Medallion Resources Ltd fka MDL

[sumisu]

234 Million Tonne Historical Resource(x) Iron-Titanium Property Optioned by Medallion

Tuesday September 2, 9:00 am ET

http://biz.yahoo.com/cnw/080902/medallion_res_romaine.html?.v=1

TSX-V: MDL
VANCOUVER, Sept. 2 /CNW/ - Medallion Resources Ltd (TSX.V: MDL) announced today that it has optioned from privately held Romaine River Titanium Inc., the right to acquire a 100% legal and beneficial interest ("Option") in the Everett iron-titanium property ("Property"). The Property consists of 59 claims, located three kilometres east of the Rio Tinto-owned Lac Allard iron-titanium mine in Duplessis County, Quebec. The Everett Property is potentially one of the world's largest iron-titanium occurrences with a historical 234-million-tonne estimated resource(x).

President William Bird reports, "The Everett Property, represents an exceptional opportunity for Medallion shareholders and it's rare that a project of this magnitude is available to any company."

About the Everett Iron-Titanium Property

Historical drilling and metallurgical work support the Everett Property's historical resource estimate of 234 million tonnes grading 10.8% titanium oxide (TiO(2)) and 17.9% iron.(x) The body of iron-titanium mineralization outcrops along a known length of 2.3 kilometres and a width that ranges from 180 metres to 485 metres. It is open along strike and down dip.

The Everett Property minerals are hematite (Fe(2)O(3)) and ilmenite (FeTiO(3)), which also are the minerals mined at the QIT Lac Allard mine. The QIT mine, owned by Rio Tinto and presently the largest of its type, is a leading producer of high-quality titanium and steel products.

(x) The historical resource estimate and the Everett Property reports supporting the estimate were prepared before the introduction of National Instrument 43-101- Standards of Disclosure for Mineral Projects ("NI 43-101"). They may not be relied upon until they are confirmed using methods and standards that comply with those required by NI 43-101. The potential for the Everett Property mineralization to replicate the historical resource estimate, or for new data to expand its tonnage and grade, is conceptual and is based on historical reports, which cite approximate lengths, widths, depths, grades, metallurgical test work and projections of the historical resource. Investors are cautioned that a qualified person has not yet completed sufficient exploration, test work or examination of past work to define a resource that is currently compliant with NI 43-101. The Company further cautions that there is a risk that exploration and test work will not result in the delineation of such a currently compliant resource. Neither the Company nor its personnel treat the historical resource estimate or the historical data as defining a current mineral resource, as defined under NI 43-101, nor do they rely upon the estimate or the data for evaluation purposes; however, these data are considered relevant and will be used to guide exploration as the Company develops new data to support a current mineral-resource estimates in accordance with the requirements of NI 43-101.

Terms of Option Acquisition

In consideration of the grant of the Option, the Company has agreed, among other things, to pay to RRT $50,000 and issue 100,000 common shares to RRT (the "Initial Payments") on or before 120 days following the date of the LOI. The parties have agreed to prepare and execute a definitive option agreement, which will replace the LOI. The LOI and the Option are subject to due diligence, the acceptance of the TSX Venture Exchange and the approval of the shareholders of RRT.

On or before 31 December 2012, in order to maintain the right to exercise the Option and acquire a 100% interest in the Everett Property, Medallion is required to pay to RRT in installments an aggregate of $450,000, issue to RRT an aggregate of 800,000 Medallion Shares and incur an aggregate of $6,000,000 in optional expenditures on the Everett Property (collectively, the "Option Payments"). These expenditures include an obligation that Medallion incurs an aggregate of $750,000 in expenditures on the Property on or before 31 December 2009 and produce a technical report in accordance with National Instrument 43-101 to confirm measured and/or indicated mineral resources on the Property. The LOI permits Medallion to extend the term of the Option to 31 August 2013, in the event that Medallion defers a portion of the required expenditures due by 31 December 2012 and agrees to expend the deferred shortfall, plus a premium, by 31 August 2013. In the event that Medallion wants to exercise the Option at an earlier date, Medallion has the right to complete the Option Payments at any time prior to the required dates set out in the LOI. The Everett Property is not subject to any royalties.

On completion of the above mentioned Initial Payments and Option Payments and provided that Medallion has not less than $4,000,000 in working capital in hand and no long-term unconvertible debt, Medallion will have the right to exercise the Option and acquire the Everett Property by paying to RRT an additional $1 million and by issuing to RRT that number of Medallion Shares so that RRT will then hold, inclusive of all shares previously issued to RRT, an aggregate of 50% of the then issued and outstanding Medallion Shares. Medallion will grant to RRT the right to acquire, for no additional consideration, a proportion of the number of Medallion Shares which are subsequently issued upon exercise of any warrants of Medallion outstanding at the date of the exercise of the Option based on the extent to which such warrants are in the money when exercised. Medallion will also grant the right to acquire, for no additional consideration, such number of Medallion Shares as is equal to the number of any Medallion Shares that are subsequently issued upon conversion of any special warrants, subscription receipts and convertible debt instruments of Medallion (excluding stock options), which are outstanding at the date of the exercise of the Option.

Prior to the exercise of the Option, Medallion has also granted to RRT the right to acquire up to 10% of the securities issued in any equity financing of Medallion on the terms and conditions applicable to other investors in such financing.

Medallion has also agreed upon execution of the definitive agreement to appoint one nominee of RRT to the board of directors of Medallion, and upon exercise of the Option to appoint nominees of RRT to comprise 50% of the members of the board of directors of Medallion, subject to regulatory approval.


ON BEHALF OF THE BOARD OF DIRECTORS

"William H Bird", PhD, PGeo, President & CEO


William H. Bird, PhD, PGeo, serves the Board of Directors of the Company as an internal, technically Qualified Person. Technical information in this news release has been reviewed by Dr Bird and prepared in accordance with Canadian regulatory requirements as set out in National Instrument 43-101. Company Management, which takes full responsibility for content, prepared this news release. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. Some of the statements contained in this release are forward-looking statements, such as estimates and statements that describe the Company's future exploration and financing plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in these statements. Such risks include expectations that may be raised by discussing potential mine types and by comparing the Company's projects to other projects. Also, in order to proceed with the Company's exploration and acquisition plans, additional funding is necessary and, depending on market conditions, this funding may not be forthcoming on a schedule or on terms that facilitate the Company's plans.

For further information

check the website HTTP://www.medallionresources.com or contact: William H Bird, [phone], [e-mail]
David Fry, [phone], [e-mail]
Wayne Marsden, [phone], [e-mail]

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Source: Medallion Resources Ltd.