OAKVILLE, ON, Oct. 29, 2012 /CNW/ - Giyani Gold Corp. (TSXV: WDG) ("Giyani Gold") is pleased to announce that it has closed the previously announced Rock Island Transaction (the "Transaction") with Kytanite Development Corp. ("Kytanite") (see news releases dated October 6, 2010 and October 28, 2011) and that Giyani Gold has acquired Kytanite's interest in the Rock Island Trading (Pty) Ltd. ("Rock Island") gold properties, comprised of two prospecting licenses which were issued to Rock Island in the Limpopo province of South Africa.
Pursuant to the Transaction, Giyani Gold's wholly-owned subsidiary Obliwell (Proprietary) Limited has acquired 100% of the issued and outstanding shares of Lexshell 831 Investments (Pty) Ltd. ("Lexshell 831"). Lexshell 831 holds 80% of the issued and outstanding shares of Lexshell 837 Investments (Pty) Ltd. ("Lexshell 837") with the balance of 20% held by Giyani Gold's Black Economic Empowerment ("BEE") partner Malungi Resources (Pty) Ltd. Lexshell 837 holds 45% of the issued and outstanding shares of Rock Island. Lexshell 837 acquired the Rock Island shares from Johan Bernard Scheffer ("Scheffer") under a sale of shares agreement (the "Scheffer Agreement") dated December 2, 2010 between Lexshell 837, Scheffer, and Rock Island. Giyani Gold has paid Rand1,500,000 and issued 250,000 common shares to Scheffer under the Scheffer Agreement.
Pursuant to the Transaction, Giyani Gold has paid US$2,500,000 and issued 2,500,000 common shares in the capital of Giyani Gold to Kytanite, of which 9% will be granted to local Black Economic Empowerment ("BEE") partners. The amount paid, and the shares issued to Scheffer under the Scheffer Agreement have been set off against the amount paid, and the shares issued to Kytanite. Giyani Gold, along with its BEE partners and the other 45% shareholder in Rock Island, being Corridor Mining Resources, a wholly owned subsidiary of the Limpopo provincial government economic development agency, Limdev, holds 90% of Rock Island with the balance of 10% reserved for the community trust of Limpopo.
Pursuant to the Transaction, Giyani Gold holds an indirect interest in the prospecting rights held by Rock Island (the "Rights"). The Rights consist of two prospecting licenses, for four properties: Klein Letaba-Frankie, Horseshoe, Birthday, and Louis Moore. The properties contain 9 past producing mines, which historically contained high-grade and near-surface gold deposits. The Rights are located within a 13 km long corridor of the Giyani Archean Greenstone Belt, a historically prolific and underexplored gold producing region.
The parties agreed to complete the Transaction prior to receipt of certain approvals from the South African Department of Mineral Resources (the "DMR") relating to the transfer of ownership interests in the Rights held by Rock Island in connection with the Transaction. The parties have submitted the necessary applications for such approvals and expect that such approvals will be received in due course, however, there is no definitive timeline for the receipt of such approvals and failure to obtain such approvals could adversely impact the ability to conduct prospecting activities pursuant to the Rights.
Giyani Gold's Executive Chairman Duane Parnham and two other Giyani Gold nominees are members of the Rock Island board of directors.
Closing of Escrow Financing
Giyani Gold is also pleased to announce the closing of the escrowed portion of its CAD$9 million non-brokered private placement (the "Concurrent Financing") previously announced on October 25, 2010 (see news release dated October 25, 2010) to subscribers that qualified as "accredited investors" under applicable Canadian securities laws. A portion of the Concurrent Financing, representing 25% of the total subscriptions, was previously completed in October 2010, with the remainder of the subscriptions held in escrow (the "Escrowed Private Placement") subject to the completion of the Transaction. Upon closing of the Escrowed Private Placement, C$5.88 million in escrowed subscription proceeds was released to Giyani Gold, of which, C$2.45 million was used to close the Transaction.
Pursuant to the completion of the Escrowed Private Placement, Giyani Gold issued 9,651,247 common shares together with 4,825,623 warrants to purchase common shares. Each whole warrant is exercisable at a price of CAD$0.85 per share for a period of two years from the date of issuance. An aggregate total of 13,333,330 common shares, 6,666,665 warrants to purchase common shares, and 1,428,572 flow through shares were issued pursuant to the Concurrent Financing.
Giyani Gold has received final acceptance from the TSXV of the securities being issued pursuant to the completion of the Escrowed Private Placement. Such securities will be issued in reliance upon exemptions from the prospectus and registration requirements of applicable Canadian securities legislation, and will be subject to a hold period until February 27, 2013.
The balance of the proceeds received from the Escrowed Private Placement will be used by Giyani Gold primarily to fund the continued exploration of the South African prospecting rights that comprise the Giyani Gold Project.
This news release has been reviewed and approved by R.S. Middleton P.Eng., who is acting as the Qualified Person for Giyani Gold under National Instrument 43-101. Additional information and corporate documents may be found on www.sedar.com and the Giyani gold website, www.giyanigold.com.
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 news release.
On behalf of the Board of
Giyani Gold Corp.
Forward Looking Statements
This news release includes certain forward-looking statements or information. All statements other than statements of historical fact included in this release or other future plans, objectives or expectations of Giyani Gold, including, but not limited to, statements about the Rights, the DMR approval of the Transaction and future exploration and development activities, are forward-looking statements that involve various risks and uncertainties. Such forward looking statements are based on management's current beliefs and assumptions, including the assumption that the necessary DMR approvals will be received in a timely manner and that the Rights will not be adversely impacted in the future. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Giyani Gold's plans or expectations include risks relating to the failure to receive DMR approval in a timely manner, or at all, the actual results of current exploration activities, fluctuating gold prices, possibility of equipment breakdowns and delays, exploration cost overruns, availability of capital and financing, general economic, market or business conditions, regulatory changes, timeliness of government or regulatory approvals and other risks detailed herein and from time to time in the filings made by Giyani Gold with securities regulators. Giyani Gold expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as otherwise required by applicable securities legislation.
SOURCE: Giyani Gold Corp.
For further information:
Luke Vigeant, Head of Communications
Giyani Gold Corp.
Tel: +1.905.844.1456 X237
Chuck Allen, President
Giyani Gold Corp.
Tel: +1.905.844.1456 X223