Zeev's Turnips Patch-No Politics (ZEEV)

[basserdan]

Hi mlsoft,

Glamis Gold Enters Agreement To Sell Cerro San Pedro Project
Wednesday February 5, 9:03 am ET

RENO, Nev.--(BUSINESS WIRE)--Feb. 5, 2003--Glamis Gold Ltd. (NYSE:GLG - News; TSX:GLG - News) announced today that it has entered into an agreement with Metallica Resources Inc. for the sale of Glamis' 50% interest in the Cerro San Pedro project in Mexico. Metallica is the owner of the other 50% interest in the project.
The key terms of the agreement are as follows (all amounts in US$):

The purchase price is $18 million, with $2 million paid on closing; $5 million paid within six months from closing or sooner upon the occurrence of certain events; $6 million within 12 months from closing, payable in cash or, at the election of Metallica and subject to certain conditions, in registered and freely tradable common shares of Metallica; $2.5 million upon the commencement of commercial production at Cerro San Pedro; and $2.5 million 12 months following the commencement of commercial production.
Glamis will also be granted a Net Return royalty on all mineral production from Cerro San Pedro, according to the following schedule:

Gold Price per ounce Net Returns Percentage
$325.00 - $349.99 0.5%
$350.00 - $374.99 1.0%
$375.00 - $399.99 1.5%
$400.00 or above 2.0%

In the event that Metallica fails to make the $5 million payment due within six months of closing, Glamis will retain the initial $2 million payment. Metallica will also return the 50% interest in the Cerro San Pedro Project along with an additional 1%, and the parties will enter a new joint operating agreement with Glamis as the majority owner and operator.
Closing of the agreement is scheduled for February 12, 2003, subject to the satisfactory completion of due diligence by Metallica and the approval of the transaction by the Board of Directors of both Glamis and Metallica.
Kevin McArthur, President and CEO of Glamis said, "We are pleased to finally consolidate the ownership of the Cerro San Pedro Project and believe this is a 'win-win' transaction for both parties. Given the size of our share of the project and its priority relative to Glamis' other development projects, Cerro San Pedro does not fit well in our intermediate-term planning and this agreement will allow us to focus our human and financial resources on the exciting El Sauzal and Marlin development projects. The transaction will also provide Glamis an excellent return on its investment at Cerro San Pedro. At the same time, Cerro San Pedro is a quality project that should be developed, and we wish Metallica the best in its endeavors."

Glamis Gold Ltd. is a premier intermediate gold producer with low-cost gold mines in Nevada, California and Honduras. The Company remains debt free and unhedged. Glamis' strategic goal is to increase annual gold production to 500,000 ounces at a total cash cost below $150 per ounce.

http://biz.yahoo.com/bw/030205/52082_1.html

Regards,
Dan