Brazil Gold Rescinds ACP Acquisition
Sep. 30, 2010 (Marketwire) --
BELLEVUE, WA -- (Marketwire) -- 09/30/10 -- Brazil Gold Corp ("Brazil Gold" or the "Company") (OTCBB: BRZG) announced today that it has entered into a Mutual Rescission Agreement and General Release rescinding its June 1, 2010 acquisition of Amazonia Capital E Participacoes Ltda, a Brazilian corporation ("ACP"). Under the terms of the Acquisition Agreement dated May 19, 2010 (the "Acquisition Agreement"), with Rusheen Handels, AG, a Swiss corporation ("Rusheen"), Brazil Gold acquired all of Rusheen's ownership units in ACP, which represented 99% of all the issued and outstanding share capital of ACP. In consideration for the units of ACP, Brazil Gold issued 44 million shares of its restricted common stock to Rusheen and its assigns. ACP is the registered owner of 102 mineral exploration claims covering approximately 824,411 hectares (2,037,119 acres) in three states in the Tapajos Greenstone Belt in the Amazon Basin of Brazil.
Pursuant to the Mutual Rescission Agreement and General Release executed by Brazil Gold and Rusheen, the parties agreed that all agreements constituting and comprising the acquisition of ACP entered into on May 19, 2010, as amended and consummated on June 1, 2010, were rescinded. The effective date of the rescission is June 1, 2010. As a result of such rescission, all of the 99% interest in the issued and outstanding share capital of ACP held by Brazil Gold was transferred back to Rusheen, and Rusheen now owns 99% of the issued and outstanding ownership units of ACP. Furthermore, the 44,000,000 shares of the Company's common stock that were issued in connection with the Acquisition Agreement will be returned to the Company. Finally, John Young resigned as the Company's head of exploration, effective immediately.
Between January 2010 and August 2010, Brazil Gold loaned to ACP approximately US$1.6 million to maintain the mineral exploration claims. In consideration for the loans, ACP issued Brazil Gold a series of Promissory Notes, the validity of which are not affected by the Rescission Agreement.
"The decision not to proceed with the exploration program was preceded by careful consideration and study," said Dr. Thomas Sawyer, Chairman of Brazil Gold. "However, the ultimate determining factor was Brazil Gold's inability to secure sufficient financing to continue carrying the over-bearing cost of the claims and instituting a comprehensive exploration program to realize their potential."
Management of Brazil Gold is currently evaluating resource opportunities in Brazil and other South American countries, including properties and projects which are financeable and have the potential to create near-term cash flow. Phillip Jennings, President of Brazil Gold, said, "Economic stress always provides economic opportunity for companies willing to look for it, and large companies often shed opportunities which have great promise but which they cannot exploit quickly. This has always been the case in the exploration industry, and Brazil Gold is currently looking to benefit from these opportunities. The Company remains committed to creating value for its shareholders."
FORWARD-LOOKING STATEMENTS
Statements in this news release that are not historical facts are forward-looking statements that are subject to risks and uncertainties. Words such as "expects," "intends," "plans," "may," "could," "should," "anticipates," "likely," "believes" and words of similar import also identify forward-looking statements. Forward-looking statements are based on current facts and analyses and other information that are based on forecasts of future results, estimates of amounts not yet determined and assumptions of management. The statements by our officers, and other statements regarding optimism related to the business, expanding exploration and development activities and other statements in this press release are forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995. Such statements are based on current expectations, estimates and projections about the Company's business. Actual results could vary materially from the description contained herein due to many risk factors that affect the industry the Company operates in and other risk factors listed from time to time in the Company's Securities and Exchange Commission (SEC) filings under "risk factors" and elsewhere. The forward-looking statements contained in this press release speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release.
For further information please contact:
Brazil Gold Corp
Phillip E. Jennings
President
Investor Relations
425-637-3080
Email Contact
www.brazilgold.com
Source: Marketwire (September 30, 2010 - 3:51 PM EDT)
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