Corona Gold Corporation

March 08, 2010 08:30 ET

Corona Gold Grants Option on Sugar Zone Property

TORONTO, ONTARIO--(Marketwire - March 8, 2010) - Corona Gold Corporation ("Corona") (TSX:CRG) is pleased to announce that it has entered into a binding letter agreement (the "Letter Agreement") with Harte Gold Corp. ("Harte") (TSXV:HRT) pursuant to which Corona has granted to Harte an option (the "Option") to acquire Corona's 51% joint venture interest in the "Sugar Zone Property" located in the Dayohessarah Lake area, Ontario. Harte currently holds the remaining 49% joint venture interest in the Sugar Zone Property.

Under the terms of the Letter Agreement, which is subject to regulatory approval, Harte can exercise the Option and thereby acquire Corona's 51% joint venture interest in the Property by making the following payments and share issuances to Corona:

  1. within 10 business days of execution of the Letter Agreement, Harte will issue to Corona that number of common shares of Harte that represents 9.9% of the number of outstanding shares of Harte as at the date of the Letter Agreement and after giving effect to the issuance of such shares (the "Initial Shares") and will pay Corona Cdn$10,000 (the "Initial Payment");

  2. Harte will pay Corona Cdn$2,000,000 in cash on execution of a comprehensive agreement with respect to the Option (the "Comprehensive Agreement");

  3. Harte will issue to Corona upon execution of the Comprehensive Agreement such number of additional common shares of Harte as will result in Corona holding 9.9% of the number of outstanding shares of Harte as at the date of the Comprehensive Agreement and after giving effect to the issuance of such shares;

  4. Harte will pay Corona Cdn$90,000 in cash on or before each sixth month anniversary of the Comprehensive Agreement until payment of one of the amounts specified in paragraph (e) below; and

  5. Harte will pay Corona Cdn$2,500,000 in cash on or before the second anniversary of the Comprehensive Agreement or, failing such payment, Cdn$3,000,000 in cash on or before the third anniversary of the Comprehensive Agreement.

Harte will also become the operator of the Sugar Zone property upon delivery of the Initial Shares and payment of the Initial Payment. The Letter Agreement and the Option may be terminated and operatorship will revert to Corona if the Comprehensive Agreement is not entered into within 90 days or if Harte fails to make any of the shares issuances or cash payments described above.

Murray John, President of Corona, commented that "the option agreement with Harte will unitize the property under Harte's ownership, allowing exploration of the Sugar Zone to be accelerated with no further dilution to Corona shareholders. The decision to option Corona's interest is consistent with management's stated objective of maximizing the value of its existing properties and exploring new resource-based exploration and investment initiatives."

Forward-Looking Information:

This press release contains certain "forward-looking information". All statements, other than statements of historical fact, that address activities, events or developments that Corona believes, expects or anticipates will or may occur in the future (including, without limitation, statements relating to Corona's anticipated receipt of cash and shares of Harte pursuant to the Letter Agreement) constitute forward-looking information. This forward-looking information reflects the current expectations or beliefs of Corona based on information currently available to it. Forward-looking information is subject to a number of significant risks and uncertainties and other factors that may cause the actual results to differ materially from those discussed in the forward-looking information, including, without limitation, that Harte may not receive regulatory approval for the transactions contemplated by the Letter Agreement, that Corona and Harte may not be able to negotiate the Comprehensive Agreement and Harte may not be able to raise sufficient funds to satisfy its payment obligations thereunder.

Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, Corona disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although Corona believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.

Contact Information

  • Corona Gold Corporation
    Murray John