TORONTO, May 11 /CNW/ - Silk Road Resources Ltd. (TSX-V: SIL) ("Silk
Road" or the "Company") is pleased to announce that it's indirect wholly-owned
subsidiary, Power Fortune Resources Limited ("Power Fortune"), has entered
into a conditional Equity Interest Transfer Agreement (the "Agreement") with
Chenzhou Mining Group Company Limited ("Chenzhou") to sell Power Fortune's
joint venture interest in the Bulagou property for gross proceeds of
approximately 111.8 million RMB (approximately CAD$20 million), which is
subject to withholding taxes, brokerage fees and various operating expenses.
The Agreement is also subject to approval by Chinese government authorities
and by Silk Road's shareholders and the TSX Venture Exchange. The closing of
the sale is expected to occur within approximately two months.
Chenzhou is one of the largest integrated gold-antimony-tungsten mining
companies in China and its common shares are listed for trading on the Chinese
stock exchange, having a current quoted market value of approximately 9
billion RMB (approximately CAD$1.6 billion).
As previously announced, Silk Road is in the process of completing a
business combination with EurOmax Resources Ltd. ("EOX"), subject to approval
by the respective shareholders of each company. The business combination is
anticipated to be completed by the end of June, 2009. The strategy for the
proposed business combination is to use the proceeds of the sale of the
Bulagou interest to advance the Eastern European properties held by EOX
following the completion of the business combination.
"We are pleased that we are able to realize the value of our gold
exploration properties in China. I am excited about the geological prospects
for the portfolio of properties that EOX has accumulated in Eastern Europe"
said David Bell, CEO of Silk Road.
Certain information regarding the Company set forth in this press
release, including management's assessment of the Company's future plans and
operations contains forward looking statements that involve substantial known
and unknown risks and uncertainties. These forward looking statements are
subject to numerous risks and uncertainties, some of which are beyond the
Company's and its management's control, including but not limited to, the
impact of general economic conditions, industry conditions, the conditional
nature of the Agreement, risks associated with transferring funds from China,
fluctuations in the amount of the net proceeds to be received from the sale of
the Bulagou interest, fluctuation of commodity prices, fluctuation of foreign
exchange rates, imperfection of reserve estimates, environmental risks,
industry competition, availability of qualified personnel and management,
stock market volatility, timely and cost effective access to sufficient
capital from internal and external sources. The Company's actual results,
performance or achievement could differ materially from those expressed in or
implied by, these forward looking statements and accordingly, no assurance can
be given that any of the events anticipated to occur or transpire from the
forward looking statements will provide any benefits to the Company.
For further information:
For further information: please contact David Bell, CEO of Silk Road at
(416) 624-8794; or Robert Power, Chairman of Silk Road at (416) 998-5997