Western Standard acquires Freegold's Almaden gold project
October 01 2009 - 7:26PM
PR Newswire (US)
VANCOUVER, Oct. 1 /PRNewswire-FirstCall/ -- October 1, 2009 -
Western Standard Metals Ltd. (TSX-V: WSM) ("Western Standard") and
Freegold Ventures Limited (TSX: ITF) ("Freegold") are pleased to
announce that further to the news release dated September 8, 2009,
Western Standard has completed the acquisition of a 100% interest
in Freegold's Almaden gold project located in Idaho (the "Almaden
Project"). In consideration, Western Standard has issued: - 4
million common shares to Freegold; - 1 million common shares to
Tiomin Resources Inc. ("Tiomin); - a cash payment of USD$2.9M to
Freegold's secured bridge debt holder; and - 500,000 warrants
exercisable at CAD$0.30 per share until September 30, 2011 to the
bridge debt holder. Tiomin which holds a secondary secured debt in
the amount of US$2,329,000 over the assets of Freegold has
converted approximately two-thirds of its debt into a total of
16,714,773 shares of Freegold, as a result of which Tiomin will
hold 19.99% of the outstanding shares of Freegold. Additionally,
the issuance by Western Standard of 1,000,000 common shares to
Tiomin reduces the debt balance to $854,974 which will be
repayable, by Freegold, over a two year term and will bear an
annual interest rate of 6%. Tiomin will also have the right to
nominate one member to Freegold's Board of Directors. The Almaden
Project is located in rural western Idaho with excellent access and
nearby hydro-electric power lines. The project is host to a
low-sulphidation, epithermal gold deposit drilled extensively from
1978 to 1992 by a number of companies including Homestake and Amax
Gold. Freegold optioned the property in 1995 and commissioned
Watts, Griffis and McQuat ("WGM") to complete a feasibility study
based on additional drilling and metallurgical test work completed
by Freegold. The feasibility study, completed in 1997, envisioned
gold production of approximately 100,000 ounces/year over a 5-year
mine life by open pit mining and heap leach extraction. An
independent NI43-101 Technical Report authored in 2006 outlined an
indicated resource of 520,351 ounces (22,478,454 tonnes grading
0.72 grams/tonne) and an inferred resource of 361,477 ounces
(18,133,902 tonnes grading 0.62 grams/tonne) at a cut-off grade of
0.38 grams/tonne gold. Since this estimate an additional 16,677
metres of reverse circulation and diamond drilling with the
intention of upgrading the resource to the measured and indicated
categories has been completed. A revised NI43-101 Technical Report
authored by Mine Development Associates will be filed later this
month. In conjunction with the exploration program, Western
Standard will undertake a new resource-estimate and metallurgical
test work that will form the basis of a feasibility study that
examines and optimizes various production scenarios to determine
the most economically viable method to extract and process the
mineralization, while minimizing the effects on the environment.
The Almaden Project is subject to a 4% net proceeds royalty
interest payable to underlying property owners and a net smelter
returns royalty of 1% (for gold prices equal to or less than
US$425/oz) or 2% (for gold prices greater than US$425/oz) payable
to Royal Gold Inc. Western Standard will initiate a drill program
to explore the extension of the near surface mineralization that is
open to the north and south, as well as test for deeper high-grade
structurally controlled gold mineralization. In conjunction with
the exploration program, Western Standard will also undertake
further metallurgical test-work that will form the basis of a
feasibility study that examines and optimizes various production
scenarios. Additionally, Western Standard is pleased to announce
the closing a first tranche of a non-brokered private placement of
2,684,000 Units for gross proceeds of $563,745. Each Unit consisted
of one common share and one share purchase warrant exercisable into
an additional common share at a price of $0.28 until September 30,
2011. A total of 110,000 shares were issued as a finder's fee in
this placement. All shares issued under the placements are subject
to a four month hold period, being January 30, 2010. Upon
completion of the Transaction and the private placements to finance
the acquisition, Western Standard's total issued and outstanding
will be 42,968,067 million shares. Michael Gross, M.Sc., P.Geo.,
Vice President Exploration of Freegold and Walter Melnyk, P.Eng.,
President of Western Standard are Qualified Persons as defined by
National Instrument 43-101, have reviewed and approved the
technical disclosure contained in this news release. Freegold
Ventures is pleased to announce that J. Kristina Walcott has been
appointed President and Chief Executive Officer of the Company.
WESTERN STANDARD METALS LTD. FREEGOLD VENTURES LIMITED Walter
Melnyk, Kristina Walcott President Chief Executive Officer This
press release contains forward-looking information. This
forward-looking information includes, or may be based upon,
estimates, forecasts, and statements as to management's
expectations with respect to, among other things, the size and
quality of the mineral resources located at the Almaden project,
progress in development of mineral properties, demand and market
outlook for metals and future metal prices. Forward-looking
information is based on the opinions and estimates of management at
the date the information is given, and is subject to a variety of
risks and uncertainties and other factors that could cause actual
events or results to differ materially from those projected in the
forward-looking information. These factors include the inherent
risks involved in the exploration and development of mineral
properties, uncertainties with respect to the receipt or timing of
required permits and regulatory approvals, the uncertainties
involved in interpreting drilling results and other geological
data, fluctuating metal prices, the possibility of project cost
overruns or unanticipated costs and expenses, uncertainties
relating to the availability and costs of financing needed in the
future and other factors. Mineral resources that are not mineral
reserves do not have demonstrated economic viability. Inferred
mineral resources are considered too speculative geologically to
have economic considerations applied to them that would enable them
to be categorized as mineral reserves. There is no certainty that
mineral resources will be converted into mineral reserves. The
forward-looking information contained herein is given as of the
date hereof and neither Western Standard nor Freegold assumes any
responsibility to update or revise such information to reflect new
events or circumstances, except as required by 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.
CONTACT: Tanuja de Silva , CFO & Director, Western Standard
Metals Ltd., Tel: (604) 718-5454, ; Mark Feeney, Investor
Relations, Freegold Ventures Limited, Tel: (604) 786-2587,
DATASOURCE: Freegold Ventures Limited CONTACT: Tanuja de Silva ,
CFO & Director, Western Standard Metals Ltd., Tel: (604)
718-5454, ; Mark Feeney, Investor Relations, Freegold Ventures
Limited, Tel: (604) 786-2587,
Copyright