Vangold Resources Ltd. ("Vangold" or the "Company") (TSX VENTURE:
VAN) is pleased to announce it has entered into a letter of intent
with New Guinea Gold Corporation ("NGG") to acquire certain mineral
exploration properties in Papua New Guinea. Vangold announces a
proposed spin-off of certain oil and gas assets pursuant to a
proposed plan of arrangement.
LETTER OF INTENT WITH NEW GUINEA GOLD CORPORATION ("NGG")
Vangold announces that it has entered into a letter of intent on
August 19, 2009 with New Guinea Gold Corporation (TSX VENTURE: NGG)
to acquire from NGG:
- 30,000,001 common shares of Pacific Kanon Gold Corp. ("PKG"),
a private company incorporated in British Columbia;
- Shareholder loans made by NGG to PKG;
- NGG's 20% interest in the Mount Penck Property in Papua New
Guinea; and
- a 50% interest in NGG's Feni Island Property in Papua New
Guinea.
The purchase price for the acquisition is CDN$3,000,000
consisting of a cash payment of $500,000 and the issuance of
Vangold common shares (the "Payment Shares") equal to 19.9% of the
then issued and outstanding Vangold common shares. The cash payment
will be made within two business days of approval by the TSX
Venture Exchange ("TSXV"). If TSXV approval for the $500,000
payment is not received within three business days, Vangold will
loan the $500,000 to NGG. The loan will be non-interest bearing and
repayable within nine months. The Payment Shares will be issued
upon completion of the proposed spin-off and consolidation. If the
reorganization does not complete, the Payment Shares will be issued
on or before May 19, 2010. In either event NGG will not participate
in the proposed reorganization.
Under the letter of intent, Vangold has agreed to provide NGG a
carried interest of 10% in the Feni Island Property, 5% in the
Mount Penck Property and 5% in the Allemata and Ferguson properties
held by PKG. The letter of intent is subject to TSXV approval.
UNBUNDLING OF OIL AND GAS ASSETS
Vangold also announces that pursuant to a plan of arrangement,
it proposes to spin-off certain oil and gas properties in Alberta,
Kenya and Rwanda (the "Oil and Gas Assets") and common shares of
IBC Advanced Alloys Corp. (the "IB Shares") into a newly
incorporated public company ("Newco"). Upon completion, Newco will
replace Vangold as the owner of the Oil and Gas Assets. It is
planned that Vangold's shareholders as of the spin-off record date
will receive common shares of Newco, rights to acquire additional
Newco and IB Shares. Vangold shareholders will retain their
original positions in Vangold after the spin-off. It is planned
that Newco would list its common shares on the TSXV.
The proposed spin-off is expected to provide Vangold's
shareholders with a number of significant benefits which
include:
- a clear mandate for each company to pursue its own business
plan and to achieve its own strategic goals;
- anticipated higher capital markets valuations for these two
distinct asset bases;
- greater corporate clarity and transparency;
- continued exposure to each company's potential upside and
additional growth opportunities; and
- experienced management teams with expertise with each
company's asset base.
As part of the reorganization and distribution of the proposed
spin-off, Vangold plans to consolidate its issued and outstanding
common shares.
The foregoing description is a general outline only. The Company
is formulating the precise structure and ratio for the
consolidation in conjunction with its professional advisors. The
Company will issue a detailed news release when the final structure
is approved by its board of directors.
The proposed spin-off and consolidation will be subject to TSXV
approval and to the approval of Vangold's shareholders by special
resolution.
Dal Brynelsen, President and CEO of Vangold comments: "I am very
pleased that Vangold has secured a 100% interest in the Kanon and
Feni gold camps. This will allow Vangold to achieve its long sought
after goal of creating a viable oil exploration company based in
East Africa and an advanced gold exploration company based in Papua
New Guinea. In the long term, this should create significant new
shareholder value and bring clarity and direction to these world
class projects. It is important that New Guinea Gold continues to
have direct involvement in these gold properties, providing
invaluable technical and administrative expertise and support when
called upon. We are pleased to have New Guinea Gold as a major
shareholder and value our continued relationship with them."
The Company also announces that it has granted a total of
5,350,000 stock options at an exercise price of $0.15 per share to
directors, officers, employees and consultants of the Company. The
options carry a ten year term and vest in accordance with the
policies of the TSXV, expiring August 11, 2019. The options are
being granted pursuant to the terms of the Company's 2008 stock
option plan and are subject to TSXV policies and approval.
Caution Regarding Forward-looking Information
Information in this news release respecting the proposed plan of
arrangement for the Oil and Gas Assets, the TSXV listing of Newco,
the share consolidation of Vangold and potential opportunities
constitutes forward-looking information. Statements containing
forward-looking information express, as at the date of this news
release, the Company's plans, estimates, forecasts, projections,
expectations, or beliefs as to future events or results and are
believed to be reasonable based on information currently available
to the Company.
Forward-looking statements and information are based on
assumptions that financing, equipment and personnel will be
available when required and on reasonable terms, and all necessary
regulatory approvals will be obtained, none of which are assured
and are subject to a number of other risks and uncertainties.
There can be no assurance that forward-looking statements will
prove to be accurate. Actual results and future events could differ
materially from those anticipated in such statements. Readers
should not place undue reliance on forward-looking information.
On Behalf of the Board of VANGOLD RESOURCES LTD.
Dal Brynelsen, President and CEO
Neither 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.
Contacts: Vangold Resources Ltd. Dal Brynelsen 604-684-1974
604-685-5970 (FAX) brynelsen@vangold.ca www.vangold.ca
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