Shares outstanding: 35,979,835
TORONTO, Nov. 12 /CNW/ - Augen Gold Corp. ("Augen Gold" or "the Company") (TSX-V: GLD) announces that Chenier Drilling Services Inc. has been engaged and has started work on the Company's 100% owned southern Swayze Property in Northern Ontario. The exploration program will consist of line-cutting, ground geophysical and geological surveys. This will allow the Augen Gold team to refine a planned 3,000 metre plus drill program to test up to 10 gold occurrences identified during the Company's 2008 reconnaissance program (Augen Gold news release, February 27, 2009) along its 45 kilometre long property, in addition to targets within the newly acquired Huffman property.
The program entails induced polarization, resistivity, magnetometer and VLF-EM surveys, and other geophysics surveys over the 10 gold targets, several of which have similar characteristics to the Jerome Mine area (Augen Gold news release January 23, 2009).
The program is expected to be completed by the end of the calendar year and is designed to identify additional gold deposits. If time and funding are adequate, this program will allow for further definition of the southern Swayze Property in preparation for a planned National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") compliant technical report.
The program is being performed under the direction of Christopher Marmont, P.Geo., Vice President, Exploration for Augen Gold, who is the qualified person for the Company's southern Swayze Project under the definitions established by NI 43-101.
Secured Loan Facility
Augen Gold also announces that it has entered into a non-revolving secured loan facility (the "Facility") whereby it may borrow up to $1,100,000 from Augen Capital Corp. (the "Lender") at an interest rate of 12% per annum for either a 6 month term from the date of the first advance if Augen Gold draws on $500,000 or more by January 31, 2010 or a 12 month term from the date of the first advance if Augen Gold draws on less than $500,000 by January 31, 2010. In exchange for providing the Facility, the Company shall provide security in favour of the Lender over all the real and personal property of the Company including all the staked and patented mining claims held by the Company in the southern Swayze Greenstone Belt, Porcupine Mining Division, District of Sudbury, Ontario.
The funds will be advanced by the Lender to pay for expenditures made by Augen Gold that qualify as Canadian Exploration Expense ("CEE") pursuant to the Income Tax Act (Canada).
"We are pleased with the strong level of support from our largest shareholder," said James Sbrolla, Chairman of the Company, "The Facility will significantly assist Augen Gold with satisfying its existing flow-through obligations."
The Lender beneficially owns, directly or indirectly, or exercises control or direction over approximately 32% of the issued and outstanding common shares of the Company. Due to this relationship, the Facility is considered to be a "related party transaction" as defined under TSX Venture Exchange Policy 5.9 - Insider Bids, Issuer Bids, Business Combinations and Related Party Transactions ("TSXV Policy 5.9") and Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). However, the Facility is exempt from the valuation and minority approval requirements of TSX Policy 5.9 and MI 61-101 for related party transactions because (i) the Company is in serious financial difficulty, (ii) the Facility is designed to improve the financial position of the Company, (iii) the Facility is not subject to court approval, or a court order that the Facility be effected, under (A) bankruptcy or insolvency law, or (B) section 191 of the Canada Business Corporations Act, any successor to that section, or equivalent legislation, (iv) the Company has one or more independent directors in respect of the Facility and (v) the Company's board of directors, acting in good faith, determined pursuant to a meeting held on November 4, 2009, and at least two-thirds of the Company's independent directors, acting in good faith, determined pursuant to a written resolution dated November 4, 2009 that (i) and (ii) above apply, and the terms of the Facility are reasonable in the circumstances of the Company. It is not anticipated that the Facility will affect the percentage of securities of the Company beneficially owned or controlled by the Lender. The material change report in respect of the Facility is being filed less than 21 days before the entering into of the Facility due to the nature of the Facility, the exemption of the transaction from certain provisions of MI 61-101 and because management of the Company determined it to be necessary for sound business reasons. J. David Mason, is a director and officer of the Company and of the Lender and abstained from voting on the director resolution approving the Facility and Manish Z. Kshatriya is the Chief Financial Officer of the Company and the Lender.
About Augen Gold
Augen Gold is a gold exploration company with 24,581 hectares of staked and patented mining claims in the southern Swayze Greenstone Belt, including the formerly producing Jerome Gold Mine. The claims cover a 45 kilometre long section of the Ridout Deformation Zone, believed to be the western extension of the Kirkland Lake/Larder Lake Break. The geological setting is comparable to the major gold camps of Timmins and Kirkland Lake, and the claims contain numerous gold showings that have received very little historical exploration. Augen Gold is the first company to have assembled such a coherent ground position. Augen Gold has performed a detailed airborne geophysical survey over the whole area, and its sampling program has confirmed the historically reported gold values. The correlation of many gold showings with geophysical features indicates excellent potential for the discovery of additional deposits. The Company's objectives are to aggressively explore the gold showings that correlate with geophysical anomalies, continue resource definition at the Jerome Mine, and to expand its property portfolio with highly prospective mineral assets.
For more information on Augen Gold, visit our website at www.augengold.ca
The Company's documents may be accessed at www.sedar.com
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responsibility for the adequacy or accuracy of this release.
This news release contains forward-looking statements. These statements are based on information currently available to the Company and the Company provides no assurance that actual results will meet management's expectations. Forward-looking statements include estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as "believes", "anticipates", "expects", "estimates", "may", "could", "would", "will", or "plan". Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results relating to, among other things, results of exploration, project development, reclamation and capital costs of the Company's mineral properties, and the Company's financial condition and prospects, could differ materially from those currently anticipated in such statements for many reasons such as: changes in general economic conditions and conditions in the financial markets; changes in demand and prices for minerals; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological and operational difficulties encountered in connection with the activities of the Company; and other matters discussed in this news release. This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. The Company does not undertake to update any forward-looking statement that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities laws.
SOURCE AUGEN GOLD CORP.
For further information: For further information: J. David Mason, Chief Executive Officer and Director, Augen Gold Corp., Tel: (416) 479-3300, Toll-free: 1-888-442-8436