TORONTO, June 16, 2011 /CNW/ - Angus Mining (Namibia) Inc. ("Angus" or
the "Company") (TSX Venture: ANA) and Elgin Mining Inc ("Elgin" or the
"Vendor") (TSX Venture: ELG) are pleased to announce that they have
entered into a definitive agreement, pursuant to which Angus will
acquire Elgin's 68% interest in the undiluted share capital of Silver
Reef Resources Ltd. ("Silver Reef"), a privately held company
incorporated under the laws of British Columbia, through the purchase
of 20,500,000 units of Silver Reef. In consideration, Angus will pay
Elgin $1,000,000 in cash and issue $1,500,000 in equity, or 4,411,764
Angus common shares based on 5 day trailing volume weighted average
price of $0.34 per share. The Silver Reef units to be acquired by Angus
each consist of one common share or Silver Reef and one warrant,
18,000,000 warrants are exercisable for $0.15 per Silver Reef Share and
2,500,000 warrants are exercisable for $0.25. The transaction is
expected to close in July, 2011 and is subject to, among other things,
approval by the TSX Venture Exchange, and the Company obtaining the
equity or debt financing necessary to satisfy the cash consideration of
the acquisition and the completion of satisfactory due diligence.
Silver Reef is a privately held precious metals exploration company with
operations based in Central Nevada, USA. Silver Reef has the option to
earn a 100% interest in 8 properties covering in excess of 14,000
acres, which include several small past-producing open pit mines,
shafts with underground workings, and other indications of economic
mineralization. All of the optioned properties have been drilled
historically, and Silver Reef is in the process of compiling drilling
data, and completing NI 43-101 technical reports on four of the largest
Two of the projects, Reveille and Freiburg, supported small-scale,
high-grade silver production as recently as the early 1980's, however
were shut down as the result of declining commodity prices. Geotech
Ltd. has completed airborne geophysical studies of both projects, which
Silver Reef has used to prioritize targets for a phase 1 drilling
campaign scheduled to begin in Q3, 2011. Management of both Silver Reef
and Angus Mining believe that there is great potential at Reveille and
Freiburg, and target to bring these projects to development and
production rapidly following the definition of mineral resources, if
any are defined.
In order to earn a 100% interest in Reveille, Silver Reef must make cash
payments of up to $1.25 million and incur $7.5 million in mining work
expenditures by August 15, 2013 and issue up to 5,000,000 shares upon
the occurrence of certain events. The property will also be subject to
certain royalties. With respect to Freiburg and other claims, Silver
Reef may earn a 100% by spending an aggregate of $5 million and making
certain additional cash payments and subject to certain royalties.
Silver Reef has spent approximately $1 million to date in the earn in
The geology of each project is similar; intrusive rocks having intruded
overlying sediments, primarily dolomites and quartzites, with
mineralizing solutions depositing silver, gold and to a lesser extent
lead and zinc, as stockwork veins, breccias, and replacement deposits.
At surface, much of the mineralization is oxidized, transcending into
deeper sulphide mineralization as evidenced by historical workings.
Silver Reef is managed by a team of professional Geologists including
George Nicholson, a private consultant with extensive experience in
intrusive related ore bodies, and Gary Deschutter, a former senior
Geologist with Falconbridge and, more recently Anglo American.
Silver Reef is currently financed through the first stage of drilling at
Reveille and Frieburg.
Fraser Buchan, Angus Mining CEO commented; "The Silver Reef acquisition
represents an important step forward in Angus Mining's plans to deliver
resource growth in the precious metals sector, and ultimately
production. Silver Reef is earning into a portfolio of projects that
have the potential to generate high grade, high quality resources, in a
sector that we believe will outperform. When combined with the Ondundu
Gold Project in Namibia, the Company will have a diversified portfolio
of projects, and solid prospects for increasing shareholder value."
Brian Morales, Elgin Mining CFO commented; "This transaction is
consistent with Elgin's strategy to focus on more advanced stage
projects, specifically the recently announced agreement to acquire the
Lupin gold mine and Ulu gold deposit as well as the Oro Cruz and La
Bufa projects. The transaction provides Elgin with an immediate return
on its investment in Silver Reef and cash which will be used to advance
the aforementioned projects. At the same time Elgin will be able to
participate in the potential of the Ondundu Gold project and we believe
that in the capable hands of Angus, a company focused earlier stage
projects, that Silver Reef can be advanced and value can be created."
Pursuant to the early warning requirements of National Instrument
62-103, Elgin is required to report certain information with respect to
its holdings of securities of Angus. Upon completion of the
transaction, Elgin will hold an aggregate of 4,411,764 Angus common
shares representing 12.4% of the outstanding capital of Angus on an
undiluted basis (Note: disclosure regarding the percentage of
outstanding Angus common shares held by Elgin is based on information
provided by Angus).
The securities will be acquired by Elgin for investment purposes. Elgin
will evaluate its investment in Angus from time to time and may, based
on such evaluation of market conditions and other circumstances,
increase or decrease shareholdings in Angus as circumstances require.
For further information and to obtain a copy of the early warning
report filed under applicable Canadian provincial securities
legislation in connection with the transactions hereunder, please go to
the Angus profile on the SEDAR website www.sedar.com or contact Elgin
at the telephone number specified below.
Robert Buchan is a director and the Chairman of both Angus and Elgin.
Mr. Buchan also holds 2,580,000 Angus common shares and 2,580,000 Angus
warrants and directly and indirectly owns 3,228,098 common shares of
Elgin. The transaction is considered as being a non-arm's length
transaction subject to the requirements of the TSX Venture Exchange.
The transaction has been approved by the independent directors of Angus
Angus Mining (Namibia) Inc. is a Canadian based precious metals
exploration company focused on developing the Ondundu Gold Project in
West‐Central Namibia via a joint venture agreement with Forsys Metals
Corp. The Company's goal is to deliver superior shareholder returns by
identifying, acquiring and developing high quality assets in a safe and
socially responsible manner. Angus Mining is committed to providing
economic and social benefit to the Namibian community through the
responsible development of mining assets in the Country.
Elgin Mining Inc. has approximately $46 million in cash available to
complete the acquisitions of the Lupin Gold Mine and Ulu gold deposit
as well as to commence aggressive exploration and development programs
on each and to meet its obligations with respect to its recently
announced option agreement with Lincoln Mining Corp.
Certain information set forth in this press release contains
"forward-looking statements" and "forward-looking information" under
applicable securities laws. Except for statements of historical fact,
certain information contained herein constitutes forward-looking
statements which include management's assessment of Elgin's and Angus'
future plans and operations and are based on each company's current
internal expectations, estimates, projections, assumptions and beliefs,
which may prove to be incorrect. Some of the forward-looking statements
may be identified by words such as "expects" "anticipates", "believes",
"projects", "plans", and similar expressions. These statements are not
guarantees of future performance and undue reliance should not be
placed on them. Such forward-looking statements necessarily involve
known and unknown risks and uncertainties, which may cause Elgin's and
Angus' actual performance and financial results in future periods to
differ materially from any projections of future performance or results
expressed or implied by such forward-looking statements. There can be
no assurance that forward-looking statements will prove to be accurate,
as actual results and future events could differ materially from those
anticipated in such statements. Elgin and Angus undertake no obligation
to update forward-looking statements if circumstances or management's
estimates or opinions should change except as required by applicable
securities laws. The reader is cautioned not to place undue reliance on
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
SOURCE Elgin Mining Inc.
For further information:
For further information on Angus please
Fraser Buchan: President and CEO
For further information on Elgin please
Brian Morales: Chief Financial Officer: