TORONTO, Feb. 12 /CNW/ - Eurasia Gold Inc. ("Eurasia" or, the "Company") (TSX: EGX) is announcing that it has entered into a share purchase agreement (the "Share Purchase Agreement") principally with companies controlled by Mr. Kumar Mukashev, a director of Eurasia, to acquire entities which hold or will acquire 100% of the rights to the Bozymchak Gold-Silver-Copper Project in Kyrgyzstan and to the Akjilga Silver Project in Tajikistan (the "Acquisition"). The Share Purchase Agreement provides for a purchase price of US$167,806,739 which will be paid by issuing 169,249,163 shares of Eurasia. Subject to conditions precedent including the completion of an offering of new shares, closing of the Acquisition is expected in early March, 2007.
Acquisition of the Bozymchak and Akjilga Projects
The Acquisition is a "related party transaction" within the meaning of OSC Rule 61-501 ("Rule 61-501") and, as such, requires the preparation of an independent formal valuation. As well, the Acquisition must be approved by a majority of votes cast at a meeting of Eurasia's shareholders present in person or by proxy, excluding votes cast by those Eurasia shareholders required to be excluded pursuant to the minority approval provisions of Rule 61-501. The 83,999,155 shares beneficially owned or controlled by Mr. Mukashev, directly or indirectly, will be excluded for this purpose.
The Board of Directors has established a special committee of independent directors consisting of Graham Bevan, Neil Steenberg, and Patrick Evans (the "Special Committee"), to supervise the negotiation of the Share Purchase Agreement. The Special Committee engaged Haywood Securities Inc. ("Haywood") to prepare a formal valuation of the shares of the entities to be acquired in accordance with Rule 61-501 (the "Formal Valuation"). The purchase price is within the range of fair values established by Haywood in the Formal Valuation. The Special Committee considered, based upon discussions with Haywood, to recommend the Acquisition to the Board of Directors. The Board of Directors has approved the Share Purchase Agreement and Acquisition and unanimously recommends that Eurasia shareholders vote in favour.
A special meeting of shareholders has been called for March 13th, 2007 (the "Meeting") to consider the Acquisition. The Meeting will be held at the Ridout Room, Toronto Board of Trade, 1 First Canadian Place, Toronto, Ontario, Canada, M5X 1C1, on the 13th day of March, 2007 at the hour of ten o'clock in the morning (Toronto time). Notice of the meeting and accompanying management information circular are expected to be mailed to shareholders on or about February 13, 2007.
Ansley Financial Holdings Ltd. ("Ansley"), has entered into a voting agreement with Eurasia, whereby Ansley has agreed to vote the shares of Eurasia that it beneficially owns in favour of the Acquisition, as well as the Continuance (as defined below). Ansley beneficially owns or has control or direction over 38,129,418 shares of Eurasia, representing 24.9% of the current issued and outstanding shares of Eurasia.
The Bozymchak Project
The Bozymchak deposit of gold, copper and silver is located in the Alabuka region Jalalabad district, Kyrgyzstan. The deposit area occupies a part of the 1,600 hectare license area close to the Uzbek border. The deposit can be accessed by 16km of gravel and 24km of tarred roads from the Uzbek border. Heavy transport can reach the site on a year round basis.
The Bozymchak deposit was first investigated in 1951 by the Gava-Sumsar geological field party (Uzbek Geological Administration). The deposit was explored by a number of organizations from the 1950's to the late 1990's. The gold, copper and silver resources were not registered in Kyrgyzstan's balance until 2000, when a further estimate of the opencast 'resources' of the central section and a preliminary technical and economic assessment were made.
A licence for geological exploration was issued on February 3, 2005 and is valid until December 31, 2008. As well, a licence to develop the central part of the Bozymchak deposit was also issued and which is valid until September 5, 2008. Eurasia will indirectly acquire these rights as a result of the Acquisition.
As at December 2006, the Bozymchak Project had a measured mineral resource of 2,782Kt grading 1.55g/t Au, 0.85% Cu and 9.80g/t Ag for total measured resources of 4,308 Kg Au, 23 Kt Cu and 27 t Ag. Indicated mineral resources were 10,938Kt grading 1.49 g/t Au, 0.80% Cu and 9.45 g/t Ag for total indicated resources of 16,244 Kg Au, 87 Kt Cu, and 103 t Ag. There was an additional 7,909 Kt of resources in the inferred category grading 1.31 g/t Au, 0.73% Cu, and 8.72 g/t Ag for total inferred resources of 10,396 Kg Au, 57 Kt Cu, and 69 t Ag. All mineral resource and reserve estimates presented in this press release have been prepared in accordance with the JORC Code, which is equivalent to CIM standards.
The Bozymchak Project is the subject of a technical report entitled Technical Report on the Bozymchak Project, Western Kyrgyzstan (the "Technical Report") dated January 2007, prepared by Wardell Armstrong International ("WAI"), an independent mining consulting company, which will be filed with Canadian Securities Administrators (CSA) on the System for Electronic Document Analysis and Retrieval (SEDAR). The information set out in this press release relating to the Bozymchak Project is derived from the Technical Report.
The Akjilga Project
The Akjilga silver deposit is located in the Pamir Mountains within the Maunting Badakshan region, Tajikistan. The Akjilga licence agreement incorporates two separate areas, totalling 8400 hectares. The Akjilga property could be made accessible all year round, although additional operating costs will be incurred as a result of the high elevation and remoteness of the site. The region has been under systematic geological study since 1934. The majority of the exploration work at Akjilga was undertaken during the Soviet period and therefore much of the usual detailed sampling information and quality control data are not readily available or verifiable. The Soviet era prospecting was completed in 1992. All available data of the 1992 exploration report (in Russian) which contains all geological details, assays results and cross sections and plans showing the geological interpretation have been prepared according to Soviet standards and do not comply with reporting standards of Canadian securities laws and, as such, are not disclosed in this press release.
Eurasia has commissioned Wardell Armstrong International Limited ("WAI") to undertake a re-classification of the sulphides deposit at its existing Mizek property to meet JORC standards and to produce a revised NI 43-101 technical report for the Mizek project. In 2004 Steffen, Robertson and Kirsten (Canada) Inc. ("SRK") completed a re-classification of the Mizek sulphide deposit to meet CIM standards based on a comparison between Russian-classified "Reserves" and NI 43-101, using a gold equivalent cut-off grade of 3g/t (based on both gold and copper mineralisation). The WAI JORC reclassification updates this work, based on a gold cut-off grade of 0.5g/t and a full remodelling of the Mizek suphides geological database, including new geostatistical interpretations from the resultant model and the transition between oxide and sulphide zones.
Based on the WAI reclassification, the Mizek sulphides deposit had a JORC measured mineral resource of 37Kt grading 1.59g/t for total measured resources of 59Kg, plus an indicated mineral resource of 6,452Kt grading 1.70 g/t Au for total indicated resources of 10,963Kg Au. In addition, the Mizek sulphides had 27,752Kt of resources in the inferred category grading 1.77 g/t Au for total inferred resources of 49,234 Kg Au. The Mizek oxides deposit had a JORC measured mineral resource of 5Kt grading 1.80g/t Au for total measured resources of 10Kg Au, an indicated mineral resources of 606Kt grading 1.89 g/t Au for total indicated resources of 1,145Kg Au and an inferred mineral resource of 1,012Kt grading 1.53 g/t Au for total inferred resources of 1,548 Kg Au. A revised NI 43-101 technical report for Mizek will be filed within the prescribed period.