|September 14, 2011|
Mammoth Capital Corp. Announces Qualifying Transaction
|September 14, 2011 - Vancouver, British Columbia. Mammoth Capital Corp. (TSXV: "MTH.P.") (the "Company") is pleased to announce that it has entered into an option agreement (the "Option Agreement") dated September 8, 2011 with Yale Resources Ltd. ("Yale") pursuant to which the Company can earn a 100% interest in 11 mining concessions, known as the Urique Project, (the "Property") owned by Yale. The Property, as further described below, covers approximately 289 square kilometres in south-west Chihuahua State, Mexico and is prospective for gold and silver. The Option Agreement will constitute the Company's qualifying transaction ("Qualifying Transaction") pursuant to the policies of the TSX Venture Exchange (the "Exchange").|
The Property is located in south western Chihuahua State, 240 km southwest of the city of Chihuahua, within the southern Sierra Madre Mineralized belt. The project is located immediately north of El Sauzal gold mine (Goldcorp.) and immediately south of the Monterde project (Kimber Resources). Proximal projects to the Urique Project include Batopilas (MAG Silver), and San Miguel (Paramount Gold) as well as the Palmarejo (Coeur d'Alene Mines) and Bolivar (Dia Bras) mines.
The geologic setting for the Urique Project is a Cretaceous age volcano-sedimentary assemblage within the Sierra Madre Occidental Geological Province. The stratigraphic sequence exposed at Urique comprises andesitic to ryolitic flows and tuffs of both the Lower Volcanic Complex and the Upper Volcanic Supergroup. Mineralization typically occurs within the Lower Volcanic Complex at or near the same stratigraphic level as other well known deposits and mines in the region.
The Property comprises two areas: Urique North and Urique South and two high priority targets have been identified: El Rosario in the southern portion of the Property and San Pedro in the northern portion of the Property. However, exploration work performed within the Property since 2007 has included first pass reconnaissance visits to an additional several past producing mines and prospects. This included the sampling of several new areas of precious metal mineralization, including Guasimitas, with two 80 cm samples that assayed 16.35 and 8.38 g/t gold, and several small mines with high silver values in excess of 500 g/t from dumps and veins.
The San Pedro target is host to multiple variably oriented gold bearing veins. In addition to covering the continuation of the Sangre de Cristo deposit - an important historical gold mine - the San Pedro Target has discrete high grade gold-bearing veins and disseminated mineralization within the altered volcanic host rocks suggesting that the area has the potential to contain a bulk tonnage gold deposit. The strong argillic alteration of the host rocks has been interpreted to represent the upper portions of a high sulfidation system.
Highlight samples from the San Pedro target are:
The El Rosario target, as currently defined, measures approximately 175 metres wide by 400 metres long and contains four historic workings on multiple levels with the El Rosario adit being the largest with greater than 600 metres of underground development. The mineralization and alteration mapped on surface and underground is open along strike and to depth and has never been drilled.
At El Rosario fieldwork has identified at least five vein-sets hosted within altered andesite. Multiple +1 kilogram per tonne silver assays have been collected from various narrow veins throughout the El Rosario target. Significant silver mineralization of up to 257.0 g/t silver and 0.78 g/t gold over five metres also occurs within the altered andesite host rocks, which adds to the bulk tonnage potential of the target.
The presence of multiple vein sets hosting high grade silver-gold mineralization, as well as felsic intrusives that appear to be related to widespread alteration and mineralization of the andesitic host rocks, suggests that the El Rosario target area has the potential to be further expanded.
Highlights from the underground sampling within the Rosario tunnel include:
- 9.74 g/t gold and 356.7 g/t silver over 1.68 m,
- 2.16 g/t gold and 92.5 g/t silver over 2.93 m,
- 3.60 g/t gold and 108.2 g/t silver over 1.87 m,
- 5.65 g/t gold and 95.9 g/t silver over 0.45 m,
- 3.69 g/t gold and 112.7 g/t silver over 1.10 m, and
- 3.53 g/t gold and 243.1 g/t silver over 0.40 m.
The Option Agreement
Under the terms of the Option Agreement in order to earn an undivided 70% interest in and to the Property, the Company must (i) pay $50,000 to Yale, of which $25,000 was paid at the time of signing of the Option Agreement as a non-refundable deposit, (ii) issue a total of 1,800,000 shares to Yale over a four year period, and (iii) incur a total of $3,000,000 in exploration expenditures on the Property over a four year period. The Company must issue 200,000 common shares upon receipt of Exchange approval to the proposed qualifying transaction and must issue a further 100,000 shares within 6 months of such approval. Subsequent share issuances of 300,000 at the 12 month anniversary and 400,000 on each subsequent anniversary will also be due in order to keep the Option Agreement in good standing. The Company must also incur a minimum of $300,000 in exploration expenditures in the first 12 months following Exchange approval, a further $500,000 in the following year, $800,000 in the third year and $1,400,000 in the final year of the Option Agreement.
In order to earn the remaining 30% interest in the Property from Yale, the Company must issue an additional 500,000 common shares and must have completed a resource estimate on the Property delineating at least 300,000 equivalent ounces of gold in the measured and indicated categories. Furthermore, the Company must issue an additional share for each equivalent ounce of gold within the measured and indicated categories, subject to a minimum of 300,000 shares and a maximum of 2,000,000 shares. If the Company elects not to proceed to earn the remaining 30% interest in the Property, the parties will form a 70-30 joint venture and will contribute to further exploration in accordance with their respective joint venture interest.
In connection with the Qualifying Transaction the Company intends to complete a brokered private placement to raise gross proceeds of up to $600,000 the details of which will be announced in a subsequent press release.
Concurrently with completion of the Qualifying Transaction the Company will appoint Mr. Constantine Salamis to its board of directors. Mr. Edward Farrauto will continue as the Company's Chief Executive Officer and a Director, and Mr. Nigel Kirkwood, a director of the Company, will be appointed Chief Financial Officer. The other directors are Mr. Marshall Farris and Mr. Mark Hunter. The following are brief bios of the proposed board members following completion of the Qualifying Transaction:
Edward Farrauto - CEO and Director
Edward Farrauto has 19 years of experience as a senior financial officer in working for private and public companies. His experience encompasses financial and regulatory compliance and public company management. Mr. Farrauto is a Certified General Accountant and has been a member of the Certified General Accountants Association since 1991.
Nigel Kirkwood - Chief Financial Officer and Director
Nigel Kirkwood has 20 years of international experience working in accounting, mergers and acquisitions and corporate finance advisory services. He is a member of the Institute of Chartered Accountants of Ontario. Mr. Kirkwood spent 16 years based in London, England where he was a Director in Mergers & Acquisitions in the investment bank at Citigroup. Mr. Kirkwood obtained an MA in Economics at Queen's University. Mr. Kirkwood was appointed CFO of Philippine Metals Inc. in March 2010 and CFO and Director of Citation Resources Inc. in October 2010, both listed on the Exchange.
Marshall Farris - Director and Corporate Secretary
Marshall Farris has 20 years of experience assisting public and private companies with corporate operations, capital development, corporate communications and regulatory compliance activities.
Mr. Farris is also a founder and principal of Ascenta Finance Corp., an exempt market dealer which provides financing services to junior public issuers. He serves as President & Director of Philippine Metals Inc., Director of Empire Capital Corp. and is a former director of Mindoro Resources Ltd. and Prize Mining Corp. and a co-founder and former director of Panoro Minerals Ltd., all Exchange listed companies.
Mark Hunter - Director
Mark Hunter joined Ascenta Capital Partners Inc. as a principal in 2001 where he has been primarily responsibility for general operations and for business development. Most recently Mr. Hunter has been active with Ascenta Finance Corp. where he plays a key role in the operations and compliance side of the business. Mr. Hunter is a graduate of Queen's University, with a Bachelor of Arts (Honours) in Political Studies.
Constantine Salamis - Proposed Director
Constantine Salamis (P.Eng) is a graduate mining engineer (McGill 1956) with over fifty years mining exploration experience in both Canada and overseas. Mr. Salamis has played a direct role in the discovery of four economic mineral deposits in Canada and West Africa (Burkina Faso). Mr. Salamis' early consulting experience in Abitibi was followed by three years as technical expert for the United Nations in Nicaragua and Kenya and subsequently on World Bank consulting assignments. Mr. Salamis was a founder of Manicouagan Minerals and Incanore Resources, a private exploration company in Burkina Faso and is currently a director of Pure Nickel a TSX listed company.
Upon completion of the transaction, the Company will be listed as a Tier 2 mining issuer on the Exchange.
Ian Foreman, P.Geo., the President and CEO of Yale and a qualified person under National Instrument 43-101 has reviewed and approved the technical information on the Property contained in this news release.
Samples mentioned in this news release were prepared and analyzed by IPL Inspectorate and ALS Chemex in their facilities in Mexico and Vancouver. Samples generally consisted of 1-3 kg of material. Gold and silver analyses were performed by 30 gram fire assay with an AA finish. Samples with greater than 1 g/t gold were re-assayed using gravimetric methods.
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and, if applicable, pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
As the transaction is not a Non-Arms Length Transaction, as defined by Exchange policies, shareholder approval is not required and the Qualifying Transaction is not subject to receipt of shareholder approval.
Investors are cautioned that, except as disclosed in the management information circular or 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.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
For further information, please contact:
Mammoth Capital Corp.
Telephone: (604) 687-3992
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.
You can view the Next News Releases item: Thu Nov 3, 2011, Mammoth Capital Corp. Announces Private Placement
You can view the Previous News Releases item: Thu May 12, 2011, Mammoth Capital Corp. Completes Initial Public Offering as a Capital Pool Company
You can return to the main News Releases page, or press the Back button on your browser.