FRANC-OR RESOURCES CORPORATION
TSX : FOR

FRANC-OR RESOURCES CORPORATION

August 06, 2009 19:26 ET

Franc-Or Resources Corporation and Crocodile Gold Inc. Announce Proposed Reverse Take-Over

TORONTO, ONTARIO--(Marketwire - Aug. 6, 2009) - Franc-Or Resources Corporation ("Franc-Or") (TSX:FOR) and Crocodile Gold Inc. ("Crocodile Gold") are pleased to announce today that they have entered into a binding letter of intent, pursuant to which Franc-Or will acquire all of the issued and outstanding securities of Crocodile Gold (the "Transaction"). It is expected that the Transaction will be effected by way of a three-cornered amalgamation pursuant to which a wholly-owned subsidiary of Franc-Or will amalgamate with Crocodile Gold, and all of the holders of common shares of Crocodile Gold will receive one common share of Franc-Or (on a post-consolidation basis) for each one common share of Crocodile Gold so held. Following completion of the Transaction, the newly amalgamated company, which will hold all of Crocodile Gold's assets, will be a wholly-owned subsidiary of Franc-Or.

Prior to the effective time of the Transaction, Franc-Or will complete a consolidation (the "Consolidation") of its issued and outstanding common shares on the basis of one new Franc-Or common share for each 6.3 existing Franc-Or common shares. Based on the current 71,490,431 issued and outstanding common shares and 20,000,000 preferred shares of Crocodile Gold (on a non-diluted basis) and the current 63,923,664 issued and outstanding common shares of Franc-Or (on a non-diluted basis), the number of common shares of Franc-Or following completion of the Transaction (on a non-diluted basis) is expected to be 101,637,044, with current Crocodile Gold shareholders owning 90.0% of Franc-Or (on a non-diluted basis) and current Franc-Or shareholders owning 10.0% of Franc-Or (on a non-diluted basis).

Crocodile Gold will convene and hold a special meeting of its shareholders (the "Crocodile Gold Meeting") as soon as possible for the purpose of approving the Transaction.

Franc-Or will convene and hold a special meeting of its shareholders for the purpose of approving the issuance of Franc-Or common shares in connection with the Transaction and other matters relating thereto and the Consolidation contemporaneously with the Crocodile Gold Meeting. The meetings are expected to be held in late September 2009.

Pursuant to the terms of the letter of intent, completion of the Transaction will be subject to a number of conditions, including execution of a definitive agreement, completion of satisfactory due diligence and receipt of applicable regulatory and shareholder approvals. There can be no assurance that the Transaction will be completed as proposed or at all. Readers are cautioned that except as disclosed in the joint proxy circular of Franc-Or and Crocodile Gold 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.

Upon completion of the Transaction, it is anticipated that management of Franc-Or will include the persons identified below.

Michael Hoffman, proposed President and Chief Executive Officer and Director, is a professional mining engineer with over 25 years of experience in mine operations, projects, engineering and corporate development. He recently served in senior executive positions at Crowflight Minerals Inc., Goldcorp Inc., Desert Sun Mining Corp. and Yamana Gold Inc. He currently also serves as President and CEO of Kria Resources Inc., a company listed on the TSX Venture. He also serves on the Board of Directors of Castillian Resources Inc., and Largo Resources Inc.

Brad Boland, proposed Chief Financial Officer is a Certified Management Accountant. He was the Chief Financial Officer of Consolidated Thompson Iron Mines Limited until July 30, 2009. From May 2005 to September 2007, he was at Kinross Gold Company, most recently serving in the position of Vice President, Corporate Controller. Prior to that, from August 1998 to February 2005, Mr. Boland was at Goldcorp Inc., as Corporate Controller and the Vice President, Finance.

Grant Davey, proposed Chief Operating Officer is a mining engineer with almost 20 years' experience in the mining industry including senior mine and operational management roles within the AngloGold Ashanti and Anglo American organizations in South Africa and Australia. Mr. Davey has operated mines in the gold, platinum and coal sectors, and also has experience in the mining contracting business. He was previously the Chief Operating Officer of GBS Gold International Inc. ("GBS Gold").

Upon completion of the Transaction, it is anticipated that the board of directors of Franc-Or will include, in addition to Michael Hoffman, the persons identified below.

Stan Bharti has over 25 years of experience in operations, public markets and finance. Over the last ten years Mr. Bharti has been involved in acquiring, restructuring and financing. He is a Professional Mining Engineer and holds a Masters Degree in Engineering from Moscow, Russia and University of London, England. From 2002 to April 2006, Mr. Bharti was a director and past president of Desert Sun Mining Corp. (which was acquired by Yamana Gold Inc. in 2006). In addition, Mr. Bharti is a director of several public and private companies.

Bruce Humphrey is a mining engineer with over 30 years experience with such major companies as Inco, Cominco and Noranda. He served as the President and Chief Executive Officer of Desert Sun Mining Corp. from October 2004 to April 2006 where he contributed to the successful development of the Jacobina Mine in Brazil. From May 1998 to May 2004, Mr. Humphrey served as Senior Vice President and Chief Operating Officer at Goldcorp Inc. during the re-development of its high-grade Red Lake mine. He is a member of the Professional Engineers of Ontario.

Chris Bradbrook has more than 25-year career in the mining industry. Chris has performed principal roles in many aspects of the industry, including exploration, mine development, corporate development work, financial analysis, investor relations and marketing. Most recently, he was President and Chief Executive Officer of New Gold Inc. and prior to that, he was Vice President of Corporate Development for Goldcorp Inc. He is also a director of Rubicon Minerals Corporation.

George Faught is a Chartered Accountant with over 25 years of senior management experience and is currently the President and Chief Executive Officer of Aberdeen International Inc. He has served as the Chief Financial Officer of publicly traded companies in the natural resources, financial services and pharmaceutical industries. Mr. Faught has broad financial management, corporate development and operating experience and from 1999 to 2005 served as the Chief Financial Officer for North American Palladium Ltd., a mid-tier platinum group metal producer. Prior to that, he served as Chief Financial Officer for Hudson Bay Mining & Smelting Co. Ltd., an integrated base metals producer, and William Resources Inc., an international gold producer. He also serves as a director of several public companies in the resource sector.

Greg Cameron Mr. Cameron brings 13 years of deal experience focused on small and mid capitalization companies in North America. Most recently, Greg was a Senior Vice President at Macquarie Capital Markets Canada formerly Orion Securities focused on diversified industries. Mr. Cameron is a graduate of Saint Mary's University in Halifax, Nova Scotia, Canada with a Bachelor of Commerce in Finance and Accounting.

About Crocodile Gold

Crocodile Gold is a private Canadian company that recently completed the acquisition of a number of past producing gold assets in Australia, specifically in the Northern Territory and Western Australia from GBS Gold. These assets are held through its 100% owned subsidiary Crocodile Gold Australia Pty Ltd. The assets comprise the Burnside Project (which includes the Burnside, Union Reefs, Pine Creek, Maud Creek and Moline projects) and the Tom's Gully Gold Project in the Northern Territory (the "Properties"). The Tom's Gully Gold Project includes the Tom's Gully underground gold mine and is located approximately 90 kilometres east of Darwin, Northern Territory. The Burnside Project includes the Brocks Creek underground gold mine, the Chinese South and North Point open pit gold mines and the Cosmos Deep and Maud Creek undeveloped gold deposits, among others.

The following tables provide summaries of the Properties' mineral resource estimates as at May 31, 2009.



MEASURED AND INDICATED MINERAL RESOURCE STATEMENT

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MEASURED MINERAL RESOURCE INDICATED MINERAL RESOURCE
-------------------------------------------------------------------------
Cut- Cut-
off Grade off Grade
Au Au Au Au Au Au
Project Deposit (g/t) Tonnes (g/t) Ounces (g/t) Tonnes (g/t) Ounces
-------------------------------------------------------------------------
Tom's Tom's
Gully Gully 3.65 496,900 11.0 175,100
-------------------------------------------------------------------------
Brocks
Creek(i) 3.0 6,000 17.3 3,400 3.0 47,000 11.1 16,800
----------------------------------------------------------------
Cosmo
Deeps 2.0 4,244,000 4.9 670,000
----------------------------------------------------------------
North
Point(i) 0.7 336,000 1.6 17,700
----------------------------------------------------------------
Princess
Louise 0.7 298,000 1.4 13,300
----------------------------------------------------------------
Rising
Tide 0.7 1,303,000 1.4 59,100
----------------------------------------------------------------
Chinese
Burnside South
Extension(i) 0.7 3,621,000 1.6 184,800
----------------------------------------------------------------
Mottrams(i) 0.7 2,236,000 1.2 87,300
----------------------------------------------------------------
Chinese
1, 2, 3 0.7 3,342,000 1.4 153,300
----------------------------------------------------------------
Big Howley 0.7 299,000 1.5 14,400
----------------------------------------------------------------
Fountain
Head(i) 0.7 336,000 1.7 18,700
----------------------------------------------------------------
Tally Ho(i) 0.7 642,000 2.5 51,500
-------------------------------------------------------------------------
Union Prospect
Reefs Claim 0.6 251,000 2.7 21,800
-------------------------------------------------------------------------
Pine
Creek Czarina 1.0 1,202,000 1.8 69,600
-------------------------------------------------------------------------
Maud
Creek Maud Creek 1.0 9,288,000 3.1 935,000
-------------------------------------------------------------------------
TOTAL 6,000 17.3 3,400 27,941,900 2.8 2,488,400
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Note: (i) Depleted for mining as at May 31, 2009


INFERRED MINERAL RESOURCE STATEMENT

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INFERRED MINERAL RESOURCE
-------------------------------------------------------------------------
Cut-off Cut-off
Project Deposit Au (g/t) Tonnes Au (g/t) Au Ounces
-------------------------------------------------------------------------
Tom's Gully Tom's Gully 3.65 184,400 11.4 67,500
-------------------------------------------------------------------------
Brocks Creek(i) 3.0 73,000 9.1 21,300
------------------------------------------------------------
Cosmo Deeps 2.0 4,503,000 3.9 570,000
------------------------------------------------------------
North Point(i) 0.7 452,000 1.4 20,900
------------------------------------------------------------
Princess Louise 0.7 381,000 1.1 13,000
------------------------------------------------------------
Rising Tide 0.7 885,000 1.3 37,800
------------------------------------------------------------
Chinese South
Extension(i) 0.7 1,579,000 1.3 65,000
------------------------------------------------------------
Mottrams(i) 0.7 574,000 1.1 20,900
------------------------------------------------------------
Chinese 1, 2, 3 0.7 1,979,000 1.4 88,800
------------------------------------------------------------
Burnside Big Howley 0.7 348,000 1.8 19,800
------------------------------------------------------------
Fountain Head(i) 0.7 316,000 1.8 18,500
------------------------------------------------------------
Tally Ho(i) 0.7 260,000 2.9 24,300
------------------------------------------------------------
Kazi 1.0 676,000 2.9 63,200
------------------------------------------------------------
Western Arm 1.0 1,790,000 1.4 80,600
------------------------------------------------------------
Bridge Creek 1.0 1,038,000 1.6 53,400
------------------------------------------------------------
Bon's Rush 0.7 540,000 2.5 43,400
------------------------------------------------------------
Low-Grade Stockpiles NA 235,000 0.9 6,800
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Prospect Claim 0.6 3,000 1.9 200
Union Reefs ------------------------------------------------------------
Esmeralda 0.7 1,550,000 1.8 89,700
-------------------------------------------------------------------------
Pine Creek Czarina 1.0 642,000 1.5 31,000
-------------------------------------------------------------------------
Cox's 0.5 533,000 1.4 24,000
------------------------------------------------------------
South Czarina 0.5 170,000 1.5 8,200
------------------------------------------------------------
Enterprise 0.5 1,241,000 2.6 103,700
------------------------------------------------------------
South Enterprise 0.5 165,000 3.0 15,900
------------------------------------------------------------
North Gandys 0.5 163,000 2.8 14,700
------------------------------------------------------------
International 0.5 1,141,000 1.7 62,400
------------------------------------------------------------
Kohinoor 0.5 261,000 2.6 21,800
-------------------------------------------------------------------------
Maud Creek Maud Creek 1.0 1,072,000 2.4 82,000
-------------------------------------------------------------------------
TOTAL 22,754,400 2.3 1,668,800
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Note: (i) Depleted for mining as at May 31, 2009


Alfred John Gillman of Odessa Resources Pty Ltd. and Fleur Louise Muller of Geostat Services Pty Ltd. are the "qualified persons" (as such term is defined in National Instrument 43-101) responsible for the mineral resource estimate for the Tom's Gully Gold Project and each is independent of Crocodile Gold. Michael Charles Andrew of Snowden Mining Industry Consultants is the "qualified person" (as such term is defined in National Instrument 43-101) responsible for the mineral resources estimate for the Burnside, Union Reefs, Pine Creek and Maud Creek projects and he is independent of Crocodile Gold.

Mr. Gillman and Mrs. Muller are not aware of any known environmental, permitting, legal, title, taxation, socio-political or marketing issues affecting the mineral resource estimate for the Tom's Gully Gold Project. Mr. Andrew is not aware of any known permitting, legal, title, taxation, socio-political or marketing issues affecting the mineral resource estimate for the Burnside Project; however, certain operations in the Burnside, Union Reefs, Pine Creek and Maud Creek projects may pose environmental concerns in the future.

The following table provides a summary of the Properties' mineral reserves estimates as at May 31, 2009.



MINERAL RESERVE STATEMENT

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PROBABLE MINERAL RESERVE
-------------------------------------------------------------------------
Cut-
off Contained Recovered
Au Grade Ounces Mill Ounces
Project Deposit (g/t) Tonnes (g/t) Au Recovery Au
-------------------------------------------------------------------------
Tom's Tom's
Gully Gully
U/G Mine 7.0 370,000 8.3 99,000 82% 80,000
-------------------------------------------------------------------------
Brocks
Creek U/G
Mine(i) 7.1 68,000 7.4 16,000 95% 15,000
-------------------------------------------------------------
Cosmo Deeps 3.2 2,200,000 5.0 350,000 95% 320,000
-------------------------------------------------------------
Burnside Chinese
South Ext-
ension(i) 1.4 1,000,000 2.1 68,000 90% 62,000
-------------------------------------------------------------
North
Point(i) 1.3 180,000 2.1 12,000 90% 11,000
-------------------------------------------------------------------------
TOTAL 3,818,000 545,000 488,000
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Mineral Resources that are not Mineral Reserves do not have demonstrated
economic viability
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Gold Price: $US775/oz
$A:$US 0.80
-------------------------------------------------------------------------


Heath Gerritsen of HG Mine Design Pty Ltd. is the "qualified person" (as such term is defined in National Instrument 43-101) responsible for the mineral reserves estimate for the Properties and he is independent of Crocodile Gold.

No new exploration has been conducted on the Properties on behalf of Crocodile Gold which would have generated any new data verification. All data reviewed during the preparation of the above estimates was historically generated by GBS Gold or generated from databases historically managed by GBS Gold. GBS Gold utilized specialized industry computer software to manage its drillhole and assay database and employed dedicated personnel to manage the database and apply appropriate QA/QC procedures to maintain the integrity of the data.

Crocodile Gold has retained Odessa Resources Pty Ltd., Geostat Services Pty Ltd., Snowden Mining Industry Consultants and HG Mine Design Pty Ltd. to prepare a National Instrument 43-101 compliant technical report on the Properties.

About Franc-Or

Franc-Or Resources Corporation is a publicly traded mineral exploration company dedicated to the exploration of precious and base metals. The Corporation currently holds 100% interests in two mineral exploration properties, the Mario property (Zn, Pb, Ag, Au) in central Peru, and the Humboldt Springs property (Au, Ag) in north-central Nevada.

Cautionary Note

Certain information set forth in this press release contains "forward-looking statements", and "forward-looking information under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements which include management's assessment of Crocodile Gold's future plans and operations and are based on Crocodile Gold's current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. Some of the forward-looking statements may be identified by words such as "expects" "anticipates", "believes", "projects", "plans", and similar expressions. These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Crocodile Gold's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: liabilities inherent in mine development and production; geological, mining and processing technical problems; Crocodile Gold's inability to obtain required mine licenses, mine permits and regulatory approvals required in connection with mining and mineral processing operations; competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; changes in commodity prices and exchange rates; currency and interest rate fluctuations; various events which could disrupt operations and/or the transportation of mineral products, including labour stoppages and severe weather conditions; the demand for and availability of rail, port and other transportation services; and management's ability to anticipate and manage the foregoing factors and risks. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Crocodile Gold undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Crocodile Gold Inc.
    Michael Hoffman
    President and CEO
    (416) 861-2964
    or
    Franc-Or Resources Corporation
    G. Scott Moore
    President and CEO
    (416) 861-5903