DGAP-News: Brazil Resources Inc. Announces Agreement to Acquire 100% of the Cachoeira Project from Luna Gold Corp.
(firmenpresse) - DGAP-News: Brazil Resources Inc. / Key word(s): Contract
Brazil Resources Inc. Announces Agreement to Acquire 100% of the
Cachoeira Project from Luna Gold Corp.
11.07.2012 / 14:00
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Vancouver, British Columbia - Brazil Resources Inc. (the 'Company' or
'Brazil Resources') (TSX-V: BRI; OTCQX: BRIZF) is pleased to announce that
it has entered into a definitive share purchase agreement (the 'Agreement')
with Luna Gold Corp. ('Luna') to acquire all of the issued and outstanding
shares of Luna Gold (International) Corp., a wholly-owned subsidiary of
Luna, which owns an indirect 100% interest in the Cachoeira gold project in
ParáState, Brazil (the 'Cachoeira Project').
Amir Adnani, Chairman of the Company, stated: 'We are very pleased to
announce the Agreement to acquire the Cachoeira Project, with its
substantial prior exploration and mineral resource estimate. This will make
the Company's fourth and most advanced project in the prolific Gurupi Gold
Belt, with similar geology and lying on-trend and 85 km. northwest of the
other three projects. The acquisition is consistent with the Company's
strategy to increase its exposure in this richly endowed mineral province.'
Steve Swatton, President and CEO, added, 'The geological team here is
qualified and standing by to get on-site, and to start developing this
resource with additional definition drilling, extension drilling, initial
economic studies and licensing. It should be noted that all or most of the
greenstone-hosted resource is near-surface and is believed to be
open-pittable, with substantial room for growth laterally and to depth.'
The Cachoeira Project
The Cachoeira Project is located on the Gurupi Gold Belt, approximately 220
kilometres southeast of the ParáState capital of Belém and about 270
kilometres northwest of the port city of São Luis, Maranhão State. The
Cachoeira Project comprises one contiguous block consisting of two mining
and three exploration licenses covering approximately 4,742 hectares.
Between 1985 and 2008, Luna and prior operators, completed drilling
programs at the Cachoeira Project consisting of 183 diamond core holes
(23,263 m), 94 RC holes (6,732 m), eight combined diamond/RC holes (1,307
m), and 488 auger holes (5,798 m) for a total of 773 holes drilled (37,100
m).
Luna previously completed a National Instrument 43-101 ('NI 43-101')
technical report respecting the Cachoeira Project dated February 3, 2011,
which was prepared by Scott Wilson Roscoe Postle Associates Inc. and
entitled 'Technical Report on the Cachoeira Project, Para State, Brazil'
(the 'Report'). The Report estimated:
* an indicated mineral resource of 12.5 million tonnes at 1.11 g/t Au, or
446,000 ounces of gold; and
* an inferred resource of 5.4 million tonnes at 1.27 g/t Au, or 221,300
ounces of gold,
for the Tucano, Arara and Coruja deposits at the Cachoeira Project as at
December 22, 2010. In addition, the Report stated that good potential
exists for continuation of mineralization at depth and between the three
deposits following the major structural corridor.
In addition to governmental royalties, the Cachoeira Project is subject to
a 4.0% net profits royalty payable to prior owners. Up to one-half of such
royalty interest may be re-acquired prior to the first anniversary of
commercial production at the Cachoeira Project by paying the holders
US$1,000,000 for each 0.5% increment of the royalty interest. If production
is not achieved at the Cachoeira Project by March 10, 2014, a US$300,000
per year payment in lieu of the royalty will be payable to the royalty
holders.
Investors are encouraged to review the full Report, which is available for
download under Luna's profile at www.sedar.com. To the best of the
Company's knowledge, information, and belief, there is no new material
scientific or technical information that would make the disclosure of the
mineral resources set forth herein and based on the Report inaccurate or
misleading. Brazil Resources plans to complete an updated technical report
respecting the Cachoeira Project prior to closing of the transaction.
The Agreement
Subject to the terms of the Agreement, immediately upon closing of the
transaction, Brazil Resources will acquire 100% of the issued and
outstanding shares of Luna Gold (International) Corp., which holds an
indirect 100% interest in the Cachoeira Project through its subsidiaries.
The consideration payable by Brazil Resources to Luna under the Agreement
will consist of:
(i) $500,000 cash and 1,428,000 common shares of Brazil Resources ('BRI
Shares') upon closing of the transaction;
(ii) $300,000 cash and 1,214,000 BRI Shares within 12 months of closing the
transaction;
(iii) $300,000 cash and 1,214,000 BRI Shares within 30 days of receipt of
approval of a mine development plan by the DNPM and the environmental
preliminary licences for a gold mining operation relating to the Cachoeira
Project;
(iv) $2,500,000, payable in cash or BRI Shares, at Brazil Resources' sole
discretion, upon commencing mine construction at the Cachoeira Project,
consisting of completion of $500,000 of expenditures towards such
construction; and
(v) $3,000,000, payable in cash or BRI Shares, at Brazil Resources' sole
discretion, one year after achieving commercial production at the Cachoeira
Project.
Notwithstanding the foregoing milestones, all of the payments from Brazil
Resources to Luna will become due and payable four years after the closing
date of the transaction. Any discretionary share-based payments will be
valued based on the volume weighted average trading price of the BRI Shares
for the 10 days prior to such payment. Brazil Resources' payment
obligations will be evidenced by a promissory note issued by the Company to
Luna, containing customary events of default and acceleration provisions,
and will be secured by security interests granted by the Company and its
subsidiaries to Luna against, among other things, interests in the
Cachoeira Project and the shares of the subsidiaries to be acquired under
the Agreement.
Completion of the transaction is conditional upon, among other things,
customary closing conditions and the receipt of all required consents and
approvals, including the approval of the TSX Venture Exchange and
completion of an updated NI 43-101 compliant technical report by the
Company.
About Brazil Resources Inc.
Brazil Resources is a publicly listed mineral exploration company with a
focus on the acquisition and development of projects in emerging producing
gold districts in Brazil and other parts of South America. Currently, the
Company is advancing its MontesÁureos, Trinta and Maua Gold Projects
located in the Gurupi Gold Belt in the state of Maranhão in northeastern
Brazil, and its Pireneus Gold Project in Goias State, in central Brazil.
Brazil Resources is also seeking to acquire and develop additional gold
properties in Brazil and other locations in South America.
For further information, please contact:
Patrick Obara
Telephone: +1 (855) 630-1001
info(at)brazilresources.com
Technical Information
Paulo Pereira, the Company's Vice President of Exploration has supervised
the preparation of the technical information contained in this news release
and reviewed the Report on behalf of the Company. Mr. Pereira holds a
Bachelor degree in Geology from Universidade do Amazonas in Brazil, is a
qualified person as defined in NI 43-101 and is a member of the Association
of Professional Geoscientists of Ontario.
FORWARD LOOKING STATEMENTS
This news release contains certain forward-looking statements that reflect
the current views and/or expectations of the Company with respect to its
performance, business and future events, including statements relating to
the completion of transactions contemplated under the Agreement and the
Company's plans and expectations regarding the Cachoeira Project.
Forward-looking statements are based on the then-current expectations,
beliefs, assumptions, estimates and forecasts about the business and the
industry and markets in which the Company operates, including, without
limitation, assumptions relating to the ability of the Company and Luna to
satisfy the conditions required in order to complete the Agreement and
related agreements and the expected effects or benefits of the acquisition
of the Cachoeira Project on the business of the Company. Forward-looking
statements are not guarantees of future performance and involve risks,
uncertainties and assumption which are difficult to predict. Investors are
cautioned that all forward-looking statements involve risks and
uncertainties, including, without limitation: any inability of the parties
to satisfy the conditions of the closing under the Agreement, inherent
risks involved in the exploration and development of mineral properties;
uncertainties involved in interpreting drill results and other exploration
data; any inability of the Company to implement its business plan in
respect of the Cachoeira Project as planned or at all; the Company may lose
or abandon its mineral rights or may fail to receive necessary permits,
approvals or licences respecting its properties, including the Cachoeira
Project; fluctuating prices of commodities; potential delays in exploration
or development activities, mine development and production costs;
regulatory restrictions, including environmental regulatory restrictions
and liability; an inability to raise additional funds when necessary;
potential defects in title to the Company's properties; fluctuations in
currency exchange rates; operating hazards and risks; competition;
potential inability to find suitable acquisition opportunities and/or
complete the same; and other risks and uncertainties listed in the
Company's public filings, including th company's annual management's
discussion&analysis. These risks, as well as others, could cause actual
results and events to vary significantly. Accordingly, readers should not
place undue reliance on forward-looking statements and information, which
are qualified in their entirety by this cautionary statement. There can be
no assurance that forward-looking information, or the material factors or
assumptions used to develop such forward looking information, will prove to
be accurate. The Company does not undertake any obligations to release
publicly any revisions for updating any voluntary forward-looking
statements, except as required by applicable securities law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this news release.
End of Corporate News
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