tsx.v: MQ, Frankfurt: T9N, otc-bb: MQSTF
VANCOUVER, May 25 /CNW/ - As previously reported (March 6th, 2008) MetalQuest Minerals Inc. ("MetalQuest" or the "Company") completed an asset monetization strategy in 2008 in order to continue an "evaluation of potential merger, acquisition and exploration opportunities in British Columbia and Peru."
As a result of these efforts, MetalQuest plans to acquire all the outstanding shares of Canadian Ore Processors Corp., ("Canadian Ore Processors") a private Canadian corporation. Canadian Ore Processors was formed for the express purpose of developing gold ore toll processing opportunities in northern Peru. The principals of Canadian Ore Processors have extensive international experience in all facets of mineral processing and have developed a comprehensive business plan to process ores currently being mined by approximately 6500 small scale miners in the area of northern Peru, as estimated by the Peruvian Ministry of Energy and Mines.
Canadian Ore Processors has acquired US$10 million in financing from the Grafton Resources Investment Trust ("Grafton") through a stock swap between Grafton and Minera CanOrePro Ltda. S.A. (Minera CanOrePro); a private Peruvian corporation and a subsidiary of Canadian Ore Processors. As a result of the acquisition of Canadian Ore Processors, MetalQuest will own 50% of Minera CanOrePro. Grafton will own the remaining 50% through their US$10 million investment.
As a condition of the Grafton investment in Minera CanOrePro, MetalQuest will be seeking shareholder approval at the June 26, 2009 Annual General and Special Meeting, to consolidate MetalQuest shares on a three old for one new basis and change the name to Canada Gold Corporation ("Canada Gold"). On approval, Canada Gold will issue 1,190,000 common shares for 100% of the issued and outstanding shares of Canadian Ore Processors, as full consideration. As additional consideration, Grafton will issue a call option to Canada Gold to purchase, at Canada Gold's discretion, within 36 months, Grafton's interest in Minera CanOrePro for US$10 million in cash or the equivalent in Canada Gold shares at a minimum floor price of US$0.55, or the thirty day average trading price, whichever is higher, subject to regulatory approval, at the time of exercise.
Andrew Neale P.Eng., currently CEO and Director of Canadian Ore Processors will become the CEO of Canada Gold and will join the board as an executive director. Andrew has over 20 years experience in all facets of mineral processing, including operations management, environmental management and government relations. Andrew was previously Vice President-Technical Services with Freeport-McMoRan Copper and Gold in both Indonesia and New Orleans. Andrew has a BSc and MSc in Mineral Processing Engineering from the University of Alberta
Rick Plotzki, currently COO and Director of Canadian Ore Processors will assume the role of COO of Canada Gold and will join the board as an executive director. Rick has over 25 years experience in mine operations, maintenance, and engineering & construction management. Rick has managed the design and commissioning of some of the world's largest milling operations, including Freeport's Grasberg C3 and C4 expansions, Escondida's C4 expansion, the Collahuasi expansion, and the Las Pelambres construction. Rick is fluent in Spanish and previously worked in Peru in the late 80s and early 90s at the then Southern Peru Copper Corporation (now owned and operated by Grupo Mexico).
Dave McMillan, currently President and CEO of MetalQuest will take on the role of Executive Chairman of Canada Gold. Dave has over 40 years in the resource industries, and his career has spanned manufacturing, marketing, sales and financing, including 17 years as an investment advisor as VP, Senior VP, Director, and member of the Executive Committee for Yorkton Securities and Yorkton Holdings Inc. Dave holds board positions on several publicly traded resource companies, and is an advisor to various venture capital companies.
Commenting on the acquisition, Dave McMillan adds he is pleased that all three parties (MetalQuest, Canadian Ore Processors and Grafton) have come to agreement on the acquisition. "We are excited to have Andrew and Rick join Canada Gold and bring their years of mineral processing, engineering and construction management experience which complements our experience in corporate finance, marketing and the public markets. Similarly, we are grateful to have the financial backing of the Grafton Fund which covers much of the financial risk of constructing and commissioning the processing plant."
Grafton and its associates will assist Canada Gold in the disposal of the Grafton ordinary shares, held by Minera CanOrePro, to raise funds to construct and commission the toll processing plant. The principals of Grafton and its associates have experience in using this type of share exchange and disposal mechanism to provide investee companies with new funding. It is also planned that Grafton and its associates will work closely with Canada Gold in various aspects of advancing the project.
Grafton is a registered closed-end fund managed by Newland Fund Management LLP of London, England and was incorporated for the purpose of securing and developing investment opportunities in the natural resource sector. Grafton is managed by David Hutchins and Kjeld Thygesen, two natural resource fund managers in the sector, with over 60 years experience between them.
The above is subject to shareholder and final TSX-V approvals.
ABOUT METALQUEST MINERALS INC.
MetalQuest Minerals Inc. is an exploration and development company, based in Vancouver, British Columbia, Canada. Currently, MetalQuest has approximately 25 million shares outstanding, owns approximately 2.7 million shares in Animas Resources Inc. (TSX.V: ANI) and will receive future payments from Animas of US$900,000 for the previously announced sales agreement on certain properties in Mexico. For more information, visit www.metalquest.ca.
On Behalf of the Board, (x)Dave McMillan(x) Dave McMillan President & C.E.O. MetalQuest Minerals Inc.
This communication to shareholders and the public contains certain forward-looking statements. Actual results may differ materially from those indicated by such statements. All statements, other than statements of historical fact, included herein, including, without limitations statements regarding future production, are forward looking statements that involve various risks and uncertainties. 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. Neither the TSX Venture Exchange nor it's Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchnage) accepts responsibility for the adequacy or accuracy of this release.