Thurs. Sept 29, 2011 - News for 'EPL.V/EGPLF' - Eagle Plains Announces Proposed Spin-Out of Yellowjacket Gold
Project
Sep 29, 2011 (Filing Services Canada via COMTEX) -- Eagle Plains Announces
Proposed Spin-Out of Yellowjacket Gold Project
Cranbrook B.C., 29 September, 2011: The Board of Directors of Eagle Plains
Resources Ltd. (TSX-V:EPL)(the "Company" or "Eagle Plains") is pleased to
announce its plan (subject to court, shareholder and regulatory approval) to
transfer the Company's Yellowjacket Gold Project under a Plan of Arrangement
(the "Arrangement") in an effort to maximize shareholder value. The project as
described below will be transferred into a new company, incorporated under the
name Yellowjacket Resources Ltd. ("Yellowjacket"). Under the proposed
Arrangement, there will be approximately 33,000,000 common shares of
Yellowjacket outstanding.
Under the terms of the proposed Arrangement, Eagle Plains shareholders of record
on the effective date of the Arrangement will receive one share of Yellowjacket
for every three Eagle Plains shares held. Eagle Plains will hold approximately
15% of the total common shares of Yellowjacket, resulting in the transfer from
Eagle Plains to Yellowjacket of no less than $100,000 cash. Concurrently, Eagle
Plains will transfer to Yellowjacket its entire interest in the Yellowjacket
Project, an additional $500,000 cash and certain investments to provide working
capital and exploration funding. Yellowjacket will apply to have its shares
listed on the TSX Venture Exchange.
The reorganization is designed to improve the separate identification and
valuation of the Yellowjacket Project and specific Eagle Plains properties, to
enhance Eagle Plains' ability to divest specific properties through simpler
corporate ownership, and to enable Eagle Plains to separately finance and
develop its various assets, selectively reducing stock dilution. The process is
very similar to that which resulted in the creation of Copper Canyon Resources
Ltd., which was spun-out from Eagle Plains in 2006 and taken over by NovaGold
Canada Inc. in May, 2011 at a value of approximately $65,000,000.
The rationale for the formation of Yellowjacket is to advance the exploration
and development of the Yellowjacket project. The formation of Yellowjacket will
also allow Eagle Plains to continue to focus on its core business model of
acquiring and advancing grass-roots base and precious metal exploration
properties.
The proposed reorganization will be subject to shareholder approval by
resolution approved by not less than 66 2/3 % of votes cast. The Company expects
to present the matter to shareholders at a special meeting targeted for
mid-November, 2011. The Company anticipates that the reorganization and listing
of Yellowjacket will be completed shortly thereafter. The reorganization is also
subject to approval of the Court of Queen's Bench of Alberta and to acceptance
by the TSX Venture Exchange. Further particulars will be announced in due
course.
Yellowjacket Project Summary
The Yellowjacket Project is located 9 km east of Atlin, BC and is accessed by
all-season road. Hydro-electric power is located within 5km of property
boundaries. The project received a B.C. Mines Act permit in July, 2009 for an
open pit gold mine and onsite 400 tpd mill and concentrator, processing up to
75,000 tons per year. The permit contemplates a 7-9 year mine life from a series
of open pits entirely within an area of disturbed placer workings. Gold may be
recovered using a simple gravity concentrating recovery plant without the use of
chemicals or additives. Eagle Plains owns both mineral (hard-rock) and placer
rights within the Project area. In October 2009, Eagle Plains and Prize
announced the formal ratification of an Impact and Benefits Agreement with the
Taku River Tlingit First Nation.
About Eagle Plains Resources
Eagle Plains continues to conduct research, acquire and explore mineral projects
throughout western Canada. Since 1992, EPL has been acquiring and developing
early stage projects utilizing an in-house team of geologists, technicians and
specialists. Considered a prolific project generator with over 35 properties,
EPL invites joint venture participation to expedite development, reduce risk and
enhance exposure to discovery.
Current third party agreements if maintained to completion, expose EPL to over
$50M in exploration expenditures, $5.7M cash and 13M shares in partner
companies. Completed agreements have yielded over $17M in exploration spending,
$1M cash to EPL and a total of 16M shares of partner companies including Alexco
Resource Corp., NovaGold Resources Inc., Giyani Gold Corp., Aben Resources Ltd.
and others.
Expenditures during 2011 on Eagle Plains-related projects are expected to be
approximately $8,000,000, to be funded by Eagle Plains and third party partners.
This exploration work is expected to result in approximately 9400m diamond
drilling and extensive ground-based exploration work facilitating the
advancement of more than 15 projects at various stages of development.
Signed,
"Tim J. Termuende"
President and CEO
For further information on EPL, please contact Mike Labach at 1 866 HUNT ORE
(486 8673)
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