Matachewan Consolidated Mines, Limited Announces Signing of Letter of Intent With Batavia Energy Corp. on Timmins Gold Property
10/25/2010 4:06:05 PM - Market Wire
TORONTO, ONTARIO, Oct 25, 2010 (MARKETWIRE via COMTEX News Network) --
Matachewan Consolidated Mines, Limited ("MCM")(TSX VENTURE: MCM.A) is pleased to announce the signing of a binding Letter of Intent whereby Batavia can earn up to a 70% interest in eight mining claims owned 100% by MCM located in Hislop and Guibord townships, Ontario. The parties agreed to enter into a definitive agreement based on standard industry terms as soon as practicable, including a joint venture post 70% earn in by Batavia.
The property is 5 kilometers southeast of the producing Black Fox Mine, 2 kilometers northeast of the producing Hislop mine, and 4 kilometers due north of the former producing Ross mine. Gold mineralization was delineated on the property by Noranda during the 1980's and Royal Oak Mines Inc. initiated production from a small open pit mine in the early 1990's, shipping approximately 100,000 tons grading 0.1 oz/ton for milling (Source: Resident Geologist) when the gold price averaged $366 per oz.
Batavia and MCM plan to explore and establish gold in the mineralized zones along strike and to depth from the previous mining operation.
Key Terms
The key terms for the Batavia 70% earn in are:
-- 50% over three years after $60,000 cash payments,
$450,000 in exploration expenditures,
and 500,000 Batavia shares;
-- 10% for completing a definitive feasibility study
or $1 million in additional exploration expenditures
over 2 years;
and
-- 10% for obtaining mine financing or $2 million
in additional exploration
expenditures over 3 years.
MCM retains, in addition to its 30% interest, the following:
-- 2% NSR, 1% of which can be repurchased for $1 million;
and
-- $25,000 annual advance royalty post Batavia's 50% earn.
Joint Venture Operating Profits
A joint venture will be established once Batavia has earned
a 70% interest.
The joint venture operating profits will be divided based on
participation in mine financing.
Should Batavia provide 100% of mine financing,
Batavia will receive 90% of joint venture
operating profits until recovery of 200% of expenditures,
and thereafter operating profits are divided 70/30 in
favour of Batavia.
Should MCM exercise a 20% mine financing option,
the joint venture operating profits will be divided
70/30 in favour of Batavia from the establishment
of the joint venture.
Batavia President John Kontak said:
"Batavia is excited to have the opportunity to earn in to
the world class Timmins gold mining camp.
MCM and Richard McCloskey provide a great partner and we
look forward to getting busy in the field."
MCM President Richard McCloskey said:
"We are pleased to have this property reactivated and
look forward to a long and successful relationship
with Batavia."
Ken Guy is the Qualified Person for the purposes of NI 43 101.
Matachewan is a Canadian publicly-traded Junior resource company
that has a significant royalty interest in a portion of
the Northgate Minerals Corporation developing Yonge-Davidson
gold mine located in the Matachewan, Ontario area, an indirect
royalty interest in developing Saskatchewan potash operations,
and oil and gas investments in Western Canada.
Matachewan's common shares are traded on the TSX Venture
Exchange under the trading symbol MCM.A
Certain statements contained in this press release constitute "forward looking statements". These statements are based on current expectations of management, however are subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from the forward-looking statements in this news release. Readers are cautioned not to place undue reliance on these statements. The Company does not undertake any obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise after the date hereof, except as required by securities laws.
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE
AI
