/NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES./
VANCOUVER, Dec. 8 /CNW/ - Svit Gold Corp. (the "Company") reports that it has entered into an option agreement with a subsidiary of Teck Resources Limited ("Teck") to earn an interest in the La Verde copper property located in Michoacan in west-central Mexico (the "Property").
The Property, located in the Sierra Madre del Sur approximately 320 km west of Mexico City, consists of two claims, Capire and Unificacion Santa Maria, comprising approximately 17,000 ha. The Property is underlain by multi-phase intrusions dominated by quartz diorite and quartz feldspar porphyry. Historically, copper porphyry mineralization has been exposed and tested in two main mineralized zones termed East Hill and West Hill. Geological and geophysical vectors indicate that there remains significant potential for copper (+/- gold +/- molybdenum) mineralization to be hosted outside the known magmatic-hydrothermal breccia complex. There is significant potential to expand the scale of mineralization at the Property with a moderate amount of drilling. The Property is the subject of a historic non-NI 43-101 compliant resource estimate, and an engineering company has been retained to prepare a NI 43-101 compliant technical report which summarizes historical drilling and resource figures.
The Company may earn a 60% interest in a to be formed Mexican subsidiary of Teck ("Newco") which will hold the Property, by advancing US $6 million to Teck toward purchase of shares in Newco, and incurring aggregate exploration expenditures of US $10 million on the Property on or before December 31, 2012. After the Company earns its 60% interest in Newco, Teck may elect to increase its interest to 60% by incurring aggregate optional expenditures equal to two times the expenditures incurred by the Company, to a maximum of US $20 million. Should Teck fail to exercise the option to earn a 60% interest, the Company can acquire a 100% interest in Newco by paying Teck a further US $20,000,000.
The initial advance to Teck is being financed with a US $6 million non-revolving term facility from Endeavour Financial Corporation (the "Facility"). The Facility is repayable in 12 months, and amounts drawn will bear interest at a rate of 10% per annum. Endeavour will be issued 10,000,000 share purchase warrants on draw-down of the Facility, each warrant entitling Endeavour to acquire one common share of the Company at an exercise price of CDN$0.14 per common share for a period of 12 months. In the event the Facility has not been repaid by April 1, 2010, an additional fee of US $500,000 will be payable to Endeavour at the Company's option in cash or in shares of the Company.
A finder's fee of 3,333,000 common shares of the Company issued at a price of $0.105 per common share will be paid in connection with this transaction.
The Company is undertaking a non-brokered private placement of 100,000,000 common shares at a price of Can. $0.105 per share to raise aggregate proceeds of Can. $10.5 million, Can. $4 million of which will be used for first year exploration costs, US $4 million of which will be used to repay the US $6 million borrowed from Endeavour under the Facility, and the balance of which will be used for general working capital. Prior to closing the placement, the Company will change its name to Catalyst Copper Corp.
Effective at closing, all of the Company's directors and officers will resign with the exception of continuing directors Gordon Keep and John Reynolds. John Greenslade will join the Company's board of directors and will be appointed as the Company's President and Chief Executive Officer, and Terry Hodson will join the board and be appointed as the Company's VP Exploration. An additional director as yet to be determined will also join the board, and Denby Greenslade will be appointed as the Company's corporate secretary. In conjunction with these transactions, the Company will issue options to acquire an aggregate of 8 million common shares of the Company exercisable at a price of $0.14 per common share for a period of 10 years.
The transactions described above are subject to the approval of the TSX Venture Exchange.
Trading in the Company's shares will recommence on December 10, 2009.
ON BEHALF OF SVIT GOLD CORP.
Gordon Keep - Director
Terry Hodson, P. Geo., a qualified person as defined in NI 43-101, has reviewed the disclosure contained in this news release on behalf of the Company.
Neither the 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 SVIT GOLD CORP.
For further information: For further information: Gordon Keep, Tel: (604) 609-6110