Oct. 20, 2009 (Filing Services Canada) -- Blue Cove Capital Corp. (BCV.P - TSX Venture), further to its news release dated August 24, 2009, the Company is pleased to announce that it and its wholly-owned subsidiary, BM Nevada Mining Corp. ("BMN"), have entered into a definitive mineral property purchase agreement (the "Agreement") dated October 15, 2009, with Golden Predator Mines (US) Inc. ("Golden Predator US") and Great American Minerals Inc. ("GAM" and together with Golden Predator US, the "Vendors") to acquire, through BMN, the Vendors' collective interest in certain mineral exploration properties located in the Battle Mountain and Cortez Trends of North Central Nevada, USA including the Modoc Project, UNR/Keystone Project, Trail Project and the Platte River Joint Venture Project (collectively, the "Properties"). The acquisition of the Properties (the "Acquisition") includes the assignment of all of the Vendors' right, title and interest in the Properties as well as the obligations in certain underlying agreements to which the Properties are subject. The Acquisition is subject to TSX Venture Exchange ("TSXV") approval and is intended to constitute the Company's qualifying transaction and the Modoc Project to constitute Blue Cove's qualifying property under the policies of the TSXV. Pursuant to the Agreement, closing of the Acquisition is to occur on or before November 30, 2009.
The Agreement provides that on closing the Company will pay to the Vendors an aggregate of US$1,000,000, issue to the Vendors an aggregate of 1,000,000 common shares in the capital of the Company (the "Shares") and pay certain maintenance costs ("Costs") incurred by Golden Predator US estimated at US$104,000. The Vendors will retain a 1.5% net smelter return royalty on the sale of all minerals produced from the Properties other than the Platte River Project, on which there will be a 0.75% net smelter return royalty. Blue Cove has paid to the Vendors a CDN$25,000 non-refundable payment which will be credited against the Costs which are payable on closing. On closing of the Acquisition, Golden Predator US shall have the right to appoint one individual as a director of Blue Cove until Blue Cove's next annual general meeting and to appoint one individual as a nominee as a director at Blue Cove's next two annual general meetings. In addition, for a period of two years from closing of the Acquisition, Golden Predator US shall have a pre-emptive right to participate in future equity issuances of Blue Cove in order to maintain its proportionate ownership interest as at closing.
The Properties are all gold exploration properties located in the Battle Mountain, Cortez/Cortez Hills and Eureka Gold Districts of Nevada. Numerous major corporate-owned gold mines in the districts & trend include Newmont's Lone Tree & Phoenix Mine complexes, Barrick & Goldcorp's jointly owned Marigold Mine, Barrick's Pipeline, Cortez & Cortez Hills gold mines &deposits, US Gold's Tonkin Springs Gold Mine and Barrick's Archimedes Gold Mine.
The Modoc Project is located in Lander County, Nevada two miles west of Newmont's Phoenix Mine project in the Battle Mountain Mining District.
The UNR/Keystone lower plate gold project lies within the Battle Mountain-Cortez Gold Trend, approximately 18 miles south of Barrick Gold's Cortez & Pipeline Mine and 12 miles south of the new Cortez Hills Mine.
The Platte River Joint Venture Project is on the northeast flank of the Roberts Mountains, southeast of the Cortez Hills Mine Project (Barrick Gold) and just east of US Gold's Tonkin Springs Mine Project.
The Trail Project located in the Eureka Mining District in Eureka County, Nevada is located on the west flank of Lookout Mountain approximately two miles north of Staccato Gold's Lookout Mountain Gold Deposit and Barrick Gold's Archimedes Gold Mine is currently in production approximately four miles north.
The Modoc Project is comprised of 120 unpatented mining claims encompassing approximately 2,150 acres. The Company understands that: (a) the Vendors together currently hold a 100% interest in the Modoc Project, except for 12 claims in which the Vendors hold a 1/3 interest; (b) Gale Peak Resources Group ("Gale Peak") holds the remaining 2/3 interest which it has leased to the Vendors until February 1, 2019; (c) in order to maintain the leasehold interest, the Vendors must pay the following advance minimum royalty payments: US$20,000 by March 31, 2010; US$30,000 by March 31, 2011; US$40,000 by March 31, 2012; US$50,000 by March 31, 2013; and US$60,000 by March 31, 2014 and each year thereafter; (d) the Vendors must also incur a total of US$500,000 in exploration expenditures prior to February 1, 2013 (US$75,000 of which must be incurred by February 1, 2012); (e) Gale Peak is also entitled to a 1.33% production royalty on the claims subject to the leasehold interest; (f) the Vendors may purchase the remaining two-thirds interest in the 12 claims from Gale Peak and one-half of the production royalty at any time for US$2,000,000; and (g) all advance minimum royalty payments and production royalty payments will be credited toward this purchase price. On completion of the Acquisition, Blue Cove would assume these obligations of the Vendors.
The Company has engaged Ernest Hunsaker CPG, a qualified person under National Instrument 43-101 to prepare a technical report in respect of the Modoc Project.
Platte River Project
The Company understands that: (a) the Vendors together currently hold a 49% joint venture interest in the unpatented claims (the "Platte Claims") and the leasehold interests (the "Platte Lease" and the "Blue Cap Lease") that comprise the Platte River Joint Venture Project; (b) Platte River Gold (US) Inc. ("Platte") holds the other 51% joint venture interest; (c) the Platte River Project consists of five project areas, including the Gabel, Frazier Creek, Vinini, Mo and Summit Projects for a combined land package consisting of approximately 303 unpatented mining claims; (d) the Platte Lease is in respect of nine of the claims and is for a period of twenty years commencing April 11, 2006; (e) the Platte Lease requires annual payments of between US$5,000 to US$8,500 and required exploration expenditures of US$275,000 by October 2010 which has not been incurred; (f) the claims subject to the Platte Lease are also subject to net smelter return royalties of between 3% and 4.5%; (g) the Blue Cap Lease is in respect to six of the claims and is for a period of 20 years commencing on October 2, 2006; (h) the Blue Cap lease requires annual payments of $2,000; and (i) the claims subject to the Blue Cap Lease are subject to net smelter return royalties of between 3.0% and 3.5%.
UNR/Keystone Project and Trail Project
The Company understands that the Vendors together currently hold a 100% interest in the UNR/Keystone Project, which consists of 231 unpatented mining claims covering approximately 4,110 acres and a 100% interest in the Trail Project which consists of 30 unpatented mining claims.
In connection with the Acquisition, the Company has retained Canaccord Capital Corporation (the "Agent") to arrange a brokered financing of a minimum total of 8,000,000 units of the Company ("Units") at a price of CDN$0.25 per Unit to raise a minimum of CDN$2,000,000 (the "Financing"). Each Unit will be comprised of one Share and one-half of one share purchase warrant ("Warrant"). Each whole Warrant will entitle the holder thereof to purchase an additional Share at price of CDN$0.35 for a period of 18 months. The Agent will be paid a commission equal to 7% of the gross proceeds raised and will be issued that number of units ("Agents Units") as is equal to 7% of the number of Units sold. Each Agent's Unit will be comprised of one Share and one-half of one share purchase warrant with the same terms as the Warrants. The net proceeds of the financing will be used to fund the Acquisition, the recommended work program on the Modoc Property as set out in a National Instrument 43-101 compliant technical report, costs associated with the Qualifying Transaction and to provide general working capital.
Upon closing of the Acquisition and subject to TSXV acceptance, the Company intends to change its name to "Battle Mountain Gold Corp."
Closing of the Acquisition is subject to several conditions including, among other things, TSXV acceptance and the completion of the Financing.
BLUE COVE CAPITAL CORP.
Completion of the above transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV requirements, majority of the minority approval of the shareholders of the Company. Where applicable, the 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 management information circular or filing statement to be prepared in connection with the transaction any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
Neither the 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 release.
This press release contains forward-looking information within the meaning of Canadian securities laws. Such information includes, without limitation, information regarding the completion of the proposed acquisition of the Properties and the Financing; and the anticipated business plans of the Company. Although the Company believes that such information is reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking information provided by the Company are not guarantees of future results or performance, and that actual results may differ materially from those in forward looking information as a result of various factors, including, but not limited to, the state of the financial markets for the Company's equity securities, the state of the market for gold or other minerals that may be produced generally, recent market volatility; variations in the nature, quality and quantity of any mineral deposits that may be located, the Company's ability to obtain any necessary permits, consents or authorizations required for its activities, to raise the necessary capital or to be fully able to implement its business strategies and other risks associated with the exploration and development of mineral properties. The reader is referred to the Company's most recent annual and interim Management's Discussion and Analysis for a more complete discussion of such risk factors and their potential effects, copies of which may be accessed through the Company's page on SEDAR at www.sedar.com.
Source: Blue Mountain Capital Corp. (TSX-V BCV)
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