TSX Venture: GPL
CALGARY, Jan. 24 /CNW/ - General Properties Ltd. ("General Properties" or
the "Corporation") announced today that it has entered into a non arms length
letter of intent dated December 28, 2007 with CaNev Resources Corporation and
Yarnell Mining Company, Inc. (the "Vendors") for an option to acquire a
70% working interest in the past producing Yarnell gold mine property (the
"Property"), located 70 miles from Phoenix, Arizona.
The Vendors will retain a 30% carried interest in the Property. The
letter of intent is subject to a number of conditions including approval of
the TSX Venture Exchange, approval of the board of directors of General
Properties and approval of General Properties' disinterested shareholders.
Subject to all approvals, the Corporation anticipates closing the transaction
in April 2008.
The Property consists of approximately 1,000 acres of patented and
unpatented ground. The Property was last worked by BEMA Gold Corporation, who
completed a feasibility study in 1998.
The letter of intent confirmed the following terms of the option:
The Corporation will pay to the vendor the sum of $174,695 USD as a
refundable deposit and on receipt of conditional approval for the transaction
and negotiation of definitive agreements, a further amount of $100,000 USD
shall be paid. From this point forward, the Corporation will be responsible to
pay all reasonable expenses of Yarnell incurred in connection with the
Property as well as costs incurred to maintain the Property. General
Properties shall also commission a technical report on the Property prepared
in compliance with National Instrument 43-101 ("NI 43-101") and, provided the
report discloses an historical geological gold resource of at least
250,000 ounces, General Properties will make a further payment of
On completion of a positive feasibility study, General Properties shall
make a pre-production payment of $1,000,000 USD and upon receipt of all
operating permits, licenses and approvals to commence construction of a mine,
General Properties will make a pre-production payment to the Vendors of
$1,000,000 USD and six months after commercial production is declared, General
Properties shall pay to the Vendors a production bonus payment of
General Properties will also be required to pay an amount of $30,000 USD
quarterly in arrears to fund local operations of the Property.
In addition, the Corporation will be responsible for payment of all
outstanding fees under the original agreement between the Vendors and BEMA
Gold Corporation including a sliding scale net smelter royalty with a minimum
rate of 1.5% under $400.00 per oz. and a maximum rate of 4.00% above
$800.00 per oz., a $660,000 payment when key permits are issued, and a
post-production payment of $675,000 six months after commercial production has
The Vendors and Mr. Robert Knight, President of General Properties have
also agreed to extend the term of a debt owed to a company controlled by Mr.
Knight in the amount of approximately $115,000 Cdn to closing of the
transaction when it shall be repaid by the Vendors from the proceeds of the
The acquisition of the Property is a related party transaction as certain
directors of General Properties currently own the Property. The transaction is
subject to the approval of the independent directors of General Properties
following completion of a technical report prepared in accordance with NI
43-101 and due diligence. In the event the independent directors determine not
to proceed with the transaction, then no deposit monies will be forfeited. The
independent directors have had limited opportunity to conduct due diligence to
date. The option price was established by negotiation between Mr. Robert
Knight and the Vendors and will be reviewed by the independent directors as
part of their consideration of the transaction. The transaction will be
subject to Policy 5.9 of the TSX Venture Exchange and accordingly will require
the approval of disinterested shareholders. General Properties is exempt from
the requirement to obtain a formal valuation for the transaction as its
securities are only listed on the TSX Venture Exchange.
Management of the Corporation believe that the acquisition of the
Property presents an opportunity to further develop General Properties as an
exploration and production company focused on precious and base metals.
The feasibility study referenced herein was not reported in present day
NI 43-101 standards.
There can be no assurance that the Corporation will be able to obtain the
required approvals to complete the transaction.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
For further information:
For further information: Robert B. Knight, President, COO and CFO, (403)
804-5200, or by email email@example.com; Peter W. Holmes, Vice-Chairman & CEO,
(520) 733-9770, or by email firstname.lastname@example.org; www.gplmining.com