Matachewan Consolidated Mines, Limited Announces Signing of Letter of Intent With Batavia Energy Corp. on Timmins Gold Property
October 25 2010 - 4:05PM
Marketwired
Matachewan Consolidated Mines, Limited ("MCM")(TSX VENTURE: MCM.A)
is pleased to announce the signing of a binding Letter of Intent
whereby Batavia can earn up to a 70% interest in eight mining
claims owned 100% by MCM located in Hislop and Guibord townships,
Ontario. The parties agreed to enter into a definitive agreement
based on standard industry terms as soon as practicable, including
a joint venture post 70% earn in by Batavia.
The property is 5 kilometers southeast of the producing Black
Fox Mine, 2 kilometers northeast of the producing Hislop mine, and
4 kilometers due north of the former producing Ross mine. Gold
mineralization was delineated on the property by Noranda during the
1980's and Royal Oak Mines Inc. initiated production from a small
open pit mine in the early 1990's, shipping approximately 100,000
tons grading 0.1 oz/ton for milling (Source: Resident Geologist)
when the gold price averaged $366 per oz.
Batavia and MCM plan to explore and establish gold in the
mineralized zones along strike and to depth from the previous
mining operation.
Key Terms
The key terms for the Batavia 70% earn in are:
-- 50% over three years after $60,000 cash payments, $450,000 in
exploration expenditures, and 500,000 Batavia shares;
-- 10% for completing a definitive feasibility study or $1 million in
additional exploration expenditures over 2 years; and
-- 10% for obtaining mine financing or $2 million in additional exploration
expenditures over 3 years.
MCM retains, in addition to its 30% interest, the following:
-- 2% NSR, 1% of which can be repurchased for $1 million; and
-- $25,000 annual advance royalty post Batavia's 50% earn.
Joint Venture Operating Profits
A joint venture will be established once Batavia has earned a
70% interest. The joint venture operating profits will be divided
based on participation in mine financing. Should Batavia provide
100% of mine financing, Batavia will receive 90% of joint venture
operating profits until recovery of 200% of expenditures, and
thereafter operating profits are divided 70/30 in favour of
Batavia.
Should MCM exercise a 20% mine financing option, the joint
venture operating profits will be divided 70/30 in favour of
Batavia from the establishment of the joint venture.
Batavia President John Kontak said: "Batavia is excited to have
the opportunity to earn in to the world class Timmins gold mining
camp. MCM and Richard McCloskey provide a great partner and we look
forward to getting busy in the field."
MCM President Richard McCloskey said: "We are pleased to have
this property reactivated and look forward to a long and successful
relationship with Batavia."
Ken Guy is the Qualified Person for the purposes of NI 43
101.
Matachewan is a Canadian publicly-traded Junior resource company
that has a significant royalty interest in a portion of the
Northgate Minerals Corporation developing Yonge-Davidson gold mine
located in the Matachewan, Ontario area, an indirect royalty
interest in developing Saskatchewan potash operations, and oil and
gas investments in Western Canada. Matachewan's common shares are
traded on the TSX Venture Exchange under the trading symbol
MCM.A
Certain statements contained in this press release constitute
"forward looking statements". These statements are based on current
expectations of management, however are subject to known and
unknown risks, uncertainties and other factors that may cause
actual results to differ materially from the forward-looking
statements in this news release. Readers are cautioned not to place
undue reliance on these statements. The Company does not undertake
any obligation to revise or update any forward-looking statements
as a result of new information, future events or otherwise after
the date hereof, except as required by securities laws.
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS
RELEASE
Contacts: Batavia Energy Corp. John Kontak President (416)
637-4616 ext. 4600 Shares Outstanding: 21,540,722 Matachewan
Consolidated Mines, Limited Richard McCloskey President (416)
364-2173 Shares Outstanding: 12,445,025
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