Cangold Ltd. has received final approval from the TSX Venture Exchange on the previously announced transaction for the option to acquire up to a 100-per-cent interest in the mining rights to the Guadalupe de los Reyes gold-silver project in Mexico and the non-brokered private placement financing.
"We are pleased to have final exchange approval on this transaction and the private placement," stated Robert Archer, president and chief executive officer of Cangold. "Guadalupe de los Reyes is an exciting project with excellent potential, and we intend to get our geologists on the ground as quickly as possible."
As announced on April 15, 2014, the company signed a formal agreement whereby Cangold has been granted an option to acquire from Vista Gold Corp. up to a 100-per-cent interest (subject to certain underlying royalties) in the mining rights to the Guadalupe de los Reyes gold-silver project in Sinaloa, Mexico. The net proceeds of the private placement will be used to make option payments, for initial work on the project and for general working capital.
The Guadalupe de los Reyes project comprises 6,302 hectares, covering a past-producing district dating back to 1772. A preliminary economic assessment carried out on the project by Tetra Tech for Vista on March 4, 2013, estimated an indicated resource of 6.8 million tonnes at a grade of 1.73 grams per tonne gold and 28.71 grams per tonne silver (380,100 ounces gold and 6,315,300 ounces silver), as well as an inferred resource of 3.2 million tonnes at a grade of 1.49 grams per tonne gold and 34.87 grams per tonne silver (155,200 ounces gold and 3,639,000 ounces silver) at a cut-off grade of 0.50 gram per tonne gold.
It should be noted that this PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the PEA forecast will be realized or that any of the resources will ever be upgraded to reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Cangold submitted a report to the exchange in order to classify the above estimate as a current mineral resource for Cangold, as per National Instrument 43-101 requirements, and the report has now received final exchange approval. Cangold will provide further information on subsequent work programs in due course.
As announced on June 13, 2014, the company closed its private placement oversubscribed. On closing, the company issued 8.5 million units at 10 cents per unit for gross proceeds of $850,000, with each unit comprising one common share and one-half of one non-transferable share purchase warrant.
All securities and funds that were being held in trust pending final receipt of exchange approval have now been released.
Robert Brown, PEng, director and vice-president, exploration, for Cangold is the qualified person for the company. He has reviewed the technical information referenced above and has approved this news release.