VANCOUVER, Feb. 16 /CNW/ - Beanstalk Capital Inc. ("Beanstalk) is pleased to announce it has entered into an asset purchase agreement (the "Asset Purchase Agreement") dated February 16, 2011 pursuant to which Almaden Minerals Ltd. ("Almaden" TSX: AMM, NYSE: AAU) will vend 100% of its Elk Gold Project located near Merritt, British Columbia (the "Elk Gold Project") to Beanstalk (the "Transaction") in exchange for a controlling interest in Beanstalk and a 2% net smelter returns royalty.

Property Description:
The Elk Property is located in southern British Columbia, Canada roughly 325 km northeast of Vancouver and 55 km west of Okanagan Lake, approximately midway between the towns of Merritt and Peachland. The property is within the Similkameen Mining District and consists of 27 contiguous mineral claims and one mining lease covering 16,566 hectares.  Except for the Agur Option block, Almaden has a 100% interest in all claims.  A 1% NSR production royalty is payable on production from the Agur Option block, located approximately 4 km south of the area of estimated resources. Prospecting activities date back to the early 1900s but detailed work in the area began in 1960s and 1970s by several companies who focused on copper and molybdenum. Fairfield Minerals investigated the area for gold in 1986.  Approximately 51,500 ounces of gold were produced between 1992 and 1995 from a test pit and underground mining exploration (a decline was excavated for underground drilling activity, but no stoping or underground mining occurred).

On January 24th, 2011 Almaden reported the results of a positive Preliminary Economic Assessment ("PEA") of the open pit potential of its 100% owned Elk gold project located in British Columbia, Canada. The positive PEA demonstrates the potential that a viable project could be launched on the Elk property. The results for the base case (at US$1,000 per troy ounce) indicate a mining project with a 7 year mine life producing 139,000 ounces of gold at estimated cash operating costs of $C528 per troy ounce, initial capital expenditures of C$9.91 MM, pre-tax Internal Rate of Return of 51%, payback of 1.85 years and NPV of $C28.7 MM using a discount rate of 8%. The results for US$1,200 per troy ounce case indicate a mining project with a 9 year mine life producing 297,000 ounces of gold at estimated cash operating costs of $C652 per troy ounce, initial capital expenditures of C$17.5 MM, pre-tax Internal Rate of Return (IRR) of 39%, payback of 3.3 years and NPV of $C67.9 MM using a discount rate of 8%.

The NI 43-101 compliant PEA was completed by Roger Pooley, (MAusIMM) of SRK Consulting Australasia Pty Ltd. ("SRK"). SRK relied on other authors in the areas of Geology, Resources, and Mineral Processing. Susan Lomas, P.Geo of Lions Gate Geological Consulting ("LGGC") prepared an updated National Instrument 43-101 compliant resource. Gary Hawthorn, P.Eng. of Westcoast Mineral Testing Inc. (WCMT) supervised the metallurgical testing and estimated the preliminary capital and operating costs for a treatment plant. Brian Alexander, P.Geo. supervised the 2010 drilling program at Elk.  A Technical Report entitled "NI 43-101 Technical Report for a Preliminary Economic Assessment on the Elk Gold Project, Merrit, British Columbia, Canada" dated January 14th, 2010 will be filed at The experts listed above have written sections of this Technical Report and are acting as the Qualified Person (QP) for those sections.

The PEA did not consider the underground potential of the resource but only the portion of the current resource amenable to open pit mining. The 2010 Mineral Resource Estimate and the PEA study does not include the results of the 2010 drilling program. The Company plans to incorporate the 2010 drilling results into an updated mineral resource estimate once all the assay results are received, for the purposes of more advanced studies, including an analysis of the underground potential. The PEA recommends that the Company proceed with a Pre Feasibility Study of the project. 

Highlights of the PEA are:

  • Average life of mine cash operating cost of $C528 per ounce at $US 1,000 per ounce (Base Case) and $C 652 at $US1,200 per ounce.
  • Estimated start-up capital expenditures of $C9.91 million and life of mine sustaining capital of $C12.18 million (Base Case).
  • At $US1,000 per ounce, pre-tax Internal Rate of Return (IRR) of 51%, payback of 1.85 years and NPV of $C28.7 MM using a discount rate of 8% (Base Case).
  • At $US1,200 per ounce gold, pre-tax Internal Rate of Return (IRR) of 39%, payback of 3.3 years and NPV of $C67.9 MM using a discount rate of 8%.
Project summary Base Case $1200 Case Unit
Assumed gold price 1000 1200 $US/tr.oz
Tonnes per day treated 500 1000 tpd
Life 7 9 years
Total tonnes treated 1.1 2.6 MT
Grade 4.14 3.89 g/t
Waste: Ore ratio 16.4 30.1  
Plant recovery 92 92 %
Ounces Au produced 139,198 297,239 Tr.oz
Initial capital expense 9.91 17.50 $CADM
Working and preproduction capital 2.27 9.60 $CADM
Waste mining 2.42 1.90 $ CAD/tonne waste
Ore mining 8.38 5.87 $CAD  /tonne ore
Processing 20.68 14.74 $CAD  /tonne ore
Administration and overheads 2.07 1.27 $CAD  /tonne ore
Total operating cost 70.30 78.91 $CAD / tonne / ore
Pre-tax NPV @ 8% 28.7 67.9 $CADM
Pre-tax IRR 51% 39%  
Max Exposure 13.66 33.53 $CADM
Payback, years from start production 1.85 3.30 years

Table 1: Project Assumptions and Results for Base and US$1,200 Cases

The preliminary assessment includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized. This mining study and PEA are at a conceptual level where different options can be considered and a broad understanding of the potential project performance can be gained. SRK and Almaden consider this project to be preliminary or "green field" in nature as previous mining activity on the property was largely for exploration purposes and the property has not been the subject of a detailed pre-feasibility study as is defined in NI 43-101. For the base case pit scenario 9% of the resource considered viable in the study are Measured Resources, 73% Indicated and 18% Inferred Resources. For the US$1200 pit scenario 7% of the resource considered viable in the study is based on Measured Resources, 71% on Indicated and 22% on Inferred Resources.

The trial open pit operation that occurred in the 1990s mined a small portion of vein material. The scenario developed as a recommendation for further study is summarised in the following table. Known as the Base Case, it is based on using augmented process equipment that Almaden already owns. This limits the throughput to 500 tpd. The Base Case is a conservative and low risk scenario in the light of the current gold price, and in practice the project could be expanded to mine a much larger part of the known resources if current gold prices are sustained.  To show the effect of this, an alternative case known as the $US1200 case was also studied. The $US1200 case assumes that a gold price of $US1200/tr.oz will be maintained for eight years. The mine processing plant production is doubled, to 1,000 tpd. The underground resources declared in Table 3 below are not considered for production in this report. It is believed that if the project proposed goes ahead, then these resources will have a much improved chance of being mined, because access can be gained from within the open pit, and the treatment plant will have been built, and will be ready to accept underground production without further capital expense. This matter can therefore safely be left for consideration at a later time.

Item Value Unit
Slope Angle 45 °
Mining Costs 2.29 $/tonne waste
  8.25 $/tonne ore
Mining Recovery 1.0  
Mining Dilution 1.1  
Processing Cost including G & A 22.75 $/tonne
Processing Recovery 92 %
Gold price 1,000 USD
US Dollar / CAD Dollar exchange rate 0.95  
Selling Cost 2% Of nominal gold sale price

Table 2: Base Case Pit Optimisation Parameters

A mineral resource for the Elk Property was estimated by LGGC.  Multiple quartz veins were interpreted on north-south trending cross sections. Three-dimensional solids models were built from the sectional interpretations using diamond drill hole data captured through to 2007. Assay gold grades were capped and composited to vein width composites averaging about 1.5 m.  Gold grades were estimated into a block model using the inverse-distance method.

Vein Location Class Cut-Off Aug/t Tonnage Aug/t Ounces
B&WD In Pit Measured 0.50 200,000 8.77 55,000
B&WD In Pit Indicated 0.50 1,870,000 3.50 210,000
B&WD In Pit M&l 0.50 2,070,000 4.00 266,000
B&WD In Pit Inferred 0.50 640,000 5.71 117,000
B&WD Below Pit Measured 5.00 - - -
B&WD Below Pit Indicated 5.00 130,000 8.46 35,000
B&WD Below Pit M&l 5.00 130,000 8.46 35,000
B&WD Below Pit Inferred 5.00 510,000 8.91 146,000
B&WD In & Below Pit Measured 0.50 & 5.00 200,000 8.77 55,000
B&WD In & Below Pit Indicated 0.50 & 5.00 2,000,000 3.82 245,000
B&WD In & Below Pit M&l 0.50 & 5.00 2,190,000 4.26 301,000
B&WD In & Below Pit Inferred 0.50 & 5.00 1,150,000 7.13 263,000

Table 3: Mineral Resources for the B and WD Veins at the Elk Project

LGGC directed SRK to produce a pit shell that LGGC incorporated into the resource estimation tabulations using a $US1200 gold price to constrain the blocks into open pit amenable resources reported at a 0.5 g/t Au cut-off. The remaining resources, that may have potential for underground extraction, was reported at a 5.0 g/t Au cut-off and are located below the $US1200 pit shell. Table 3 reports the results of the mineral resource estimation for the B and WD Veins using data available from December 2007.

The Transaction
Pursuant to the Asset Purchase Agreement, Almaden has agreed to vend a 100% interest the Elk Gold Project to Beanstalk in exchange for 37,000,000 common shares in the capital of Beanstalk (the "Shares") and a 2% net smelter returns royalty.  All or a portion of the Shares may be subject to resale restrictions and escrow requirements under applicable securities laws and the policies of the Exchange.  In addition, two million of the Shares will be held in escrow, subject to the following terms and conditions: (a) one million Shares will be held in escrow and released at such time as Beanstalk establishes one million ounces of measured or indicated reserves of gold on the Elk Gold Project, as verified by an independent 43-101 report; and (b) one million shares will be held in escrow and released at such time as Beanstalk establishes an additional one million ounces of measured or indicated reserves of gold on the Elk Gold Project, as verified by an independent 43-101 report.  Any Shares not released from escrow within five years of the Closing will be returned to Beanstalk for cancellation.

The Transaction and the Concurrent Financing (collectively, the "Qualifying Transaction") are intended to constitute Beanstalk's qualifying transactions pursuant to Policy 2.4 "Capital Pool Companies" of the Exchange Corporate Finance Manual.  Following completion of the Qualifying Transaction, Beanstalk will be a Mining Issuer on the Exchange. The Transaction is an arm's length qualifying transaction and, as such, the Transaction is not subject to shareholder approval, unless otherwise required by the Exchange or applicable laws.

The parties' obligations to complete the Transaction are subject to the satisfaction of certain conditions precedent, including, without limitation: (a) the completion by Beanstalk of a due diligence review to its satisfaction with regard to Elk Gold Project; (b) the receipt of all necessary approvals of the Exchange and other regulatory and government authorities; and (c) the completion by Beanstalk of a private placement (the "Concurrent Financing") to close concurrently with the Transaction (the "Closing") of up to 10,000,000 units (each a "Unit") at a purchase price of $0.50 per Unit (each Unit consisting of one common share and one whole warrant ("Warrant") exercisable at $0.75 for three years from the Closing) and up to 3,850,000 common shares in the capital of Beanstalk issued on a flow-through basis (each a "Flow-Through Share") pursuant to the Income Tax Act (Canada) at a purchase price of $0.65 per Flow-Through Share for aggregate gross proceeds of up to $7,502,500, or in such other amounts and on such other terms as may be determined by Beanstalk.  A finder's fee or agent's commission may be paid in connection with the Concurrent Financing, in accordance with the policies of the Exchange.  The proceeds of the Concurrent Financing will be used to provide working capital, to undertake the proposed work program on the Elk Gold Project and for general working capital purposes.

Trading Halt
In accordance with Exchange policies, the common shares in the capital of Beanstalk are currently halted from trading and will remain so until the documentation required by the Exchange for the Qualifying Transaction can be provided to the Exchange, which may be until completion of the Qualifying Transaction.

Directors and Officers of Beanstalk
It is anticipated that upon completion of the Transaction, Beanstalk's board of directors will consist of Duane Poliquin, Morgan Poliquin, James O'Rourke, and Rodney Shier.  The senior officers of Beanstalk are anticipated to be James O'Rourke, Chief Executive Officer, Mark Blyth, President, Rod Shier Chief Financial Officer, and Michael Varabioff, Corporate Secretary.The following is a brief description of the background of each of the directors and senior officers of Beanstalk following completion of the Transaction:

James O'Rourke
James (Jim) O'Rourke graduated in 1964 with a B.A. Sc. degree in Mining Engineering from the University of British Columbia.  Since April 2006, Mr. O'Rourke has served as the President and Chief Executive Officer of Copper Mountain Mining Corporation (TSX:CUM) ("Copper Mountain"). Mr. O'Rourke was President of Huckleberry Mines Ltd., a private open pit copper mining company, from December 2003 to April 2006 and continues as Executive Advisor and director.  Mr. O'Rourke was also President & Chief Executive Officer of Compliance Energy Corporation (TSX-V:CEC) ("Compliance Energy"), a mining company, from July 2000 to November 2005 and has continued as Chairman and director to present.  Mr. O'Rourke was President of Princeton Mining Corporation (TSX:PMC) from 1987 to 1997 and continued as Chairman from February 1997 to January 1998.

Rodney Shier
Rodney Shier graduated in 1986 with a Bachelor of Commerce degree from the University of British Columbia and earned his Chartered Accountant designation in 1990 while articling at the international accounting firm of PricewaterhouseCoopers.  Mr. Shier has over fifteen years' experience as a corporate officer and director to a number of publicly-traded mining companies.  In July 2000, Mr. Shier was appointed Chief Financial Officer of Copper Mountain, and Mr. Shier has also been a director of Compliance Energy since July 2000 and was the Chief Financial Officer of Compliance Energy from June 2003 to March 2010.

Duane Poliquin
Duane Poliquin is a registered professional geological engineer with over 40 years' experience in mineral exploration, and he is the founding shareholder of Almaden.  Mr. Poliquin gained international experience working with major mining companies where he participated in the discovery of several important mineral deposits. Mr. Poliquin has held executive positions and directorships with several junior resource companies over his career and was President of Westley Mines Ltd. when that company discovered the Santa Fe gold deposit in Nevada.  Mr. Poliquin is a director and the Chairman of Almaden.

Morgan Poliquin
Morgan Poliquin is a registered professional geological engineer with 16 years' experience in mineral exploration since graduating with a B. A.Sc. degree in geological engineering from the University of British Columbia in 1994. In 1996, Mr. Poliquin earned a M.Sc. in geology from the University of Auckland, New Zealand studying geothermal and epithermal deposits in the South Pacific including the Emperor Gold Deposit, Fiji. In 2010, Mr. Poliquin earned his Ph.D. in Geology from the Camborne School of Mines, University of Exeter. He is a director and the President and Chief Executive Officer of Almaden and oversees corporate matters as well as directing Almaden's exploration program.

Mark Blythe
Mr. Blythe has a MBA from La Trobe University in Melbourne and a Bachelor of Mining Engineering degree from the Western Australian School of Mines. He was Corporate Senior Mining Engineer for Placer Dome Inc from 2004 until 2006. Since 2007 Mr. Blythe has been President and CEO of Tarsis Resources Ltd. (TSX-V: TCC). Mr. Blythe holds a Western Australian First Class Mine Manager's Certificate of Competency and has managed mines for both Placer Dome and WMC Resources (formerly Western Mining Corporation).

The information in this release in respect of the Elk Gold Project has been reviewed by Jim O'Rourke, P. Eng., a qualified person as defined in National Instrument 43-101 "Standards of Disclosure for Mineral Projects".


"James O'Rourke" (signed)

James O'Rourke, President and Chief Executive Officer

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool Beanstalk should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.  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 Beanstalk Capital Inc.

For further information:

Rodney Shier, Chief Financial Officer
Telephone: 604-682-2992 ext 222, Fax: 604-682-2993
Address: Suite 1700, 700 West Pender Street, Vancouver, British Columbia  V6C 1G8

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Beanstalk Capital Inc.

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