive Officer, NSGold Corporation