Gowest to Acquire New Texmonts 50% Interest in Frankfield Projectadmin
Gowest Amalgamated Resources Ltd. announce that it has entered into a letter of intent with New Texmont Explorations Ltd. pursuant to which it will acquire New Texmont’s 50% interest in the Frankfield gold project as well as all of New Texmont’s additional land holdings in the Tully area bordering the Frankfield project. Following the completion of the acquisition, Gowest will hold a 100% interest in the Frankfield project. The Frankfield project is located in Tully Township near Timmins, Ontario and has an inferred resource of approximately 500,000 oz of gold contained in approximately 2.7 million tonnes grading approximately 6.5 g/t. It is anticipated that the acquisition will be completed prior to November 30, 2008.
In consideration for New Texmont’s 50% interest in the Frankfield project, the Company will issue 15,000,000 common shares to New Texmont and also grant New Texmont a sliding scale Net Smelter Royalty (the “NSR”) equal to 1.00% at gold prices less than US$950.00 per ounce and 1.50% at gold prices equal to or greater than US$950.00 per ounce. The Company may purchase the NSR at anytime upon payment of $1,000,000 for each half percent (0.5%) of the NSR and will have a right of first refusal on any offer to purchase the NSR made by a third party. The Company will also make a onetime payment to New Texmont equal to the greater of $500,000 or 2,500,000 common shares upon a positive decision by the Company to place a mine into production.
Greg Romain, President and CEO of Gowest, stated: “This offer will give our shareholders full ownership of a first class project, located in a mining friendly environment and will allow us to fully define the resource which extends outside the current Frankfield boundaries”. Mr. Romain went on to say: “We are finalizing a drill program that should begin in the last quarter of 2008 to continue defining the resource”.
The board of directors of the Gowest has approved the acquisition subject to the finalization of a definitive agreement and the receipt of requisite shareholder and regulatory approvals, including the approval of the TSX Venture Exchange. Following the completion of the proposed transaction, New Texmont will hold approximately 37.7% of the issued and outstanding common shares of the Company and will be deemed to be a “control person” under applicable securities legislation and the policies of the TSX Venture Exchange. The completion of the transaction is subject to shareholder approval pursuant to the policies of the TSX Venture Exchange.