May 10, 2011 (TheNewswire.ca) --
Vancouver, British Columbia, Canada - May 10, 2011 - Canada Gold (TSXV:CI) (OOTC:CNGZF) Corporation (TSX-V: CI, Frankfurt: T9N, OTC-BB: CNGZF)("Canada Gold" or the "Company") announces that it has entered into a Letter of Intent ("LOI") to acquire a 100% interest in 4 prospecting licenses, potentially hosting gold and other minerals, totaling approximately 702 square kilometers in North-Eastern Tanzania, from the Eden Group of Tanzania.
These prospecting licenses, collectively called the Sindeni Project, are located within the Mozambique Geological Belt, and are located approximately 40 kilometers from the northeastern boundary of Canaco Resources Inc. (TSXV:CAN) , (TSX-V: CAN), Magambazi Property, in the Handeni district in the Tanga region, northeastern Tanzania. The Mozambique Belt is highly deformed with shear zones developed on a north-eastern and mostly west north-western trend. Folding is present at both regional and local scale. These structures are an important target area for gold mineralization within the fold hinge zones, while erosion of the latter results in numerous small-scale alluvial workings within the Handeni District. The Canaco Magambazi Property is located on a northwest-southeast trending structure with artisanal gold workings nearby. The Sindeni Property has similar northwest-southeast trending structures, also with artisanal gold workings nearby. Canada Gold's initial exploration focus will be on two large areas near these artisanal workings.
The consideration for the acquisition are cash payments of US $1,050,000, incurring exploration expenditures of US $4,000,000 and the issuance of 3,500,000 shares from treasury over a 3 year period. The optionor retains a 2.5% net smelter return royalty of which, 1.5% can be purchased for US $2,000,000 at any time, once all considerations have been satisfied.
------------------------------------------------------------------- |Payment Date |US Cash | |Shares |Work Commitment| |-----------------------------------------------------------------| |On TSX Filing* |$ 50,000 | |- -- | |-----------------------------------------------------------------| |On TSX-V Approval |$ 100,000 | |1,000,000 |- | |-----------------------------------------------------------------| |On 6 month Anniversary |$ 150,000 | |500,000 |- | |-----------------------------------------------------------------| |On 12 month Anniversary|$ 150,000 | |500,000 |$ 1,000,000 | |-----------------------------------------------------------------| |On 18 month Anniversary|$ 150,000 | |500,000 |- | |-----------------------------------------------------------------| |On 24 month Anniversary|$ 150,000 | |500,000 |$ 1,500,000 | |-----------------------------------------------------------------| |On 30 month Anniversary|$ 150,000 | |500,000 |- | |-----------------------------------------------------------------| |On 36 month Anniversary|$ 150,000 | |- |$ 1,500,000 | |-----------------------------------------------------------------| |Total |$ 1,050,000| |**3,500,000|$ 4,000,000 | -------------------------------------------------------------------
*The initial cash payment of US $50,000 is refundable should the TSX-V disallow the transaction
** All shares issued are subject to a minimum 4 month hold from the date of issuance or as directed by the TSX-V
Canada Gold has commissioned Mr. Nico Scholtz, (Pr. Sci. Nat), the principal geologist of Scarab Environmental & Geological Enterprises to review the property and provide a NI 43-101 compliant report. In addition, Canada Gold has contracted Rexattorneys of Tanzania to complete the requisite due diligence on the status and ownership of the prospecting licenses and issue an independent legal opinion.
With 13,014,118 issued shares, Canada Gold currently has sufficient cash and near cash financial assets which are adequate to fund the initial cash payments and the anticipated first phase exploration program, the results of which will determine future programs and the appropriate exploration budgets.
The acquisition of the above prospecting licenses and the consideration payable are subject to the TSX-V and regulatory approvals, with a formal agreement to act as part of the final regulatory filing expected in June 2011. Mr. Nico Scholtz, Pri. Sci. Nat., principal geologist of Scarab, a qualified person under NI 43-101 has reviewed and approved the technical content of this news release.
Neither 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.
For more information, please contact the office or visit www.canadagold.com.
On behalf of the Board,
"Dave McMillan"
Dave McMillan
President & CEO
Chad McMillan
Vice President, Communications
1 (604) 685-5851 - Phone
1 (604) 685-7349 - Fax
ir@canadagold.com
www.canadagold.com
Canada Gold Corporation
Suite 520 - 700 West Pender Street
Vancouver, BC, Canada
V6C 1G8
Cautionary Note Regarding Forward-Looking Statements: Certain disclosure in this release, including statements regarding the Company's plans for and intentions with respect to exploration of the Sindeni Project, constitutes "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and Canadian securities legislation. In making the forward-looking statements in this release, the Company has applied certain factors and assumptions that the Company believes are reasonable, including that the Company is able to obtain any required government or other regulatory approvals and any required financing to complete the Company's planned exploration activities, that the Company is able to procure equipment and supplies in sufficient quantities and on a timely basis and that actual results of exploration activities are consistent with management's expectations. However, the forward-looking statements in this release are subject to numerous risks, uncertainties and other factors relating to Canada Gold's operation as a mineral exploration company that may cause future results to differ materially from those expressed or implied in such forward-looking statements. Such uncertainties and risks may include, among others, actual results of the Company's exploration activities being different than those expected by management, uncertainties involved in the interpretation of drilling results and geological tests, delays in obtaining required government or other regulatory approvals or financing, inability to procure equipment and supplies in sufficient quantities and on a timely basis, equipment breakdowns and bad weather. 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. Readers are cautioned not to place undue reliance on forward-looking statements. Canada Gold does not intend, and 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 required by law.
Copyright (c) 2011 Thenewswire.ca - All rights reserved.