Tectonic Announces Agreement in Principle to Acquire Comstock Metals Ltd. and Corona Property
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 02/03/11 -- Tectonic Minerals Corporation ("TEK") (TSX VENTURE: TEK.P) is pleased to announce that it has entered into a letter of intent dated effective January 21, 2011, with Comstock Metals Ltd. ("Comstock") to acquire (the "Acquisition") all of the issued and outstanding shares of Comstock. The Acquisition is expected to constitute TEK's qualifying transaction pursuant to the policies of the TSX Venture Exchange and result in TEK being classified as a mineral exploration company. The Acquisition is at arm's length and is not expected to be subject to shareholder approval.
Comstock's principal resource property is the Corona Gold-Silver Project, consisting of six exploration concessions covering 1,371 hectares located in Chihuahua, Mexico. The Corona Project is an exploration stage gold-silver project. Comstock has an option to acquire a 60% interest in the Corona Property by paying $50,000, issuing 300,000 shares and expending $500,000 on the property over the next 3 years. Comstock may acquire an additional 15% interest (for a total 75% interest) by completing a positive bankable feasibility study on the Corona Property.
The Corona Property is located approximately 230km southwest of the city of Chihuahua in the Uruachi district of Chihuahua, Mexico. The property lies within the Sierra Madre Occidental mount range, and is located in the heart of the Sierra Madre Occidental Gold-Silver District, an emerging epithermal district featuring several recent discoveries hosting million-plus ounce gold deposits. Gammon Gold's Ocampo mine, Agnico-Eagle's Pinos Altos mine, Fresnillo PLC's new multi-million ounce Orisyvo gold/silver deposit, and Agnico-Eagle/Golden Goliath's Las Bolas/Los Hilos property option/joint venture are some of the known discoveries in the area.
Comstock's initial program on the Corona Property, comprised of rock chip sampling, stream sediment sampling and soil sampling, has generated highly anomalous results and identified eight target areas for follow up work. Mineralization is epithermal in nature, and most mineral occurrences are vein-type quartz, as veins, breccias zones, stockworks and silicified zones cutting lower volcanic group andesitic rocks or subvolcanic intrusive.
Pursuant to the terms of the Acquisition, Comstock will complete a non-brokered private placement of up to 8,750,000 units (a "Unit") at a price of $0.20 per Unit for aggregate gross proceeds of $1.75 million (the "Financing"). Each Unit will be comprised of common share and one-half of a warrant, a whole warrant entitling the holder to purchase a common share at a price of $0.35 for a period of 18 months. The proceeds of the Financing will be used to fund the exploration and development of the Comstock's properties and for general working capital. It is expected that finder's fees in the amount of 10% of the gross proceeds and finder's warrants in the amount of 5% of the Units sold, each entitling the holder to purchase one common share at a price of $0.35 per share for a period of 18 months, will be paid in connection with the Financing.
In consideration for the Acquisition, TEK will issue one common share from treasury in exchange for each of the 29,788,682 shares of Comstock currently outstanding and for each share of Comstock issued pursuant to the Financing, for an aggregate issuance of 38,538,682 common shares of the Company if the Financing is fully subscribed. Upon completion of the Acquisition, TEK is expected to have 43,038,682 common shares issued and outstanding, assuming the Financing is fully subscribed.
The existing principals of TEK have also agreed to transfer 2,500,000 previously issued TEK shares held in escrow, for aggregate proceeds of $187,500, at the direction of Comstock. At this time, no advances or loans from TEK to Comstock are contemplated prior to the completion of the Acquisition.
Comstock was incorporated pursuant to the laws of British Columbia. None of the shareholders of Comstock beneficially hold or control a controlling interest in Comstock.
Upon completion of the Acquisition, the Board of Directors of TEK will be comprised of Messrs. Rasool Mohammad, Larry Johnson, Douglas Turnbull and Gordon Davidson. The offices of Chief Executive Officer and Chief Financial Officer will be held by Rasool Mohammad and Larry Johnson, respectively.
Rasool Mohammad - President, Chief Executive Officer and Director
Mr. Mohammad received a B.Sc. (Mining Engineering) from the NWFP University of Engineering and Technology, in Peshawar, Pakistan in 1991. He has over 15 years experience in the mining and mineral exploration industry. Mr. Mohammed has worked for companies such as BHP, Miramar Mining, Hunter Dickenson Inc., Cumberland Resources Ltd., and several other Vancouver based junior exploration companies, and has worked on mining projects in Canada, the United States, Mexico, Peru, and Brazil. He speaks Spanish, Portuguese, Urdu and Pashto.
Larry Johnson - Chief Financial Officer, Corporate Secretary and Director
Mr. Johnson received a B.Sc. (Geology) from the University of British Columbia in 1972. He became a Chartered Accountant in 1975 and was a member of the Institute of Chartered Accountants of British Columbia from 1975 to 1991. He has worked in the field across North America in the exploration for diamonds, precious metals and base metals, and has also worked as an accountant and CFO for several junior resource companies.
Gordon Davidson - Director
Mr. Davidson received a B.Sc. (Hons) in Geology from Queens University in 1976. He has over 20 years of experience in uranium exploration, including directing exploration strategy and project management. Mr. Davidson is currently the General Manager, Projects, for Commander Resources Ltd. and was previously the Vice President, Exploration, of Bayswater Uranium Corporation and the Exploration Manager, Canada, of Cumberland Resources Ltd. Mr. Davidson is credited with having a significant role in the discovery of Areva's Andrew Lake uranium deposit in the Kiggavik Trend of the North Thelon Basin, Canada, as well as the discovery of unconformity-type uranium mineralization in the South Thelon Basin at the Boomerang Project. He also has significant uranium exploration experience in the Athabasca Basin as well as Labrador's Central Mineral Belt. At Cumberland Resources Ltd., Mr. Davidson directed exploration activities and was a member of the team bringing the Meadowbank Gold Project to a positive production decision.
Douglas Turnbull - Director
Douglas Turnbull received an B.Sc. (Hons) in Geology from Lakehead University in 1988, and is a Qualified Professional Geoscientist recognized by the Association of Professional Engineers and Geoscientists of British Columbia. He is a consulting geologist with over 20 years experience in diamond, precious metal and base metal exploration. Mr. Turnbull has worked for companies such as Monopros Ltd., Goldfields Mining Corporation, Prime Exploration Ltd., Adrian Resources Ltd., and Madison Enterprises Corp., and currently sits on the Board of Directors of Buffalo Gold Ltd., Oromin Exploration Ltd. and Grizzly Diamonds Ltd. Mr. Turnbull was part of exploration teams responsible for the exploration and development of the Eskay Creek Gold Deposit in British Columbia, Canada, the Petaquilla Cu-Au Porphyry Deposit in Panama and the Mt. Kare Gold Deposit in Papua New Guinea.
A sponsor has not yet been retained for in connection with the Acquisition.
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release. 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.
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