Silvore Fox Minerals Corp. (the “Corporation” or “Silvore Fox”– TSX Venture – “SFX”) is pleased to announce it has signed a Letter of Intent (“LOI”) with Sinotech Mineral Exploration Chile Limitada (“Sinotech)”, a subsidiary of Sinotech Mineral Exploration Co., Ltd. of China, for the acquisition of two gold with copper properties in Chile.
Sinotech Mineral Exploration Co. Ltd of China is the parent company of Beijing Donia Resources Co. Ltd. (“Beijing Donia”), the largest single shareholder of Silvore Fox with approximately 30% of the outstanding shares of the Corporation.
The properties consist of the Totora Gold Property which covers an area of 19.08 km² and the Harvest Property with an area of 23.89 km². Both properties are located in the Atacama Region of Chile, southwest of Copiapó, in a metamorphic terrain consisting of sedimentary rocks intruded by granitite. Sinotech is the sole and exclusive owner of the mineral claims comprising the properties.
Property #1 The Totora Gold Property
The Totora property is a big vein system target containing Gold and Copper. It is the more advanced of the two properties with Sinotech having conducted mapping, geochemical, geophysics (mag and IP), trenching, and the examining of the many artisanal pits. Initial test drill targets have been identified by Sinotech for this property. They occur within two prominent vein systems in a shear structure traceable for approximately five kilometers. Silvore Fox expects to announce a test drilling program in the coming weeks.
Property #2 The Harvest Gold Property
This property is also currently considered a vein system target containing Gold and Copper. Sinotech geologists previously compiled field data from the artisanal pits and trenches active on the property. Mapping and a ground magnetic survey have been completed. An IP (Induced Polarization) geophysical program is currently planned as the next step towards locating the most prominent drill targets within the vein systems, and this will be conducted soon.
“Silvore Fox representatives have been on site in Chile starting due diligence work on this acquisition. We were very impressed by the visible geology of the properties and the quality of work performed by Sinotech. And we have a strong comfort level with Sinotech through the involvement of our Chairman, Dr. Jingbin Wang, who is also Chairman of Sinotech Mineral Exploration Co. Ltd of China. These Chilean properties are promising properties for Silvore Fox and we will be moving ahead as quickly as possible to maximize that potential for our shareholders.
This transaction should clearly demonstrate to the marketplace the significance and depth of the working relationship between Silvore Fox and Beijing Donia. They have been a tremendous partner since late 2010 and we believe the best is yet to come from our continuing relationship.”
Terms of the LOI
Under the terms of the LOI, Silvore Fox will acquire from Sinotech a 100% interest in the properties for total consideration of CAD$6,000,000 (six million dollars) in a combination of cash and shares of the Corporation. The acquisition price is payable in three (3) installments as follows: (i) CAD$3,000,000 payable in Silvore Fox common shares on the completion of the Formal Agreement; (ii) CAD$1,000,000 payable in cash on the first anniversary date of the Formal Agreement; and (iii) CAD $2,000,000 payable in cash on the second anniversary date of the Formal Agreement.
The number of common shares of the Corporation issuable for the first installment of the acquisition price will be calculated using a weighted average trading price of Silvore Fox common shares for the 15 days preceding the execution date of this LOI, provided that the price per share is not less than the discounted price allowed by the stock exchange on which the shares of Silvore Fox are listed.
Should Silvore Fox decline to make some or all of the cash payments of the Acquisition Price to Sinotech this would result in a 10% loss of ownership for each one million dollars not paid, to a maximum of a 30% loss of ownership.
This transaction will be subject to entering into a Formal Agreement, meeting all regulatory requirements and approvals, including but not limited to, the TSX Venture Exchange, and the approval of the board of directors Silvore Fox.
The LOI provides Silvore Fox with a 90 day due diligence period, during which significant geological due diligence, including drilling, will be performed. Silvore Fox and Sinotech expect to sign the Formal Agreement on or before December 14, 2011.
Mr. Ian Chisholm, PEng, a qualified person as defined by National Instrument 43-101, has reviewed and approved the technical information contained in this news release.
The acquisition is a related party transaction for Silvore Fox pursuant to Policy 5.9 of the TSX Venture Exchange (“Policy 5.9”) As Sinotech’s affiliate, Beijing Donia, currently owns directly or indirectly or has direction or control over more than 10% of the issued and outstanding common shares of Silvore Fox. In accordance with Policy 5.9, the acquisition must be approved by a majority of the minority shareholders of Silvore Fox. In addition to shareholder approval, the acquisition will require the acceptance of the TSX Venture Exchange.
About Silvore Fox Minerals Corp.
Silvore Fox Minerals Corp. is a Toronto, Ontario, Canada based public mineral exploration company. We are focused on base and precious metal exploration projects.
On November 17th, 2010, Silvore Fox entered into a Strategic Agreement with Beijing Donia Resources Co. Ltd (“Donia”) at the China International Mining Conference, 2010. Donia is the single largest shareholder of Silvore Fox currently holding approximately 30% of the Corporation’s outstanding shares. This strategic partnership provides the Corporation with a strong platform for growth through mineral exploration expertise, funding and strategic acquisitions. SFX has an experienced management and geological team.
President and CEO
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 RELEASE.
This announcement contains forward-looking information and forward-looking statements (collectively "forward-looking information") under applicable securities laws, relating, but not limited to the Corporation's expectations, intensions, plans and beliefs. Forward-looking information can often be identified by forward-looking words such as 'anticipate', 'believe', 'expect', 'goal', 'plan', 'intend', 'estimate', 'may' and 'will' or similar words suggesting future outcomes or other expectations including with respect to the signing of the Definitive Agreement by the Corporation and Sinotech, the funding by the Corporation of the exploration and development on the properties and the payment by the Corporation to Sinotech for the interest in the joint venture company. Such forward-looking information is based on current expectations that involve a number of known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied by the forward-looking information. Factors that could cause actual results to differ materially from any forward-looking information include, but are not limited to, the risks that the parties will not proceed with the transaction, the actual terms of the transaction will differ from those currently contemplated and the transaction will not be successfully completed for any reason, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, inflation, delays in the development of projects, uncertainties relating to the interpretation of the geology, and unanticipated operational or technical difficulties and other factors. Such forward-looking information is based on a number of assumptions, including but not limited to, the ability of the Corporation to raise sufficient capital to pay the exploration and development costs on the properties and to pay for the interest in the joint venture company, the availability of skilled labour, availability of equipment, and future capital and operating costs. Should one or more risks and uncertainties materialize or should any assumptions prove incorrect, then actual results could vary materially from those expressed or implied in the forward-looking information and accordingly, readers are cautioned not to place undue reliance on this forward-looking information. The Corporation does not assume the obligation to revise or update this forward-looking information after the date of this announcement or to revise such information to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws.