TORONTO, ONTARIO, Nov. 13, 2009 (Marketwire) -- Victoria Gold Corp. (TSX VENTURE:VIT) ("Victoria" or the "Company") is pleased to announce, as part of its ongoing non-core gold asset value optimization program, the sale of the subsidiary of the Company which holds interests in the Tassawini gold project and the BRL joint venture exploration properties in Guyana to Takara Resources Inc. (TSX VENTURE:TKK) ("Takara"). In consideration for the acquisition, Takara shall issue 21,000,000 shares on a post consolidated basis, resulting in Victoria holding 56% of the issued and outstanding shares of Takara plus additional consideration if Takara meets certain exploration or production milestones.
"This is an ideal outcome for Victoria", said Chad Williams, President, CEO, and Director. "Our majority equity participation in Takara allows us to participate in the upside generated from these high-potential Guyanese gold projects that will now be managed by a highly motivated and entrepreneurial company focused on those assets; our priority continues to be the advancement of our core gold projects: Cove in Nevada and Eagle in the Yukon."
The Tassawini property and BRL Venture
The Tassawini property is 100% owned by Victoria Gold (through an indirectly held subsidiary) and hosts 436,000 Indicated and 61,500 Inferred gold ounces (10,766,600 tonnes at 1.3 g/t and 614,000 tonnes at 1.7 g/t respectively). Tassawini is an advanced- stage gold exploration property situated in the Barima-Waini District of Northwestern Guyana, South America. It is located approximately 170 kilometres northwest of the capital, Georgetown. The property encompasses two contiguous adjoining Prospecting Licences (the "Tassawini PL" and the "Anaturi PL") and four Medium Scale Mining Permits ("MSMP's") and has a total area of 9,650 ha.
The BRL Venture is a joint venture between StrataGold Guyana Inc ("SGI", an indirectly held subsidiary of Victoria Gold) and Newmont Overseas Exploration Limited, a subsidiary of Newmont Mining Corporation (NYSE:NEM) ("Newmont") with a large strategic land position in Northwest Guyana within the Arakaka Gold District. As of July 1, 2009, SGI held a Participating Interest of 31.96% and Newmont held the remaining 68.04% Participating Interest in the BRL Venture. The district has been popular with local placer miners for the past 100 years, but until recently, had not been explored systematically using modern techniques. These regional exploration efforts originally covered an area of over 4,000 square kilometres resulting in two key projects areas: (1) Monosse and (2) Projects "A" and "B" (see Victoria News Release dated July 20, 2009), which host over 25 individual gold exploration targets. Trenching and drilling is now underway on projects A and B.
Terms of the deal
Takara will purchase Victoria's interest in the Tassawini project and BRL Venture assets along with the requisite subsidiaries. In consideration for the acquisition, Takara shall issue 21,000,000 shares on a 3:1 post consolidated basis, resulting in Victoria holding a minimum 56% of the issued and outstanding shares of Takara at closing of the acquisition. For a period of 5 years following the closing of the transaction, Victoria shall be entitled to receive up to an additional 4,000,000 shares of Takara or $400,000 at Victoria's discretion, based on Takara meeting certain operational or exploration milestones. Victoria shall be entitled to a pre-emptive right to participate in future equity financings in Takara in order to maintain a minimum 19% shareholding. Additionally, Victoria is entitled to appoint up to 2 members to Takara's board of directors. The transaction is expected to close in early 2010 and is conditional on Takara obtaining the approval of its shareholders for the proposed transaction, and certain other customary regulatory approvals. Sale of the assets is subject to the terms of the BRL Venture Agreement which include meeting certain conditions of the preemptive right which may or may not be applicable with respect to the BRL Property.
Victoria is a high growth gold company with a focus on adding value per share through efficient exploration, project development, accretive acquisitions and effective marketing. Maintaining a low risk profile through project diversification, sound financial management, and operating in secure jurisdictions are key priorities for Victoria's management team.
On Behalf of Victoria Gold Corp.
Chad Williams, P. Eng, CEO, President & Director
Cautionary Language and Forward-Looking Statements
This press release includes certain statements that may be deemed "forward-looking statements". All statements in this discussion, other than statements of historical facts, that address future exploration drilling, exploration activities and events or developments that the Company expects, are forward looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include metal prices, exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Accordingly, readers should not place undue reliance on forward-looking statements.
This news release and the information contained herein does not constitute an offer of securities for sale in the United States and securities may not be offered or sold in the United States absent registration or exemption from registration.
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 release.