Win-Eldrich Gold Inc. ("WEG"), a
wholly owned subsidiary of Win-Eldrich Mines
Limited ("WEX") (TSXV:WEX.V),
and American Mining Corporation ("AMC"), a Nevada corporation, are
pleased to announce they have entered into a Letter of Intent
("LOI") in which the two companies agreed to create a new Limited
Liability Company ("LLC") for the purposes of expanding the
existing 100 ton per day mill to a 200 ton per day mill. The expanded
facility will provide the ability to process the historic gold resource at
Ashdown identified in several historical reports and will operate as a
regional custom milling facility. The Ashdown historical gold resource
has not been verified as a current resource, a feasibility study has not been
completed and there is no certainty that the proposed operation will be
economically viable.
The terms of the LOI are as follows:
- Each
company will own 50% of the new LLC.
-
- AMC
will make a $500,000 initial payment to WEG.
-
- AMC
will make a $1,500,000 payment to WEG upon execution of the definitive
agreement (90 days).
-
- AMC
will contribute a 100 ton per day gold circuit to the LLC to double
production at Ashdown.
-
- WEG
will contribute the permitted and operating Ashdown flotation mill to
the LLC.
-
- The
two companies will share costs and net profit from the sale of recovered
gold and other metals based on their ownership interest in the LLC.
-
The LLC will be responsible for the costs of completing the
permitting, installation and commissioning of the modified and expanded
mill. When completed, the capacity of the Ashdown Mill facility will be
200 tons per day.
Perry Muller, CEO of Win-Eldrich, comments that "sustained high gold prices
have encouraged WEX to pursue development of the historic gold resource at
Ashdown in addition to continuation of profitable molybdenum sulfide
concentrate production. The LOI with AMC also allows WEX to satisfy its
commitments to creditors and to expand operations for the benefit of our
shareholders. We are looking forward to working with AMC."
Gary MacDonald, CEO of American Mining states that "we look
forward to working with Win-Eldrich as through our
assessment of the Ashdown facility, we have seen an experienced team that is
dedicated to minimizing operating costs and increasing metal
production. This opportunity furthers AMC's business model of acquiring
and operating regional custom-milling centers in Nevada. Our custom
mills focus on processing gold ores that enhance mill profitability for the
benefit of our clients and stakeholders."
Versatech
Capital For Mining (www.versatechcapitalformining.com),
a boutique mine financing firm, has been an advisor and source of funding for
this LOI. Versatech's contact is George Petker at (775) 830-3401.
This news release includes certain forward-looking information and
forward-looking statements (collectively "forward looking
statements") concerning the future performance of our business, its
operations and its financial performance and condition, as well as
management's objectives, strategies, beliefs and intentions.
Forward-looking statements are frequently identified by such words as
"may", "will", "plan", "expect",
"anticipate", "estimate", "intend" and similar
words referring to future events and results, including in respect of the
increase in production levels at the Ashdown mine. Forward-looking
statements are based on the current opinions and expectations of
management. All forward-looking statements are inherently uncertain and
subject to a variety of risks and uncertainties, including the speculative
nature of mineral exploration and development generally and specifically in
respect of the interpretation of the geology, continuity, grade and size of
mineral deposits, unanticipated operational or technical difficulties,
fluctuating commodity prices, competitive risks and the availability of
financing, changes in laws or regulations, changes in the financial markets
and changes in general economic conditions, as described in more detail in
our recent securities filings available at www.sedar.com.
Such forward-looking statements are based on a number of assumptions,
including but not limited to the level and volatility of the price of
molybdenum, the availability of financing, the accuracy of reserve and
resource estimates and the assumptions on which those estimates are based and
the ability to achieve and maintain certain operational efficiencies. Should
one or more risks and uncertainties materialize or should any assumptions
prove incorrect, then actual events or results may differ materially from
those expressed or implied in the forward looking-statements and we caution
against placing undue reliance thereon. We assume no obligation to revise or
update these forward-looking statements, except as required by applicable
law.
NEITHER THE TSXV 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.