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Galena Capital Corp.
Suite 1101, 808 West Hastings
Street
Vancouver, British Columbia,
Canada
Telephone: (604) 638-0260
Toll
Free: (877) 906-3987 |
N E W
S R E L E A S E
Galena to acquire
the Norma Mining Group with six projects in Mexico &
Peru
Vancouver, B.C., January 15,
2008 – Galena Capital Corp. (TSXV:
FYI) (“Galena” or the “Company”),
a Vancouver based company listed on the TSX Venture Exchange (the
"Exchange"), is pleased to announce that it has entered into a Letter
Agreement effective January 15, 2008 with Norma Mines Limited
(“Norma Canada”) under which the Company has agreed to
acquire Norma Canada (the "Acquisition"). The
Acquisition is an arm’s length transaction within the meaning of
the Exchange’s policies.
Norma Canada owns interests in two prospective
mineral exploration properties in
Mexico and four prospective
mineral exploration properties in
Peru (the
“Properties”) through its wholly-owned Mexican and Peruvian
subsidiaries. Norma Canada and its subsidiaries are known as the Norma
Mining Group. The Norma Mining Group is actively pursuing additional
projects from its extensive list of prospects, six of which it
anticipates being worthy of additional
consideration.
The Norma Mining Group currently employs more
than a dozen exploration geologists and mining engineers, headed by
Norma Canada’s President Danson Tolman, who collectively have
extensive knowledge of mineral exploration and mining operations in
Latin America and
South America and a
deep network of contacts from which to access additional
properties.
By acquiring the Norma Mining Group,
Galena will
accelerate its ability to aggressively pursue and aggregate highly
prospective gold, silver and other metal projects in
Latin America and
South America.
Arni Johannson, CEO & Chairman of
Galena
commented: “The acquisition of the Norma Mining Group involves
both the acquisition of outstanding properties and an enhanced level of
expertise that will enable Galena to be well on its way
to executing its three step business plan introduced to investors when
its Qualifying Transaction closed in November
2007.”
Proposed
Acquisition
Under the terms of the Letter Agreement, the
Company will acquire all of the issued securities of Norma Canada from
its shareholders in exchange for 4,200,000 common shares in the capital
of the Company.
Certain of these common shares will be subject
to escrow in accordance with the TSX Venture Exchange’s
policies.
Proposed Private
Placement
Concurrent with the completion of the Acquisition, the Company
proposes to complete a brokered private placement consisting of
1,500,000 units of the Company at a price of C$2.00 per unit, for gross
proceeds of up to C$3,000,000. Each unit will consist of one common
share and one-half of one transferable common share purchase warrant,
with each whole warrant entitling the holder to purchase an additional
common share in the capital of the Company for a price of $2.50 for a
period of two years from the closing of the private placement.
The Company may pay finder’s fees in connection with the
private placement within the limits set by the Exchange.
Canaccord Capital Corporation has agreed to act as the
Company’s agent for the purpose of completing the private
placement and will be paid a cash fee of 7% of the gross proceeds of the
financing, agent’s warrants to purchase up to that number of
common shares in the capital of the Company that equals 7% of the number
of units issued under the private placement at a price of $2.50 per
common share for a period of two years from the closing of the private
placement, a corporate finance fee of 15,000 units (having the same
terms as those issued to the purchasers) and $10,000 in cash as an
administration fee.
The net proceeds of the private placement will be used to fund
the costs associated with completing the Acquisition and land
maintenance obligations relating to the Properties, exploratory work
programs on selected properties owned by Norma Canada as detailed below,
and for general working capital purposes in operating the Norma Mining
Group.
Description of the
Properties
Norma Canada’s two subsidiaries own, or
hold options to purchase, various interests in six prospective mineral
exploration and development projects in
Mexico and
Peru. The Properties
cover an area in excess 30,620 acres.
Galena intends to direct its initial attention
to exploration work on the Maria project in Mexico and the Patricia
project in Peru, where the Company proposes to expend approximately
$500,000 per project over the next 12 months in preliminary exploration
work with a view to completing a technical report in accordance with
National Instrument 43-101 on those projects that show merit as a
precursor for more advanced developmental work.
Maria Project,
Mexico
Pursuant to an option agreement dated October
19, 2007, Norma Mines SA de CV has the option for a period of one year
to acquire 100% of the legal and beneficial interest in the San Juan
Nepomuceno project for a cash payment of US$3,000,000.
This project is located north of
Mexico City and
comprises an area of approximately 550 hectares. It hosts numerous free
gold and silver structures running over an area 8 km long by 6 km wide.
Preliminary sampling undertaken by the Norma Mining Group in 2007
included sample sets with up to 500g per tonne silver.
Patricia,
Peru
Pursuant to a mineral exploitation agreement
dated December 18, 2007, Norma Mines Peru S.A. has the right to acquire
100% of the legal and beneficial ownership in the Patricia properties in
consideration for paying a total of US$2,225,000, completing a mineral
exploration and exploitation program, paying all maintenance costs on
the concessions and granting the vendor a 2% Net Smelter Return royalty
over production from the concessions.
The Patricia project is located in Ancash, in
north central Peru, and consists of 10
mineral exploration and exploitation concessions totalling approximately
3,900 hectares that have numerous areas of disseminated gold
mineralization in anomalous intrusive and shale structures. More than 10
mantos have been identified to date in the project area and preliminary
work by the Norma Mining Group has identified six anomalous areas
returning samples with over 5g per tonne gold.
The sample results discussed in this news
release do not conform to the standards of National Instrument 43-101
and should not be relied upon by the
reader.
Conditions
Precedent
The parties’ obligations to complete the
Acquisition are subject to the satisfaction of the usual conditions
precedent including:
(a) all necessary
approvals of the Exchange and all other regulatory authorities and third
parties to the Acquisition and the private placement being
obtained;
(b) no adverse material
change shall have occurred in the business, affairs, financial condition
assets or operations of the Company, Norma Canada or its subsidiaries or
the Properties prior to completion of the
Acquisition;
(c) the completion of
the brokered private placement on the terms set forth above;
and
(d) both parties being
satisfied with the results of its due diligence review in connection
with the Acquisition.
Completion of this transaction is subject to
Exchange acceptance. The transaction cannot close until the required
Exchange approval is obtained. There can be no assurance that the
transaction will be completed as proposed or at all.
Investors are cautioned that any information
released or received with respect to the transaction may not be accurate
or complete and should not be relied upon.
The TSX Venture Exchange has in no way passed
upon the merits of the proposed transaction and has neither approved nor
disapproved the contents of this press release.
ON BEHALF OF GALENA CAPITAL
CORP.
"Arni
Johannson"
ARNI
JOHNANNSON
CHAIRMAN AND
CEO
THE TSX VENTURE EXCHANGE DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS
RELEASE.
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For further information contact:
Ian
Pedersen (Investor
Relations)
Suite
1101, 808 West
Hastings Street, Vancouver,
British
Columbia, V6C
2X4,
Canada
Tel: (604) 638 - 0260 Toll
Free: (877) 906 -
3987 |
 
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