VANCOUVER, BRITISH COLUMBIA, Jan. 19, 2010 (Marketwire) -- Cortez Gold Corp. (TSX VENTURE:CUT.P) -
Further to its press release of December 1, 2009 announcing the termination of the proposed transaction with Seabridge Gold Inc., Cortez Gold Corp. announced today that it has entered into an Option Agreement dated January 14, 2010 with Strategic Metals Ltd. ("Strategic") whereby Cortez may acquire a 50% interest in 48 Yukon quartz mineral claims located in the Mining District of Watson Lake, Yukon (the "Proposed Acquisition").
Strategic is a junior mining company listed on the TSX Venture Exchange (the "Exchange") (symbol "SMD") specializing in generative exploration in northwestern Canada. Cortez is a capital pool company listed on the Exchange (the "Exchange") under the trading symbol "CUT".
The Proposed Acquisition consists of a 50% interest in 48 Yukon quartz mineral claims more commonly known as the Timber Claims in southeast Yukon, together with the surface rights, mineral rights, personal property and permits associated therewith (the "Properties").
In consideration of the Proposed Acquisition and to acquire a 50% interest in the Properties, Cortez will:
(a) pay Strategic not less than an aggregate $150,000, as follows:
(i) $25,000 upon Exchange Acceptance (the "Closing Date");
(ii) an additional $50,000 after the first anniversary of the
Closing Date; and
(iii) an additional $75,000 after the second anniversary of the
(b) incur exploration expenditures of not less than an aggregate
$1,000,000 as follows:
(i) $200,000 on or before December 31, 2010;
(ii) an additional $300,000 on or before December 31, 2011; and
(iii) an additional $500,000 on or before December 31, 2012.
Cortez shall be the operator until the option is fully exercised, at which point Cortez and Strategic shall enter into a Joint Venture Agreement.
Cortez is a capital pool company and the Proposed Acquisition will constitute its Qualifying Transaction (as such term is defined in the policies of the Exchange). The Proposed Acquisition is an arm's length transaction and upon completion of the Proposed Acquisition, Cortez expects to be a Tier 2 Mineral Exploration Issuer. No Non-Arm's Length Party (as defined in the policies of the Exchange) to the CPC has any direct or indirect beneficial interest in the Properties or in shares of Strategic.
Summary of the Target's Significant Assets
The Timber property is a porphyry copper-molybdenum-gold prospect located in southern Yukon Territory, 50 km northeast of the community of Ross River. It comprises 48 mineral claims covering about 1000 hectares. Access is by helicopter.
The Timber property covers a system of Mid Cretaceous, high level, granitic plugs and dykes that cut Late Paleozoic and Mesozoic sedimentary rocks. Hornfels and skarns are developed in the sediments adjacent to the intrusions.
Mineralization is found in both the sediments and the intrusions. It is categorized as belonging to three main types:
-- copper-molybdenum+/-gold+/-silver+/-lead+/-zinc in porphyry-style quartz
vein stockworks developed in hornfelsed metasediments and intrusive
-- silver+/-zinc+/-lead in skarnified calcareous sedimentary rocks located
near the intrusions; and,
-- copper-silver-zinc-lead in breccia pipes developed in sedimentary rocks
believed to be underlain at a shallow depth by a buried pluton.
Soil geochemical sampling has proven to be an effective exploration technique, and moderate to strong, multi-element soil geochemical anomalies have been identified near most of the mineral showings. However, the area has been strongly glaciated and other areas of mineralization could be hidden beneath glacial or fluvial deposits.
Helicopter-borne magnetic and variable time domain electromagnetic (VTEM) surveys flown in 2008 showed that outcropping granitic plugs are marked by magnetic lows while hornfels altered zones underlie magnetic highs. The largest area of porphyry style, quartz vein stockwork and a nearby mineralized breccia zone lie within a magnetic low that closely resembles lows associated with known intrusive plugs, suggesting that these predominantly sediment-hosted showings are underlain by a sizeable body of intrusive rock.
Diamond drilling was done in part of the main zone of quartz vein stockwork in 2007. It confirmed the presence of widely dispersed but sub-economic grade porphyry-style mineralization. The drilling also confirmed the presence of a large shallowly buried intrusion underlying the mineralized zone and its associated soil geochemical anomaly. Three holes were completed before cold weather terminated the drill program. These holes tested only a small part of the areas of interest to a relatively shallow depth.
Porphyry-style mineralization typically responds well to induced polarization (IP) surveys. Areas that are enriched in sulphide minerals show elevated chargeability and resistivity data can be used to interpret alteration zonation, which in turn can be used to infer possible zoning within the hydrothermal system that deposited the mineralization. IP surveys are particularly useful in strongly glaciated areas, like the Timber property, where soil geochemical data may not be a reliable indicator of hidden mineralization and where alteration zonation is difficult to recognize because of limited bedrock exposure. This type of survey is especially effective in high-level geological settings where the strongest zones of mineralization may not reach to surface.
W. A. Wengzynowski, P. Eng. of Archer, Cathro & Associates (1981) Limited is the qualified person as required under NI 43-101 and has reviewed the technical information contained in this press release.
No concurrent financing will be required by Cortez to complete the Proposed Acquisition.
Board of Directors and Management of the Resulting Issuer
Upon closing of the transaction, it is contemplated that the current directors will remain on the board, namely Robert Eadie, Gary Arca, Kent Kirby, Allan Fabbro and Andrew de Verteuil. It is further contemplated that Robert Eadie will remain president and chief executive officer and Gary Arca will remain chief financial officer.
Robert Eadie, President, Chief Executive Officer & Director
Mexico City, Mexico
Mr. Eadie (age 44) is a self-employed business owner and in the past 15 years, has been actively involved in public resource companies, raising over 90 million dollars for various exploration and development projects around the world. He began his career as a corporate investor and public relations consultant and went on to establish his own investor relations consulting business. He has since become a manager, officer or director of a number of junior public companies, primarily in the natural resource sector. Mr. Eadie is currently President and a director of Starcore International Mines Ltd., a gold production and exploration company focussed on Mexico, a director of American Consolidated Minerals Corp, a gold exploration company focusing on developing mineral assets in Nevada, USA, CEO and director of Highland Resources Inc., a company focused on precious metals in Ontario, Canada, and President and CEO of Cortez and Parlane Resource Corp., both capital pool corporations. All of these companies are headquartered in Vancouver, British Columbia and listed on the TSX-V, with the exception of Starcore International Mines Ltd. which is listed on the Toronto Stock Exchange. In 2008, Mr. Eadie was invited to join and completed the Quantum Shift Program, an exclusive by- invitation-only leadership development program limited to 40 of Canada's most promising entrepreneurs. The Program is founded by KPMG Enterprise and the Richard Ivey School of Business and is sponsored by the TD Commercial Banking, the Toronto Stock Exchange and the Globe and Mail.
Gary Arca, Chief Financial Officer, Corporate Secretary & Director
Delta, British Columbia
Mr. Arca (age 49) is a Chartered Accountant (CA) and has been a member of the Canadian Institute of Chartered Accountants and British Columbia Institute of Chartered Accountants since 1980. He was a partner with two separate public accounting firms from 1996 to December 2005. Mr. Arca has extensive experience dealing with public companies and start-ups both from the perspective of management and as a consultant, and has served as a director of seven publicly traded resource companies in the past. In addition to the Company, he is currently a director and Chief Financial Officer of Starcore International Mines Ltd., and a director, Chief Financial Officer and Corporate Secretary of American Consolidated Minerals Corp., Highland Resources Inc. and Parlane Resource Corp., all of which are listed on the TSX Venture Exchange, except for Starcore International Mines which is listed on the Toronto Stock Exchange.
Kent Kirby, Director
Vancouver, British Columbia
A self-employed businessman, Mr. Kirby (age 42) has been President of Adnet Communications Inc. from January 2000 to the present. Adnet is a private company engaged in servicing publicly traded companies, meeting their website requirements. Prior thereto, he acted as a mining contractor, with various contracts for several private and public mining exploration companies throughout North America. Mr. Kirby served as a director for St. Elias Mines Ltd., Farrier Resources Corp, and Highland Resources Inc. all junior resource companies, and is currently a director of Cortez and Parlane Resource Corp. Mr. Kirby graduated from BC Institute of Technology with a diploma in Business Administration in 1991.
Allan Fabbro, Director
Vancouver, British Columbia
Mr. Fabbro (age 52) is currently President of American Consolidated Minerals Corp., a precious metals exploration and development company listed on the TSX Venture Exchange. He has over 30 years experience in both the finance and mining industries, most recently as an investment advisor with Canaccord Capital Corporation, specializing in the natural resource sector. Mr. Fabbro is also a director of Parlane Resource Corp., which is listed on the TSX Venture Exchange.
Andrew de Verteuil, Director
North Vancouver, British Columbia
Mr. de Verteuil (age 30) is a Certified General Accountant (CGA) and has been a member of Certified General Accountants Association of Canada and Certified General Accountants Association of British Columbia since 2009. He is Controller of Starcore International Mines Ltd. and American Consolidated Minerals Corp. and has worked with those companies since March 2007. Prior thereto he gained audit and tax experience with Amisano Hanson (July 2004 to January 2007) and Gohren & Associates (February 2002 to June 2004), both Chartered Accountant firms. Previously Mr. de Verteuil served as a director for Lebon Gold Mines Limited, which was listed on the CNSX.
Description of Significant Conditions to Closing
Pursuant to Section 2.1 of Exchange policies, as the proposed Qualifying Transaction is not a Non Arms Length Qualifying Transaction, the Company will not be required to obtain shareholder approval of the Qualifying Transaction but will be submitting a Filing Statement for Exchange acceptance. Sponsorship for this Qualifying Transaction is not required under the policies of the Exchange.
Conditions to closing the Proposed Acquisition include approval of the Proposed Acquisition as a Qualifying Transaction by the Exchange. 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 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.
ON BEHALF OF THE BOARD of Cortez Gold Corp.
Robert Eadie, President & Chief Executive Officer
The Exchange has in no way passed upon the merits of the proposed transaction. 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.