VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jun 2, 2014) - UC Resources Ltd. (the "Company") (TSX VENTURE:UC) announces that it proposes to consolidate its common share capital on the basis of ten pre-consolidation common shares held for one new post-consolidation common share (10:1) (the "Proposed Consolidation"). The board of directors of the Company approved the Proposed Consolidation on April 11, 2014 and, in accordance with TSX-V policies and s. 9.1 of the Company's articles, shareholder approval will not be required.
Management believes the Proposed Consolidation will provide the Company with greater flexibility in its ability to finance the Company and advance its projects. The Company currently has an aggregate of 192,497,175 common shares issued and outstanding. It is anticipated that upon completion of the Proposed Consolidation, there will be approximately 19,249,718 common shares issued and outstanding.
The Company currently has 14,550,000 outstanding stock options which will be cancelled post consolidation.
The Company has no outstanding warrants.
The Proposed Consolidation is subject to TSX Venture Exchange approval. The effective date of the Proposed Consolidation will be disclosed in a subsequent news release.
In conjunction with the Proposed Consolidation, the Company has entered into a Letter of Intent to acquire Crown Gold Corporation's ("Crown") 100% interest in the mining claims that comprise the Red Lake Project ("Red Lake"). The Company has also entered into a letter of intent to acquire Frontline Gold's 100% undivided working interest in the Red Lake gold claims. The Company is currently negotiating on two additional properties of interest and expects further announcements shortly.
Proposed Terms of the Transaction - Crown - McKenzie Island Red Lake Property
To acquire Crowns undivided 100% working interest in the McKenzie Island Red Lake Property the Company proposes as follows:
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Upon execution of a Definitive Agreement and on the approval of the Toronto Stock Exchange (the "TSX-V"), UC shall issue to Crown 2,000,000 consolidated shares of UC and CDN$25,000.00 cash; and |
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UC shall pay to Crown on the anniversary date of the signing of the definitive agreement Year #1 - $25,000.00 Year #2 - $75,000.00 Year #3 - $80,000.00, Year #4 - $90,000.00, Year #5 - $100,000.00. Upon completion of these commitments Crown will assign the ownership of the property to UC Resources. |
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UC Resources will be responsible for property taxes as of the definitive signing. |
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UC Resources will have a 90 day period to conduct due diligence on the property prior to signing the definitive agreement. |
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UC Resources recognizes a 3% NSR royalty to Timore Resources with a buyback option of 1.5% for $1 million. |
Proposed Terms of the Transaction - McKenzie Island Red Lake Property
UC has the exclusive right to negotiate to acquire Frontline's 100% undivided working interest in the Red Lake gold claims (the "Properties").
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Upon execution of the LOI, UC shall issue to Frontline 100,000 shares of UC as a good faith non-refundable deposit and in consideration for which UC shall have exclusive negotiating rights in respect of the Properties. UC Resources will have 45 days to perform its due diligence. Should a definitive agreement be reached with UC the following principal terms of the LOI will apply: |
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Upon execution of definitive agreement and on the approval of the Toronto Stock Exchange (the "TSX-V"), within 45 days, UC shall issue to Frontline 600,000 shares of UC and CDN$15,000.00 cash; and |
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UC shall pay to the Frontline a royalty in an amount equal to one point five percent (1.5%) of the net smelter return ("NSR") derived from operations on Red Lake. Frontline will grant to UC the exclusive option (the "Buy-Out") to purchase 1 percent of the NSR for one million ($1,000,000) dollars. |
The proposed transaction is subject to a number of conditions, including but not limited to, applicable regulatory approval, and the execution of a definitive agreement. Frontline's Properties, located in the Red Lake Gold Camp, consists of 5 properties consisting of 13 claims totaling approximately 6,000 ha. The geological environment is comparable to many prolific projects, such as Goldcorp's Red Lake Mine.
After a decade of history in the Red Lake camp, we are pleased that UC Resources Director, Mr. John Archibald, P.Geo., has agreed to be the "Qualified Person" on our exploration programs in the Red Lake area. Mr. Archibald is a very well known and recognized Geologist in the Red Lake area. "It is good to be back in the Red Lake area," commented Archibald. "The area is known for its high potential in exploration and very high grade area for gold, it's good to be back in Elephant Country," he stated.
The Town of Red Lake, according to Wikipedia sources, experienced a sudden surge of economic, industrial, and population growth with the discovery of gold in 1926. By 1936, Red Lake's Howey Bay was the busiest airport in the world, with more flights landing and taking off per hour than any other. Since the mid-1960s The Red Lake District has yielded over 30-million ounces of gold worth over USD $20 billion at today's prices and is home to Goldcorp's Red Lake Mine, one of the richest and lowest cost producing mines in the world. The Red Lake Mine produces approximately 600,000 ounces worth USD $405 million annually, with over 11 million ounces (USD $7 billion) gold to date.
"UC Resources with our consolidation and proposed acquisitions, moving to definitive agreement and acceptance by the TSX Venture could result in UC controlling a considerable land package within one of Canada's most prolific gold areas in the country," stated Gary Monaghan, CEO of UC Resources. "Our recent efforts in Canada and our extended effort to move our XORA claims into hard rock mining at the Mexican LA Yesca facility remain intact," he continued.
Company Chief Operating Officer Jim Voisin commented, "The La Yesca mill remains on care and maintenance as we tighten up the hard rock parameters to ensure the resulting hard rock effort will be profitable. We are also working closely with our friends at FIFOMI in requesting their financial support once again to bring both our mill profitability as well as the support of our Mexican Community to fruition. The possibility of Joint Venture or use of contract miners to fast pace the hard rock throughput is also being investigated. I would like to thank FIFOMI, SEMERNAT and SGM for their assistance in moving this project forward," he stated.
UC Resources Ltd. is a junior resources exploration company with a focus on silver and gold exploration and production in Canada and Mexico.
On behalf of the Board of Directors,
Gary Monaghan, Chief Executive Officer
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Investors or interested parties are invited to visit the UC Resources website at www.ucresources.net - where they can choose to join the opt-in e-mail list to receive all future press releases and updates in real time.
Forward-Looking Information:
This press release may include forward-looking information within the meaning of Canadian securities legislation. The forward-looking information is based on certain key expectations and assumptions made by the management of UC Resources Ltd. Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Company cannot provide any assurance that it will prove to be correct. These forward-looking statements are made as of the date of this press release and the company disclaims any intent or obligation to update publicly any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.