Aug. 19, 2010 (Filing Services Canada) -- MegaMoly Inc. (MGY - TSX Venture), is pleased to announce that it has signed an option agreement with a private consortium of title holders (the "Vendors") to earn up to a 100% interest in the "Amarillo" property located in the San Juan province of Argentina. The Agreement is subject to regulatory approval. This is the first step in the realignment and repositioning of the Company as discussed in the press release dated August 18, 2010.
The Amarillo gold-copper-silver project is located within the Veladero-El Indio gold belt on the Argentine side of the Andes. This belt is fast becoming an attractive area for major mining companies that are investing substantial funds exploring for world class gold deposits.
The Amarillo land-holding covers over 7,200 hectares of intensely altered sedimentary and intrusive rocks that represent the upper levels of two or more large porphyry-related hydrothermal systems. The Company is impressed with the magnitude and intensity of the alteration systems and the highly anomalous gold and copper values from previous explorer's trench sampling. The Company has completed its initial phase of technical and legal due diligence on the property and has initiated a program to compile and analyze earlier data. The Company plans to develop an exploration program for Amarillo which will be announced in the near future.
The complete set of previous explorer's significant drilling and trench sampling values has been obtained by the Company. Highlights from historic work (Minera Argentina Gold S.A. in 1994) include a significant number of high grade results, including:
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HOLE ID FROM TO THICK (M) AU G/T AG G/T CU%
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DDH1 15 16 1 8.37 Na 0.00
DDH1 16 17 1 52.6 Na 0.00
DDH2 22.5 24 1.5 3.2 17 0.81
DDH2 24.54 25.35 0.81 13.6 6.4 0.09
DDH5 43.8 44.1 0.3 1.88 49 5.62
DDH5 48.31 48.49 0.18 2.27 47 3.74
DDH16 31.18 32.18 1 1.74 24 0.00
DDH16 54.65 54.85 0.2 9.23 82 0.01
DDH16 126.8 127.75 0.95 1.75 4.4 0.02
DDH17 103.3 103.5 0.2 3.14 33 0.73
DDH19 40.3 40.6 0.3 1.9 11 0.01
DDH19 96.35 96.6 0.25 4.81 55 1.45
DDH19 98.15 98.95 0.8 1.78 13 0.24
DDH19 98.95 99.22 0.27 8.37 81 0.94
DDH19 105.9 106.05 0.15 6.4 40 2.06
DDH19 106.05 106.45 0.4 10.4 65 0.57
DDH19 106.45 106.85 0.4 2.31 7.5 0.10
DDH19 106.85 107.06 0.21 10.4 35 0.14
DDH19 107.06 107.25 0.19 12 58 0.48
DDH19 107.25 108.62 1.37 1.73 9.7 0.10
DDH19 115.9 116.1 0.2 1.74 6.7 0.01
DDH20 36.8 37 0.2 3.35 209 47.90
DDH20 85.35 85.6 0.25 1.84 29 0.58
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Subject to regulatory approval, the Company can earn up to 100% interest in the property. From an initial down-payment in 2010 up until December 31, 2014 the Company will, based on achievement of pre-determined technical and commercial objective results invest up to $5,630,000 on property expenditures and make payments of up to $2,340,000 plus 6,000,000 shares to the Vendors in order to earn 100% ownership of the property. In 2010 the Company will advance $80,000 to maintain the property in good standing and pay $100,000 to the Vendors in addition to issuing 800,000 shares. These initial payments earn the Company a 10% interest in the Amarillo property. A 2% Net Smelter Royalty ("NSR") payable to the Vendors is also contemplated in the agreement. The Company has the right under the NSR agreement to acquire 1% of the NSR for $2,600,000 and the further right of first refusal to acquire the remaining 1% at the price and terms equal to those offered by a qualified third party. All cash payments quoted are in US$.
"The signing of the Amarillo Option Agreement heralds the beginning of the strategic change in direction for Mega Moly," stated John Icke, Interim CEO and Director of Mega Moly. "This project is located in a well known gold producing region of Argentina and the Company believes it may have excellent potential. A detailed exploration plan is being developed and will be announced in due course."
The content of this news release has been reviewed by Gustavo Fernandez, P.Geo and Paul MacRae, P.Eng who are Qualified Persons as defined by National Instrument 43-101 both acting as consultants for the Company. The Company does not have access to the full assay results of drilling on the property and is unable to confirm the results disclosed above without further work on the property being performed. The results have not yet been verified and are provided for background only and should not be relied upon for investment purposes.
On behalf of the Board of Directors
"John Icke"
Interim Chief Executive Officer & Director
For further information, please contact:
John Icke
604-696-6516 or
Nicola Street Capital
Tel: 604.569.0056
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.
Source: MegaMoly Inc. (MGY - TSX-V)
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