VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 22, 2010) - Sonora Gold & Silver Corp.(TSX VENTURE:SOC) ("Sonora" or the "Company") is pleased to announce anagreement for the option to purchase (the "Option Agreement") throughthe Company's wholly-owned Tanzania subsidiary, 100% of the 10 square km Negese Mining Permit (the "Negese Property"). The Negese Property is located in the Kilindi District of Northeastern Tanzaniaand is being optioned from an arms' length private Tanzaniancorporation (the "Vendor"). The Negese Property was selected on thebasis of growing artisanal mining activity in the area, includingprocessing of alluvial, colluvial and bedrock gold mineralized materialincluding pits and underground workings to a depth of 30 meters. Thegeological setting is notably similar to the rapidly developingMagambazi discovery by Canaco Resources (TSXV: CAN).
Gold mineralized zones in the form of discrete high grade lodes and abroad zone of disseminated sulphides hosted by garnet-silica alteredamphibolite in a corridor defined by artisanal workings and outcroppingmineralized material are known to exist along a minimum of 1600 metersof strike and across from 300 to 500 meters. The host envelope and themineralized zones dip at 15 to 25 degrees and the true width of thetarget zone is approximately 200 to 250 meters. The area is traversed bygravel roads and the topography is moderate. The project can beadvanced rapidly without significant infrastructure enhancements.
Reconnaissance mapping over the area shows structural repeats andadditional strike extensions which will be evaluated as part of theforthcoming work program. The Company completed an orientation samplingof the target zones in a field review and results from the rock samplesare pending. On the basis of this work, and the analytical results, theCompany is planning a sequenced exploration program including geologicalmapping, soil and rock geochemistry and drilling.
The terms of the option on the Negese Property consist of:
-- US$5,000 due on signing, US$25,000 due within 30 days;
-- The issue of 300,000 shares of the Company to the Vendor upon completion
of due diligence review and final TSX Venture Exchange approval;
-- Monthly payment to the Vendor of US$2,000 increasing to $5,000 over time
to maintain the option up to a maximum of four years;
-- A lump sum payment of US$1,300,000, payable at any time to exercise the
Option in full for 100% ownership of the Negese Property, subject to a
2% Net Smelter Return Royalty.
Further to the announcement of the Negese Option Agreement, theCompany will conduct a non-brokered private placement of units, pricedat
.25 per unit, consisting of 5,000,000 units, eachunit consisting of one common share and one-half (1/2) of one sharepurchase warrant for gross proceeds of CDN$1,250,000. Each whole warrant will be exercisable at a price of
.50for a period of two years from the date of closing. The proceeds of theprivate placement will be allocated towards transaction costs for theacquisition and for the exploration and development of the Negese Projectas well as for general working capital. This financing is integral toand forms part and parcel of the acquisition of the Negese property.
The Company is also very pleased to announce the appointment of Mr. Paul Matysek to the Board of Directors. Mr. Matysek is currently the President and Chief Executive Officer of Potash One Inc. where he is leading the company to feasibility stage on its Legacy Project in Saskatchewan. He was a founder and CEO of Energy Metals Corporation, which he helped grow from a market capitalization of $10 million to acquisition by a larger uranium producer for $1.8 billion. Since 1999, he has been involved in obtaining over $200 millionof exploration and development financing for a number of significantprecious metal and base-metal properties. Mr. Matysek is ageologist/geochemist and has served in an Executive or Directorcapacity, for several exploration and development companies including: First Quantum Minerals Ltd., First Majestic Resource Corp., Energy Metals Corp. and Lithium One Inc.He brings to the Company a wealth of technical and financial experienceas well as over 35 years of exploration and development experience. "Weare very honored to have a man of Mr. Matysek's caliber join Sonora,"states company President, Ken Churchill.
The Company has also granted a total of 900,000 incentive stock options at a price of
.25per share, to certain directors and officers of the Company. Theoptions are exercisable for up to three years from the date of grant.
The technical details of this announcement and the field sampling,pertaining to the Negese Property, were completed under the supervisionof David Bending, M.Sc., P.Geo., an independent Qualified Person pursuant to the standards of National Instrument 43-101.
On behalf of the Board of Directors.
Sonora Gold & Silver Corp.
Ken Churchill, President, Chief Executive Officer and Director
Neither the TSX Venture Exchange nor its Regulation ServicesProvider (as that term is defined in the policies of the TSX VentureExchange) accepts responsibility for the adequacy or accuracy of thisrelease.
FOR FURTHER INFORMATION PLEASE CONTACT:
Sonora Gold & Silver Corp.
Ken Churchill
President, Chief Executive Officer and Director
604-780-8708
www.sonoragoldcorp.com
Source: Sonora Gold & Silver Corp.