RENO, Nev., Jan. 31, 2013 /PRNewswire/ -- General Metals Corporation (OTCQB: GNMT) ( www.nevada-goldmine.com) announced today that it has entered into a Letter of Intent with Open Gold Corp, a Canadian junior mining company listed on the TSX Venture Exchange, to raise capital and provide better access for future capital needs. Per the terms of the Letter of Intent, $2.350 million will be raised to advance the development work on the General Metals Independence gold and silver mining project located near Battle Mountain, Nevada, initiate exploration of Open Gold's Mitchell Project and provide working capital. The transaction is subject to completion of due diligence by both General Metals and Open Gold and the execution of a definitive agreement between the two companies. Under the terms of the proposed transaction, Open Gold will issue shares of its common stock to General Metals so that General Metals and its shareholders will own 64% of Open Gold's issued and outstanding shares including the shares issued to raise the capital. After the close of the transaction, the shares will be distributed to the General Metal's shareholders of record after all regulatory requirements and registrations are completed. In exchange, General Metals will transfer its interest in the Independence gold and silver mining Project to Open Gold. Following the close of the transaction, the new board of Open Gold will consist of two Directors appointed by General Metals, two Directors appointed by Open Gold and a fifth independent director who is acceptable to both companies. The transaction will close once all of the conditions of the definitive agreement have been met. The most critical of these is that the $2.350 million dollar financing is closed and the money is in escrow. Commenting on the transaction, Daniel J. Forbush, President and CEO of General Metals, stated: "I am very pleased to have finally been able to raise the money we have needed to advance the Independence Project. The most satisfying aspect of the transaction is that it proves definitively that the market is undervaluing General Metals. As we approach the closing date we should see more of the undervaluation being reflected in the market. As a result of this transaction, General Metals' stockholders will own the majority interest in Open Gold with a much larger combined asset base consisting of the Independence Project, Open Gold's Mitchell Project and $2.35 million in new capital with which to advance both projects." "As shareholders should see from the structure of the Board, current GNMT management will play a significant role in the future development and commercialization of the assets of Open Gold," continued Forbush.