Central Resources Corp.
TSX VENTURE : CBC

Central Resources Corp.

October 05, 2009 08:00 ET

Central Enters Into LOI for Newman Todd Property and Announces Private Placement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 5, 2009) - Central Resources Corp., (TSX VENTURE:CBC) ("Central" or the "Company") is pleased to announce that it has entered into a letter of intent ("LOI") with Redstar Gold Corp. (TSX-V: RGC) setting forth the proposed terms and conditions of a transaction whereby Central can earn a 60 percent undivided interest in the Newman Todd property in Ontario. Central also announces a non-brokered private placement offering of up to 5.5 million Units at $0.10 per Unit to raise proceeds of up to $550,000.

Newman Todd Property

The Newman Todd Project is located in the Red Lake gold mining camp in Northwestern Ontario. Previous work by Redstar on the Newman Todd property has outlined gold values within a silicified breccia zone that can be traced for at least two kilometres. Redstar has intersected values up to 61.02 g/t gold over 1.0 meter within a wider zone of 14.22 g/t gold over 5.0 metres or 60.0 metres of 1.72 g/t gold in previous drill programs. The Newman Todd property has a very similar geologic setting to many of the major mines in the Red Lake camp such as Goldcorp's Campbell and Red Lake mines. Similarities include proximity to a major structure, secondary northwest-southeast trending structures, proximity to a folded ultramafic body and association with a large Fe-carbonate alteration zone.

Stephen Kenwood, P. Geo., a "Qualified Person" as defined by National Instrument 43-101, has reviewed and approved the technical disclosure in this news release.

Letter of Intent

Pursuant to the LOI, the parties have agreed to negotiate a binding option agreement. Under the terms of LOI, Central can earn a 50 percent interest in the project over a four year period by funding $4.5 million in exploration and development work and issuing 500,000 shares to Redstar. In addition, Central must spend $1,000,000 in exploration expenses by September 30, 2010 and an additional $500,000 by December 31, 2010. Central can earn an additional 10 percent interest in the project by funding an additional $2 million in exploration and development work and issuing 750,000 shares by December 31, 2014.

The negotiation of the binding agreement is subject to satisfactory due diligence by Central, acceptance for filing by the TSX Venture Exchange and Central raising a minimum of $400,000.

Private Placement

Central is offering, on a non-brokered, private placement basis, up to 5.5 million Units, each Unit to consist of one common share and one share purchase warrant. Each warrant will entitle the holder to purchase an additional share for a period of two years at a price of $0.20 per share in the first year and $0.40 per share in the second year.

The proceeds of the private placement will be used to conduct exploration on the Newman Todd property and for general working capital. Closing is subject to acceptance for filing by the TSX Venture Exchange.

About Central Resources

Central Resources Corp. is a junior mineral exploration company created to leverage the extensive knowledge and expertise of a team of financial and resource industry professionals. The management team is committed to developing a successful junior resource company through the acquisition and exploration of properties of merit.

The securities offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or any applicable exemption from the registration requirement of such Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

This news release contains forward-looking information, which involves known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from current expectation. Important factors - including the ability of the parties to negotiate the terms of a binding agreements, the outcome of due diligence investigations, availability of funds, the results of financing efforts, the results of exploration activities -- that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time on SEDAR (see www.sedar.com). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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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