/NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES. THIS NEWS RELEASE DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES IN THE UNITED STATES. THE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS UNLESS REGISTERED UNDER THE U.S. SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE./
TSX VENTURE EXCHANGE: TPR.H
VANCOUVER, June 30 /CNW/ - Tapestry Resource Corp. (TSX-V: TPR.H) ("Tapestry") is pleased to announce that it has entered into a letter agreement with Gran Colombia Gold, S.A. ("Gran Colombia") effective June 30, 2010, relating to a reverse takeover transaction (the "Gran Colombia Transaction"), pursuant to which Tapestry proposes to acquire all of the issued and outstanding securities of Gran Colombia in exchange for the issuance of common shares in the capital of Tapestry (the "Tapestry Shares") by way of a three-cornered amalgamation.
Trading in the shares of Tapestry has been halted in accordance with the policies of the TSX Venture Exchange (the "TSXV") and will remain halted until such time as all required documentation has been filed with and accepted by the TSXV and permission to resume trading has been obtained from the TSXV.
The Gran Colombia Transaction is expected to be effected by way of a three-cornered amalgamation, pursuant to which a wholly-owned Panamanian subsidiary of Tapestry will amalgamate with Gran Colombia, with the amalgamated Panamanian company being a wholly-owned subsidiary of Tapestry. Tapestry will change its name to Gran Colombia Gold Corp. (the "Resulting Issuer"). Under the terms of the Gran Colombia Transaction, each Gran Colombia shareholder will receive one common share in the Resulting Issuer for every common share of Gran Colombia (the "Gran Colombia Shares") held. Upon completion of the Gran Colombia Transaction, the Resulting Issuer will carry on the business of mineral production, development and exploration.
The Gran Colombia Transaction will be an arm's length transaction.
Gran Colombia has engaged GMP Securities L.P. (the "Agent") to act as agent in connection with a brokered "best efforts" private placement of up to $275,000,000 of subscription receipts (the "Subscription Receipts") at an indicative price of $0.40 per Subscription Receipt (the "Gran Colombia Private Placement"). The Agent has the option to increase the size of the Gran Colombia Private Placement by up to 15% by notice to Gran Colombia prior to the closing of the Gran Colombia Private Placement. The gross proceeds of the Gran Colombia Private Placement, less the expenses of the Agent payable by Gran Colombia, are to be deposited in escrow at closing pending satisfaction of certain escrow release conditions (including, among other things, the completion or satisfaction of all conditions precedent to the Frontino Acquisition (as defined below) and the obtaining of all required director and third party approvals for the Gran Colombia Transaction, in each case to the satisfaction of the Agent (collectively, the "Escrow Release Conditions").
Each Subscription Receipt will be automatically convertible for no additional consideration, and without any further action by the holder thereof, into one unit (each, a "Unit") of Gran Colombia, upon the satisfaction of the Escrow Release Conditions. Each Unit shall be comprised of one Gran Colombia Share and one-half of one Gran Colombia share purchase warrant, each such whole warrant entitling the holder to purchase one additional Gran Colombia Share at an exercise price of $0.65 per share for a period of five years from the date of listing of the shares of the Resulting Issuer on the Toronto Stock Exchange (the "TSX") or TSXV (together with the TSX, the "Exchange"). The Gran Colombia Private Placement is anticipated to close in mid to late July, 2010. If the Escrow Release Conditions are not satisfied prior to 5:00 p.m. on August 31, 2010, Gran Colombia will be required to redeem the Subscription Receipts for cancellation at a redemption price per Subscription Receipt equal to the issue price thereof and a pro rata amount of any interest earned on the escrowed funds to the date of redemption. For the Agent's services in connection with the Gran Colombia Private Placement, Gran Colombia has agreed to pay to the Agent a cash commission equal to 6.0% of the gross proceeds of the Gran Colombia Private Placement and to grant to the Agent compensation options entitling the Agent to subscribe for that number of Units of Gran Colombia equal to 6.0% of the total number of Subscription Receipts sold at the issue price for a period of two years from the date of listing of the Resulting Issuer.
Conditions Precedent to Completing the Gran Colombia Transaction
The parties' obligations to complete the Gran Colombia Transaction are subject to the satisfaction of a number of conditions, including but not limited to, completion of the Gran Colombia Private Placement, Exchange approval, Gran Colombia shareholder approval, the consent of the disinterested shareholders of Tapestry, and other conditions customary for a transaction of this type.
Proposed Directors of the Resulting Issuer
The board of directors of Tapestry is currently comprised of four directors. It is anticipated that the board of directors of the Resulting Issuer will be increased to ten directors at Tapestry's annual general meeting scheduled for August 6, 2010. Tapestry will procure duly executed resignations and releases in favour of Tapestry, effective at the closing of the Gran Colombia Transaction, from each director and officer of Tapestry who will no longer be serving in such capacities and the nominees of Gran Colombia will comprise the board of directors of the Resulting Issuer.
The directors and officers of the Resulting Issuer are expected to include:
Serafino Iacono - Executive Co-Chairman and Director
Mr. Iacono has been a Co-Chairman of the board of directors of Pacific Rubiales Energy Corp. since January 23, 2008, and was a Co-Chairman of the board of directors of Pacific Stratus Energy Ltd. (a predecessor to Pacific Rubiales) from August 21, 2006 to January 23, 2008. Prior to that, Mr. Iacono was the Chief Executive Officer of Bolivar Gold Ltd., a gold producer, from February 2003 to February 2006.
Miguel de la Campa - Co-Chairman and Director
Miguel de la Campa has been a Co-Chairman of the board of directors of Pacific Rubiales Energy Corp. since January 23, 2008, and was a Co-Chairman of the board of directors of Pacific Stratus Energy Ltd. (a predecessor to Pacific Rubiales) from August 21, 2006 to January 23, 2008. Prior to that, Mr. de la Campa was the President and Chief Operating Officer of Bolivar Gold Ltd., a gold producer, from February 2003 to February 2006.
Maria Consuela Araujo - Chief Executive Officer and Director
Ms. Araujo served as Minister of Foreign Affairs in Colombia from August, 2006 to February, 2007 and as Minister of Culture in Colombia from August, 2002 to February, 2006. Since February, 2007 she has been the General Manager of MCA Consulting. Ms. Araujo studied Finance and International Relations at Externado University of Colombia and Government, Management and Public Affaires at Columbia University in New York.
Jose Francisco Arata - Director
Mr. Arata has been the President of Pacific Rubiales Energy Corp. since January 23, 2008, and was a director and Chief Executive Officer of Pacific Stratus Energy Ltd. (a predecessor to Pacific Rubiales) from August 21, 2006 to January 23, 2008. Prior to that, Mr. Arata was the Executive Vice-President, Exploration of Bolivar Gold Ltd., a gold producer, from July 1997 to February 2006.
Jorge Neher - Director
Mr. Neher has been a partner of Macleod Dixon LLP, an international law firm, since 2003. Mr. Neher specializes in resource law in Venezuela, Colombia and other Latin American countries, such as Mexico, Peru, and the Guyanas. His practice includes advice to major and junior mining companies on acquisitions, joint-ventures, corporate and project finance, regulatory and environmental matters, development of projects of precious and base metals, precious stones, industrial minerals, and coal. Mr. Neher acts for several TSX and TSXV listed corporations.
Ronald Pantin - Director
Mr. Pantin has been the Chief Executive Officer of Pacific Rubiales Energy Corp. since May 2007. Mr. Pantin worked in the Venezuelan oil industry for twenty-three years prior to founding Pacific Rubiales Energy Corp. Mr. Pantin has held a number of senior positions within Petroleos de Venezuela ("PDVSA"), most recently being President of PDVSA Services. Immediately after PDVSA, Mr. Pantin was President of Enron Venezuela. He began his professional career with Maraven, an affiliate of PDVSA where he held a variety of positions including Exploration & Production Planning Manager, Petroleum Engineering Manager, Treasurer, Operations Manager in the Production Division, and Corporate Planning Manager.
Robert Hines - Director
Mr. Hines is Managing Partner, Canada with CTPartners, an executive search firm. Mr. Hines joined CTPartners from Heidrick & Struggles where he held a number of senior leadership roles, most recently as Managing Partner, Global Operations where he was responsible for oversight of regional operations in Asia Pacific, Europe, the Middle East, Latin America and North America. Before joining the executive search industry, Mr. Hines held a number of senior positions in investment banking including: Managing Director, Co-Head of Mergers & Acquisitions, CIBC World Markets; President & Chief Executive Officer, Credit Suisse Canada; Executive Vice-President, Head of Investment Banking, Midland Walwyn Inc.; and Vice-Chairman, Merrill Lynch Canada. Mr. Hines is a member of the Independent Review Committee of the Mackenzie Financial Corporation mutual funds; the International Advisory Council of The Schulich School of Business at York University; and the Advisory Board of True Blue Connect Inc.
Stephen Wilkinson - Director
Mr. Wilkinson is a mining executive, corporate director and business consultant based in North Vancouver, British Columbia. Since September 2002, he has served as President, Chief Executive Officer and Director of ValGold Resources Ltd., an international mining development company. Mr. Wilkinson was President, CEO and Director of Northern Orion Explorations Ltd. for the period of 1999 to 2002. From 1996 to 1999, he was the Vancouver-based mining analyst for RBC Dominion Securities Inc. responsible for small capitalization gold and base metal companies. Mr. Wilkinson has extensive experience in the mining and finance industries having served as an officer and director of several private and public companies, supplemented over the past three decades by experience working for mining companies and government agencies. Mr. Wilkinson has a Bachelor of Science from the University of Western Ontario (Geology, 1976), a Master of Science from Carleton University in Ottawa, Ontario (Geology, 1983) and an M.B.A. from Clarkson University in Potsdam, New York (1995).
Ricardo Lozano - Director
Mr. Lozano is the Managing Director of Dominion Estrategia Empresarial in Bogota, and is a former director for the Madrid and Ecuador offices of Proexport Colombia, a former partner with the law firm Lozano Lozano & Abogados Asociados, a former deputy minister of the Colombian Ministry of the Interior and Justice, and the former First Secretary in charge of consular functions of Colombia to the Canadian Government. He is a member of the board of directors of Empresa de Acueducto y Alcantarillado de Bogota, and alternate board member for Empresa de Energia de Cundinamarca and a former board member of the District Institute of Tourism. Mr. Lozano is a Public Law Administrative Specialist and an Attorney from the Colegio Mayor de Nuestra Senora del Rosario in Bogota.
Joshua Fink - Director
Mr. Fink is the founder and Chief Executive Officer of Enso Capital Management. Founded in 2002, Enso Capital Management invests globally across the natural resources industry. Mr. Fink has also held positions at Tiger Investment Management, Argonaut Capital Management and Morgan Stanley Asset Management. Mr. Fink is a member of the board of advisors of the Nature Conservancy and a member of the World Economic Forum. He holds a B.A. from the University of Pennsylvania.
Proposed Senior Management
Michael Davies - Chief Financial Officer
Mr. Davies is a Chartered Accountant (Ontario) and has a Bachelor of Commerce degree from the University of Toronto. Over the last twenty years he has gained extensive international and public company experience in financial management, strategic planning and external reporting. Mr. Davies has been the Chief Financial Officer of Alange Energy Corp. since July 13, 2009, and from September 2004 to April 2007, Mr. Davies served as the Vice President, Finance for The Clorox Company of Canada. His diverse background also includes senior finance roles with several public companies, including LAC Minerals, IMAX Corporation, Amtelecom Communications, Energentia Resources, Pamour Inc. and Giant Yellowknife Mines.
Peter Volk - General Counsel and Corporate Secretary
Mr. Volk received his LL.B. from Osgoode Hall and M.B.A. from Schulich School of Business. He has acted as General Counsel and Corporate Secretary of Alange Energy Corp. since July 13, 2009, as General Counsel and Secretary of Pacific Rubiales Energy Corp. since January 23, 2008, and as General Counsel and Secretary of Medoro Resources Ltd. since February, 2003. In the past, Mr. Volk has held the position of General Counsel and Secretary with Pacific Stratus Energy Ltd. (a predecessor of Pacific Rubiales) from October 26, 2004 until January 23, 2008 and with Bolivar Gold Corp. from July, 1997 until February, 2006.
Jose R. Oro - Chief Operating Officer
Mr. Oro is both a geologist and an engineer. Mr. Oro has over 35 years working in several different continents across the metal and mineral spectrum. Mr. Oro is the former Director of the Mining and Geology Department of Cuba. In addition to working with junior and senior mining companies, Mr. Oro worked in the Latin American Resource Sector for Coopers and Lybrand LLC. Mr. Oro received post graduate degrees in Remote Sensing and Geological Exploration in the Netherlands and Russia.
About Gran Colombia
Gran Colombia is a Panama domiciled gold exploration, development and mining company focused on prospective producing, development-stage and exploration-stage gold properties, with its head office located at Calle 90, No 19A-46, Suite 602, Bogota, Colombia. Since its incorporation on January 5, 2010, Gran Colombia has entered into agreements to acquire various interests in several projects, representing a large gold exploration and production area throughout Colombia.
Gran Colombia Properties
As at the date hereof, Gran Colombia has entered into agreements to acquire interests in five mineral projects in Colombia, as follows:
Gran Colombia and Medoro Resources Ltd. ("Medoro"), a company listed on the TSXV (TSX-V: MRS), have entered into an agreement whereby Gran Colombia and Medoro, through a joint venture company ("JVCo"), will acquire all of the assets of Frontino Gold Mines Ltd. ("FGM"), located near the city of Segovia, approximately 220 kms north-east of Medellin in Antioquia, Colombia, from its liquidator, that is comprised of one private mining property and two exploration licenses and related assets, for consideration of COL$380,000,000,000 (approximately US$200 million), subject to adjustment in accordance with the purchase and sale agreement (the "Frontino Acquisition"). Gran Colombia will provide the acquisition costs (less due diligence costs and the deposit of COL$15,000,000,000 (approximately US$7.5 million) which shall be shared equally by Gran Colombia and Medoro) and any capital required in respect of the Frontino Acquisition in exchange for a 95% interest in JVCo. Medoro will have a 5% full carried interest in JVCo and the right to nominate one representative out of four to the joint venture committee, with Gran Colombia nominating the remaining three representatives comprising the joint venture committee. The mine operator will be Gran Colombia. A success fee of US$3,000,000, subject to adjustment in certain circumstances, will also be payable by Gran Colombia, at closing, to a company of which Mr. Iacono and certain of his associates is a principal in recognition of the services rendered by Mr. Iacono and his associates in negotiating and completing the Frontino Acquisition.
Medoro will have an option for a period of one year from the closing of the Frontino Acquisition to acquire an additional 45% interest in JVCo by paying 50% of all costs, including the acquisition costs, capital costs and the success fee paid by Gran Colombia to Mr. Iacono from the date of closing of the Frontino Acquisition up to the date of exercise of such option, plus a premium of 25% of such costs. If Medoro exercises its option, Medoro will have the right to nominate two representatives to the board of directors of JVCo and to the joint venture committee, with Gran Colombia nominating the remaining two representatives to each of the board of directors of JVCo and the joint venture committee.
The Frontino mine has been in production since 1852 and is estimated to have produced more than 4.5 million ounces of gold. FGM currently operates three underground mines (El Silencio, Providencia and Sandra K), and a mill that is operating at about 400 tonnes per day. FGM reported gold production in 2009 of approximately 55,359 ounces of gold from 175,246 tonnes of ore with a head grade of 10.25 g/t.
The Frontino mines exploit a series of mesothermal veins which are predominantly composed of quartz, pyrite, sphalerite, galena, gold and silver. The veins strike north-south or northeast and are hosted by granite of the Segovia Batholith. The Segovia Batholith is exposed in surface outcrops over an area of approximately 270 kilometres north-south by 50 kilometres east-west. The Batholith is limited by the Otu fault on the west and the Nus fault to the east. The Segovia Batholith is also intruded by basic dikes that are used as guides for exploration of mineralized structures.
Gold at Frontino is fine-grained and is associated with sulphides such as pyrite, galena and sphalerite. The highest gold grades are correlated with higher percentages of sulphides. The National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") compliant resource estimates for the Frontino Properties are shown in the tables below. The Indicated Mineral Resource estimate and the Probable Mineral Reserves estimate are reported at a 7.1 g/t gold cut-off grade and the Inferred mineral resource estimate is reported at a 6.5 g/t cut-off grade.
June 9, 2010 Indicated Mineral Resources (inclusive of mineral reserves)
Cutoff g/t Type Tonnes Grade g/t Ounces
7.1 Gold 315,000 13.1 132,000
June 9, 2010 Probable Mineral Reserves
Cutoff g/t Type Tonnes Grade g/t Ounces
7.1 Gold 210,000 13.3 90,000
Probable mineral reserves total 90,000 ounces of gold and represent a conversion of nearly 70% of the Indicated Mineral Resource. This is due mostly to the fact that much of the resources have been derived from production channel sampling. Infill drilling, exploration drilling and exploration channel sampling is planned to expand the overall mineral resource and mineral reserve base at the Frontino Gold Mines.
June 9, 2010 Inferred Mineral Resources
Cutoff g/t Type Tonnes Grade g/t Ounces
6.5 Gold 914,000 15.4 453,000
Scott E. Wilson Consulting, Inc. ("SEWC") of Denver, Colorado completed the new resource estimate under the direction of Scott E. Wilson who is a qualified person as defined by NI 43-101. Mr. Wilson is responsible for, approves of, and has verified the technical disclosure in this news release (including sampling, analytical and test data). The NI 43-101 compliant technical report with respect to the Frontino Gold Mines will be posted on SEDAR at www.sedar.com within 45 days of this news release.
The new mineral resource estimate for Frontino is based on 3-D geologic models that incorporate 53,398 individual samples from the underground workings on the Frontino properties. High grade outlier assays were capped to reduce the potential for overestimation of grades. The model uses 3-D blocks which are 2 metres in height, width and depth. Block model grades were interpolated using a combination of inverse distance and kriging grade estimation techniques.
SEWC used industry-accepted standards to classify this new resource. The mineral resource is classified using a combination of distance to the nearest sample, the number of samples, and number of holes used to estimate each block, while also taking into account database quality, sample integrity and geologic understanding. The cut-off grades were based on the 2009 actual mining and processing costs, an assumed milling recovery of 85% and an assumed gold selling price of US$1,000 per ounce. SEWC did not classify any resources as Measured Mineral Resources due to the lack of documentation of industry accepted standards for quality assurance and quality control procedures for the FGM Laboratory.
Part of the FGM cost structure includes costs related to pensions, unions and a collective bargaining agreement. SEWC assumed that these costs would be funded separately and not from mine production. The cut-off grades used for the reporting of the mineral resource and reserves at Frontino were calculated with actual 2009 costs excluding the aforementioned costs. If mine production is required to fund those costs, the cut-off grade will increase, causing a reduction in the stated mineral resources and mineral reserves.
Gran Colombia entered into a purchase agreement in order to acquire a 100% interest in the El Zancudo Project, located in the Titiribi mining district in Antioquia, Colombia from "Consorcio de Inversionistas CDI, S.A." ("CDI") for US$15 million. The acquisition consists of eight mining and exploration contracts and applications with a total area of approximately 6,000 hectares, and includes several underground mines (currently inactive), a 120 tonnes per day gold processing plant, and an existing processing agreement with a third party to recover gold and silver from scoria (slag) from past operators located on the property. The scoria processing agreement entitles CDI to receive a 6.5% to 7% gross royalty. Gran Colombia has paid US$5 million of the purchase price to date, with the balance of the purchase price being payable as follows:
a. US$5,000,000 on October 29, 2010; and
b. US$5,000,000 on April 29, 2011.
The El Zancudo Project is located in the western flank of the Cordillera Central, where schists of the Arquia Complex, Upper Tertiary sediments of the Amaga Formation and Late Miocene andesite porphyry intrusions host the mineralized bodies. Gold mineralization occurs as veins related to the emplacement of the porphyry stocks.
The mineralization consists of epithermal to mesothermal, intermediate sulfidation type veins, which occur as a series of parallel and sub-parallel veins exploited over a strike length of more than 3,500 metres with an average width of 0.35 metres (varying up to 0.80 metres). The known vertical extent of mineralization is at least 900 metres.
The Titiribi mining district has been mined since 1793 and despite a long history of gold and silver mining, mines on the El Zancudo properties have not been systematically explored. Exploration opportunities at El Zancudo include potential for additional mineralization on extensions of the veins and potential for multiple additional veins (mapped on surface and mined at shallow levels) at depth.
Additional exploration targets being investigated have the potential for bulk mineable gold and silver mineralization in zones where a high density of veining has developed, and for zones with disseminated mineralization in sedimentary rocks. In addition, there is potential for bulk mineable porphyry gold-copper mineralization related to the porphyry intrusions.
Gran Colombia retained Dr. Stewart D. Redwood to prepare a NI 43-101 compliant technical report dated effective April 6, 2010 in respect of the El Zancudo Project.
The exploration results disclosed by this press release have been reviewed, verified (including sampling, analytical and test data) and compiled by Dr. Redwood during preparation of the technical report. Dr. Redwood is based in Panama City, Republic of Panama, and is a Fellow of The Institute of Materials, Minerals and Mining (IMMM) and a "qualified person" (as such term is defined in NI 43-101).
Gran Colombia entered into a purchase agreement to acquire an 80% interest in the Concepción Project from "Compania de Minas Providencia, S.A.". The project is located in the municipalities of Concepción, San Vicente, El Penol and Barbosa in Antioquia and features approximately 3,535 hectares of exploration and mining contracts and applications, including the former "San Pedro" and "Criadero" mines. Gran Colombia paid a purchase price of US$800,000; and committed to (i) an exploration program of 25,000 meters of drilling within two years and (ii) carrying the remaining 20% interest holder through to completion of a feasibility study. The 20% holder has an option to sell such interest at a price determined based on US$40 per gold ounce applied to 20% of recoverable gold as detailed in a feasibility study.
Located in the Cordillera Central, the Concepción Project comprises metamorphic rocks of the Cajamarca Complex of Paleozoic age, mainly graphitic schists, intruded by the Antioquia Batholith of Upper Cretaceous age. The main targets in the area are high grade mesothermal gold veins and the potential for bulk mineable, low grade gold deposits similar to the Gramalote deposit located 42 km north-east of Concepción, which has an inferred mineral resource of 2.4 million ounces of gold contained in 74.4 million tonnes with an average grade of 1.0 g/t (Meister, S. N., 2009. B2Gold Corp., Gramalote Ridge Project, Department of Antioquia, Colombia at p. 103. NI 43-101 report for B2Gold Corp., Vancouver, 27 February 2009, filed on SEDAR under the profile of B2Gold Corp. at www.sedar.com). Veins at Concepción are of two types, quartz veins and quartz-sulfide veins. An underground exploration program is currently being carried out at Concepción along with trenching and prospecting.
Gran Colombia retained Dr. Stewart D. Redwood to prepare an NI 43-101 compliant technical report dated effective May 31, 2010 in respect of the Concepción Project.
The exploration results disclosed by this press release have been reviewed, verified (including sampling, analytical and test data) and compiled by Dr. Redwood during preparation of the technical report.
Gran Colombia acquired the Mazamorras Project, which is located in the department of Narino, 40 km north-east of Pasto. The property includes four concessions covering approximately 5,976 hectares, which includes a potentially prospective copper-gold porphyry system. This project was acquired for a purchase price of US$4 million, payable over 30 months. In addition, Gran Colombia has provided a 2.5% net smelter return royalty with a buyout provision of US$3 million; and an exploration commitment of US$4.75 million over 30 months. Gran Colombia has paid an aggregate of US$375,000 to date, with the balance of the cash portion of the purchase price being payable as follows:
a. US$325,000 by August 20, 2010;
b. US$650,000 by May 20, 2011;
c. US$650,000 by November 20, 2011;
d. US$1,000,000 by May 20, 2012; and
e. US$1,000,000 by November 20, 2012.
Gran Colombia retained SRK ES Explorations Services Ltd. ("SRK") based in Cardiff, United Kingdom, to prepare an NI 43-101 compliant technical report dated effective April, 2010 in respect of the Mazamorras Project.
The Mazamorras Project is an early stage exploration property with potential for copper-gold-molybdenum porphyry and epithermal-type deposits situated in the convergence zone of the three Cordilleras of the Colombian Andes.
Mineralization in the area is hosted by an 8 km by 2.5 km belt of propylitic-phyllic-potassic-silicic alteration localized along the Mazamorras Fault and hosted by a Tertiary Igneous Complex. The belt of alteration is oriented north-northwest to south-southeast and contains at least three mineralized porphyry bodies. Mineralized stockworks are composed of millimetre-scale veinlets and have a preferred orientation parallel to subparallel to the Mazamorras Fault. In addition, shear zones commonly subparallel to the Mazamorras Fault and containing gold-silver bearing quartz veins have also been recognized.
Grade correlations between copper and gold (for over 700 rock chip samples) within the Tertiary Igneous Complex rocks show a median ratio of 0.95 ppm gold for 1% copper, i.e., almost 1:10,000.
The exploration results disclosed by this press release have been reviewed, verified (including sampling, analytical and test data) and compiled by SRK under the supervision of Karen Volp who is a Member of the Australian Institute of Mining and Metallurgy and a "qualified person" (as such term is defined in NI 43-101).
Carla Gran Colombia
Gran Colombia entered into an agreement to acquire the Carla Gran Colombia Project, which includes 16 properties totalling approximately 6,000 hectares of exploration ground and some mining assets located in the Segovia and Remedios municipalities of Antioquia, close to the Frontino gold mines. Pursuant to an agreement with Carla Resources, S.A., Gran Colombia agreed to pay a purchase price of US$15,000,000 paid over 18 months. Gran Colombia has paid an aggregate of US$1 million to date, with the balance of the cash payments being payable as follows:
a. US$4,000,000 by July 05, 2010;
b. US$5,000,000 by February 05, 2011; and
c. US$5,000,000 by October 05, 2011.
Gran Colombia retained SRK to prepare a technical report dated June 18, 2010 on the Carla Gran Colombia Project.
The Carla Gran Colombia Project's concessions are located to the south and north of the Frontino properties. These concessions are mostly within the Segovia Batholith (granodiorite) bounded by the north south trending Otu and Nus faults to the west and east respectively.
Mineralization in the area comprises multiple stage mesothermal quartz vein-hosted gold silver occurrences varying from a few centimetres to more than three metres in thickness, with an average of one metre. Veins are controlled by regional structural events most likely related to the north-south orientated Otu-Pericos fault, although there are additional minor vein orientations.
The Segovia Remedios district has a long history of gold mining related to quartz vein mineralization. The adjacent Frontino gold mine has been operational since 1852.
The technical information disclosed by this press release has been reviewed, verified (including sampling, analytical and test data) and compiled by SRK under the supervision of James Gilbertson who is a Chartered Geologist with the Geological Society of London (GSL) and a "qualified person" (as such term is defined in NI 43-101).
Selected Financial Information of Gran Colombia
The following unaudited financial information for the period ended April 30, 2010 has been provided by Gran Colombia. Such information is subject to all other information contained in the relevant financial statements disclosed in the filing statement to be prepared in connection with the Gran Colombia Transaction.
During the period from incorporation through April 30, 2010, Gran Colombia raised cash net proceeds of approximately US$21.6 million from the issuance of Gran Colombia Shares and used US$6.3 million of these funds in connection with investing activities, principally for payments toward the acquisitions of mineral properties as described above. As at April 30, 2010, Gran Colombia had cash and cash equivalents amounting to US$15.7 million.
Currently, there are 125,000,000 Gran Colombia Shares issued and outstanding. This includes the 90,000,000 Gran Colombia Shares issued pursuant to a private placement completed on April 27, 2010 (the "April 2010 Private Placement") at $0.25 per share for gross proceeds of $22.5 million. Other than broker options to purchase an aggregate of 5,400,000 Gran Colombia Shares at a price of $0.25 per common share for a period of two years from the listing of the Resulting Issuer on the TSXV issued in connection with the April 2010 Private Placement, no stock options, warrants or other securities entitling holders to acquire Gran Colombia Shares are outstanding. Gran Colombia is not a reporting issuer and its securities are not listed or posted for trading on any stock exchange. It is anticipated that up to 40,000,000 options at an exercise price of $0.40 per share will be granted upon the closing of the Gran Colombia Transaction, such options to be received by approximately 40 persons.
Completion of the Gran Colombia Transaction is subject to a number of conditions, including Exchange acceptance and disinterested shareholder approval. The Gran Colombia 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 filing statement to be prepared in connection with the Gran Colombia Transaction, any information released or received with respect to the Gran Colombia Transaction may not be accurate or complete and should not be relied upon. Trading in securities of Tapestry should be considered highly speculative.
This news release contains "forward-looking information", which may include, but is not limited to, statements with respect to the future financial or operating performance of Tapestry, Gran Colombia and its projects. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Tapestry and Gran Colombia to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of this press release and Tapestry and Gran Colombia disclaim, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.
Cautionary Note Concerning Resource and Reserve Estimates
The mineral resource and mineral reserve figures referred to in this press release are estimates and no assurances can be given that the indicated levels of gold will be produced. Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available. By their nature resource and reserve estimates are imprecise and depend, to a certain extent, upon statistical inferences which may ultimately prove unreliable. If such estimates are inaccurate or are reduced in the future, this could have a material adverse impact on the Resulting Issuer.
Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that mineral resources can be upgraded to mineral reserves through continued exploration.
Estimates of mineral resources and reserves may be materially affected by environmental permitting, legal and other relevant issues.
Due to the uncertainty that may be attached to inferred mineral resources, it cannot be assumed that all or any part of an inferred mineral resource will be upgraded to an indicated or measured mineral resource as a result of continued exploration. Confidence in the estimate is insufficient to allow meaningful application of the technical and economic parameters to enable an evaluation of economic viability worthy of public disclosure (except in certain limited circumstances). Inferred mineral resources are excluded from estimates forming the basis of a feasibility study.
The TSXV has in no way passed upon the merits of the proposed transaction described herein and has neither approved nor disapproved the contents of this news release.
Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.
All information contained in this news release with respect to Gran Colombia was supplied by Gran Colombia for inclusion herein.
Neither the securities of Tapestry nor the securities of Gran Colombia have been, nor will be, registered under the U.S. Securities Act or any state securities laws and such securities may not be offered or sold within the United States or to, or for the account or benefit of, U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an applicable exemption from such registration requirements is available. This news release does not constitute an offer or sale of securities in the United States.
SOURCE TAPESTRY RESOURCE CORP.
For further information: For further information: Marilyn Miller - President, (604) 609-6110