VANCOUVER, Jan. 4, 2012 /CNW/ - Cliffmont Resources Ltd. (TSX-V - CMO) ("Cliffmont" or the "Company") announces an update to its news release on October 3, 2011 regarding the acquisition of a 100% interest in a property in Colombia. In October the Company finalized a Letter of Intent (LOI) and has now entered into a definitive Purchase Agreement for the acquisition of an 100% interest in the San Luis Property ("the Project") consisting of one granted mineral contract totalling 2,623 hectares, located in the Department of Huila, Colombia. The Company will acquire all the shares of Tarana Resources S.A. (Panama) ("Tarana") which owns 100% of the shares of Sociedad Del Alto S.A.S. (Colombia) ("Del Alto"), a private Colombian company duly established and registered at the Chamber of Commerce of Bogotá D.C., and which holds the San Luis property.
The San Luis Project encompasses multiple epithermal gold and silver targets. Given the strong potential at the San Luis Project, the Company plans to focus its efforts on further defining the extents of known epithermal structures as well as identifying and following up on other mineralization recently discovered. Over the past few years, approximately $1.5 million was spent on geochemical sampling, mapping and geophysics focusing on the Project's epithermal potential.
"We are very pleased to have identified a project of this significant potential in what we feel is one of the more prolific, underdeveloped jurisdictions in Colombia," said Cliffmont Resources President and CEO Jeff Tindale. "Cliffmont has been in Colombia for over a year evaluating several projects and building a strong social, environmental and technical team. We are now ready to move the San Luis project aggressively forward."
Summary of the San Luis Project
The San Luis Gold Project (2,623 Ha) is located in the Department of Huila, Colombia, approximately 80 kilometres NW of the capital city, Neiva. The approximate driving time between Neiva and the Project is 2.5 hours. The San Luis Project has established infrastructure, including road access, power and water and is located on the Eastern flank of the Central Cordillera at a relatively low altitude ranging from 1,400 metres to 2,100 metres.
San Luis has a rich history of mining in the area dating back to the 19th century. There are over 31 historical mines at the Project. The historical high grade gold and silver mineralization in these mines is related to quartz veins within andesite dykes in volcanic clastics and granodiorites host rocks. Also, and importantly, the gold and silver vein structures occur over a vertical zonation greater than 500 metres Project-wide indicating potential favourable vertical continuity of mineralization. Lastly, gold and silver mineralization has been traced on surface for over 3 kilometres along various vein structures at the Project area.
History of the San Luis Project
From 1993 to 1997, TVX Minería Ltda. ("TVX") carried out prospecting programs. The field programs were designed to evaluate the economic potential of the gold within the historical mines of the Project area. The work identified numerous vein structures resulting in high gold grades with significant amounts of free gold amenable to low-cost recovery using gravimetric methods. TVX recognized that the strongest mineralization occurred between 1,400m and 2,100m above sea level, indicating that the depth of continuity of mineralization for the many vein structures at the Project may be substantial.
In 1997 geophysical surveys were carried out over these primary gold vein deposits at the Project area. The work comprised Magnetometry, Radiometrics, and Induced Polarization. The Company is evaluating the results of these surveys and is planning a targeted follow-up program as part of its 2012 high priority target definition drill program.
Between 2004 and 2009, a joint venture between Anglogold Ashanti ("AGA") - B2Gold and the current Vendors carried out a field exploration program. In July 2004, Kedahda S. A. ("Kedahda"), a subsidiary of AGA, began exploration at the Project area. Results from this program identified several new high priority target areas at the Project where potential for near surface porphyry-style mineralization exists.
In October 2008, B2Gold followed up on AGA's field exploration programs with detailed concentration in the high priority areas that comprised well-defined mineralization. B2Gold defined numerous veins of quartz-pyrite-galena+/-chalcopyrite-calcite-iron oxide and manganese oxide in addition to verifying the high grade gold and silver epithermal style mineralization.
Additionally, and important to the Company, B2Gold identified a fine grained intrusive diorite with biotitic-potassic alteration with disseminated and veinlet-hosted pyrite at the Project. This target's signature is considered significant as it indicates a potential porphyry mineralized system that may exist at or near surface and remains unexplored. This target coupled with the prolific epithermal gold and silver mineralization explored and mined to date adds substantially to the potential size and scope of the long-term prospects for the Company.
Cliffmont is planning an aggressive exploration program of underground and surface sampling, geophysics and drilling. The San Luis district indicates the potential to localize other mineralization contained in stockwork, hydrothermal breccias and gold and gold-copper porphyry systems.
Terms of the Purchase Agreement
Under the terms of the purchase agreement, Cliffmont will acquire all of the shares of Tarana (which indirectly owns the San Luis Property) from the shareholders of Tarana (the "Vendors"), for total consideration of:
|(a)||The payment of CAD$2,000,000 as follows:|
|(i)||$100,000 upon signing the Letter of Intent, (Paid)|
|(ii)||$250,000 upon the execution of the Purchase Agreement and favourable title opinion,|
|(iii)||$250,000 upon the TSX Closing Date;|
|(iv)||$500,000 on the date that is 12 months after the Closing Date; and|
|(v)||$900,000 on the date that is 24 months after the Closing Date;|
|(b)||The issuance to the Vendors on the Closing Date of an aggregate of 10,000,000 common shares. Upon completion of the Acquisition, all common shares held by the Vendors will be subject to escrow in accordance with the policies of the Exchange; and|
|(c)||$2,000,000 in work expenditures on the San Luis Property as follows:|
|(i)||$500,000 during the period commencing from the date of the Letter of Intent to the date that is 12 months after the Closing Date; and|
|(ii)||An additional $1,500,000 on or before the date that is 24 months after the Closing Date.|
Issuance of Additional Cliffmont Shares
The Company has also agreed to issue one additional Cliffmont common share for each one ounce of gold or gold equivalent which is identified as proven or probable mineral reserves (as such term is defined in National Instrument 43-101 ("NI 43-101")) on the project in a NI 43-101 compliant technical report, subject to the issuance of a maximum of 10,000,000 Cliffmont shares.
A finder's fee of 500,000 common shares will be payable upon closing to an arms-length party.
Completion of this transaction is subject to a number of conditions, including but not limited to Exchange acceptance. The transaction cannot close until the required Exchange approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
ON BEHALF OF THE BOARD
Jeff Tindale, President and CEO
Forward Looking Statements. This Company news release contains certain "forward-looking" statements and information relating to the Company that are based on the beliefs of the Company's management as well as assumptions made by and information currently available to the Company's management. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitations, competitive factors, general economic conditions, customer relations, relationships with vendors and strategic partners, the interest rate environment, governmental regulation and supervision, seasonality, technological change, changes in industry practices, and one-time events. Should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein.
"Neither 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."
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