VANCOUVER, May 8, 2012 /PRNewswire/ - Emerick Resources Corp. (TSXV: ERC) (" Emerick" or the " Company") is pleased to announce that it has entered into a non-binding letter agreement dated April 26, 2012 to acquire all of the outstanding shares of Medgold Resource Ltd. (" Medgold") (the " Transaction"), a private company incorporated in England and Wales focused on the exploration and development of precious and base metals in Western Europe.
The Proposed Transaction
To acquire Medgold, the Company will issue 32,287,500 shares in its capital stock to Medgold's shareholders in proportion to their respective shareholdings in Medgold. Emerick's resulting issued capital will be 52,416,078 shares, of which Medgold's shareholders will own 61.6%. All outstanding options in Emerick and Medgold will be cancelled. The Company's current working capital position of approximately $500,000 will increase to $1.3 million.
Ralph Rushton will remain as Director and President of Emerick and Simon Ridgway as Chairman of the Board. Upon completion of the Transaction, Dan James will be appointed as Director and CEO of Emerick and will be joined on the Board by David Hall and Jeremy Martin, all of whom are directors of Medgold. Medgold has the right to appoint one additional representative to the Board after completion of the Transaction.Based on the terms of the Transaction, Emerick will apply to the Exchange to have its listing graduated from the NEX board to Tier 2 of the TSX Venture Exchange (the " Exchange") as a resource issuer. Upon completion of the Transaction, the Company will be known as "Medgold Resources Corp.". Medgold is at arm's length to the Company, and none of the directors or officers of the Company are directors, officers or shareholders of Medgold. The Transaction will be completed by way of a legally binding sale and purchase agreement (" SPA") which will be entered into between Emerick and each of Medgold's shareholders. The completion of the transaction will be subject to a number of conditions, including, inter alia, entering into the SPA, approval of both Medgold's and Emerick's respective boards, approval of the Transaction by Emerick's shareholders, completion of a 43-101 compliant technical report on one of Medgold's assets and approval of the Transaction by the Exchange. The Properties Medgold has licences granted and under application in Italy, Spain and Portugal, targeting gold and base metal projects. These countries are favourable jurisdictions, with robust mining codes, backed by administrations who are actively seeking both foreign investment and commodity exploration companies. Upon completion of the Transaction, it is expected that the Pietratonda project, described below, will be the Company's material property for the purposes of NI 43-101. Italian Projects: Pietratonda and Frassine Medgold is the owner of two gold exploration licences in Italy, each 8 square kilometers in area, called Pietratonda and Frassine, covering gold mineralization hosted within silicified limestones known as jasperoids. Their occurrence is controlled by steeply-dipping normal faults and low-angle thrust faults and their intersection with limestone-flysche contacts. At Pietratonda gold mineralization is hosted in the limestone unit called Calcare Cavernoso and crops out in small exposures located in dense woodland. Gold-bearing jasperoids, which are typically low- to medium-grade, are extensive over a strike length of 1.1 km and widths of up to 200 m. Mineralization is typically associated with a unconformable thrust contact with underlying basement rocks with much of the contact covered by Pleistocene silica sands - which have previously been exploited by quarrying methods. Gold grades from historical rock-chip exploration programs yielded results of 0.81, 0.71 and 0.62 g/t Au. High-angle normal faults, which have been reported by previous authors, are the key exploration targets as these are commonly high-grade and are typically feeder structures to the jasperoids.
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