DiscFactories Corporation

DiscFactories Corporation

May 29, 2006 12:43 ET

DiscFactories Corporation Announces Change of Business Transaction

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 29, 2006) -

Not for dissemination in the United States of America

Further to its previously announced reorganization initiative, DiscFactories Corporation (the "Corporation") (TSX VENTURE:DSK) today announced that it has entered into an agreement dated May 19, 2006 to complete a change of business transaction (the "Transaction"). Pursuant to the Transaction, which has been negotiated at arm's length, the Corporation will, subject to regulatory and shareholder approval, acquire certain mineral claims located in Nye County, Nevada (collectively, the "Property") from Taranis Resources Inc. ("Taranis"), a TSX Venture Exchange listed company incorporated under the laws of British Columbia. As consideration for the Property, the Corporation will pay Taranis C$50,000 in cash and issue 2,000,000 common shares to Taranis. The common shares to be issued to Taranis will be subject to a four month hold period under applicable Canadian securities laws.

The Property consists of 104 contiguous mining claims covering 861 hectares in the Arrowhead Mining District, Nye County, Nevada. Taranis acquired the Property by staking a 100% interest in certain Gordo, Tomahawk, Sidewinder, Stealth and Cruise claims covering the entire Arrowhead Mining District. The Property encompasses an epithermal, volcanic hosted district that was explored and mined in the early 1900's. The Arrowhead Deposit occurs in the center of the Property, and Taranis has found encouraging gold and silver values in this and several other areas of the Property.

Encouraging gold and silver mineralization has been encountered on the Property over a 2.8 km long north-northwest trending structure (Arrowhead Lineament Fault), and includes the Whopper Junior Zone, Ridge Line Area, and the Arrowhead Mine. Core drilling in the Arrowhead Mine area conducted by Taranis identified gold and silver mineralization within highly-altered volcanic rocks. Based on review and interpretation of the Taranis drilling, this zone plunges shallowly to the southeast and remains open along strike.

Hole No. Au Ag Thickness (meters)(i) Includes
(g/ (g/
tonne) tonne)
N-7 1.45 414.2 6.10 (+1.8 m) 3.97 g/t Au +
1,248.5 g/t Ag / 0.70 m
N-11 2.14 304.8 3.10 (+Greater than 3 m) 8.64 g/t Au +
1,369.5 g/t Ag / 0.60 m
N-25 1.01 243.1 1.80 (+1.8 m) 2.46 g/t Au +
603.5 g/t Ag / 1.13 m
N-27 1.75 540.8 1.40 1.75 g/t Au +
653.0 g/t Ag / 1.13 m
N-28 1.25 323.7 4.82 (+1.8 m) 7.67 g/t Au +
2,053.0 g/t Ag / 0.55 m
(i) - intercepts are true thickness - the bracketed intervals are mined-
out areas of high-grade material of unknown grade.

Portions of the Property are the subject of a National Instrument 43-101 technical report dated January 9, 2003 entitled "An Evaluation of the Needles Gold-Silver Property, Nye County, Nevada, USA" by DeMatties & Munroe, Geological-Geophysical Consultants, which has been filed under Taranis' profile on SEDAR and is available at www.sedar.com.

This press release has been reviewed by John Gardiner, Qualified Person and the Chief Executive Officer of Taranis. The handling and preparation of the samples have been completed by Taranis in accordance with the standards of National Instrument 43-101 - Standards of Disclosure for Mineral Projects.

Under the terms of the proposed Transaction, Taranis shall retain a 2.0% net smelter return royalty to be calculated and paid pursuant to provisions to be agreed between the parties in the definitive purchase agreement in respect of the Transaction. In the event the Corporation completes any other business deal on the Property, Taranis' 2% net smelter return royalty will not be affected and shall remain in effect on the Property. The directors, officers, affiliates and associates of Taranis currently own an aggregate of 450,000 common shares of the Corporation.

In addition, the Corporation will assume all land payments to Nye County and Bureau of Land Management to keep the Property in good standing and will assume a bond for environmental reclamation currently filed with the Bureau of Land Management. All drill sites by Taranis on the Property have been reclaimed, with the exception of hole N-51, for which reclamation costs will be assumed by the Corporation.

Completion of the Transaction is subject to the successful completion of approximately C$600,000 in equity financing by the Corporation (the "Financing"). The Financing will consist of the non-brokered private placement of approximately 4,000,000 units of the Corporation (the "Units") at a price of $0.15 per Unit, each Unit consisting of one common share and one common share purchase warrant (a "Warrant") of the Corporation. Each Warrant will entitle the holder to acquire one common share at a price of $0.25 per share for a period of two years from issuance. The proceeds from the Financing will be used to conduct a recommended $250,000 exploration program on the Property and for working capital purposes.

No change in the directors or senior officers of the Corporation will occur as a result of the Transaction. Upon completion of the Transaction, the directors of the Corporation will be continue to be Edwin Bergsteinsson, Jack Besmargian, Gary Freeman, Tony Garson and Dianne Szigety. Gary Freeman will continue in his capacity as President and Chief Executive Officer of the Corporation.

In connection with the Transaction, the Corporation proposes to change its name to "Excalibur Resources" or a similar name as may be approved by the Corporation's shareholders (the "Name Change"), and will discontinue its current business and sell all of the assets used to operate its current business. The transaction and terms and conditions pursuant to which the Corporation will sell its assets remain to be determined.

The completion of the Transaction is subject to the approval of the TSX Venture Exchange and all other necessary regulatory approval. The completion of the Transaction is also subject to additional conditions precedent, including the completion of the Financing, execution by the Corporation and Taranis of a definitive purchase agreement, delivery to the Corporation if required of a current technical report on the Property prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects and a title opinion prepared by qualified Nevada legal counsel with respect to Taranis' title to its interests in the Property and approval of the Corporation's shareholders.

The Corporation intends to call a special meeting of its shareholders to be held on or about July 28, 2006. At the meeting, shareholders will be asked to approve the Transaction and the Name Change, as will be set out in the Corporation's information circular to be prepared and sent to shareholders in connection with the meeting.

On behalf of the Board of Directors:

Edwin Bergsteinsson, Chairman

Completion of the Transaction is subject to a number of conditions, including Exchange acceptance and disinterested shareholder approval. 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 of the Corporation 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 the Corporation should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • DiscFactories Corporation
    Edwin Bergsteinsson
    (604) 681-2961
    (604) 601-8224 (FAX)