TanzaniaNorthern Rand Terminates Agreements to Acquire Tanzanian Properties
1/14/2011 8:01:02 AM - Market Wire
VANCOUVER, BRITISH COLUMBIA, Jan 14, 2011 (MARKETWIRE via COMTEX News Network) --
Northern Rand Resource Corp. ("Northern Rand" or the "Company") (TSX VENTURE: NRR) announces that it has terminated its property acquisition agreements with each of Eden Gold Limited, Eden Minerals Limited and Falco Goldfields Limited, all companies incorporated under the laws of the United Republic of Tanzania. Under the terms of the agreements (previously announced on September 23, 2010), Northern Rand proposed to acquire a 100% interest in certain prospecting licenses located in the Handeni district in the Tanga region of eastern Tanzania. Based on the results of detailed due diligence conducted in respect of the vendors' title to the licenses purported to be conveyed to the Company, it has been determined that it is in the best interest of the Company to terminate the agreements. After management's initial review of the titles, the Company retained counsel in Tanzania whose view was that the vendors did not have title to the vast majority of the licenses that they purported to convey to the Company. Notwithstanding ongoing assurances from the Vendors that perfection of title was imminent, the Company has determined that it is not in the Company's best interests to continue to countenance such delays by the Vendors. As a result, the board of directors of Northern Rand decided to terminate the agreements.
In addition to the above, the Company has demanded the immediate return from the vendors of the US$100,000 that was previously provided to a related entity of the vendors in furtherance of the proposed purchase by NRR from each of these companies of the prospecting licenses.
Based on the above, the Company has also determined not to proceed with its non-brokered private placement of up to 15,000,000 units for aggregate gross proceeds of up to $6,000,000, the terms of which were previously announced on September 23, 2010, as these funds were being raised primarily to satisfy the cash payments and exploration requirements related to the acquisitions described above.
Northern Rand also announces that its board of directors has accepted the resignation of Denis Hayes as President of the Company. Mr. Hayes had been appointed as President for his experience with exploration projects in east Africa. While the Company may continue to explore for other acquisitions in Africa, since the Company is not proceeding with the acquisition of the prospecting licenses in eastern Tanzania, Mr. Hayes has tendered his resignation and Michelle Gahagan, the current Managing Director of Northern Rand, has been appointed President of the Company. The board of directors would like to thank Mr. Hayes for his contributions to the Company and wish him well in his future endeavours.
Trading of the common shares of the Company had been halted pending the satisfaction of certain TSX Venture Exchange requirements in conjunction with the proposed acquisition of the prospecting licenses. Trading of the common shares is expected to resume on January 18, 2011.