Gleichen Resources Limited
TSX VENTURE : GRL

August 06, 2009 16:30 ET

Gleichen Announces Proposed Acquisition of 78.8% of Morelos Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 6, 2009) -

NOT FOR DISTRIBUTION OR TRANSMISSION BY ANY MEANS INTO THE UNITED STATES

Gleichen Resources Ltd. ("Gleichen" or the "Company") (TSX VENTURE:GRL) is pleased to announce it has entered into an agreement dated August 6, 2009 to acquire 78.8% of the Morelos Project from Teck Resources Ltd. ("Teck") (TSX:TCK.B) via the acquisition of Oroteck Mexico S.A. de C.V. ("Oroteck") from Teck's subsidiaries Teck Metals Ltd. and Teck Exploration Ltd., for a purchase price of US$150 million and a 4.9% stake in Gleichen post financing. Oroteck owns 78.8% Series A shares in the capital of Minera Media Luna S.A. de C.V., holder of the concessions comprising the Morelos Project.

The Morelos Project is an advanced stage gold exploration property located in the state of Guerrero, approximately 180 km to the southwest of Mexico City. The Morelos Project consists of a group of 7 claims, totalling 29,046 hectares (ha). Teck is the operator of the Morelos Project in a joint venture with Goldcorp Inc. Teck owns a 78.8% interest in the Morelos Project, with Goldcorp Inc. owning the remaining 21.2%. For details of the property please refer to Teck's 2008 AIF.

Michael Murphy, President & CEO of Gleichen, stated that: "Gleichen is delighted with having been chosen as the successful bidder for the high quality Morelos asset. The transaction will transform Gleichen into a significant gold company. We look forward to working with the community and leadership to successfully develop the Morelos Project."

As a result of this company-changing transaction, Gleichen will adjust its board and add several senior and experienced mining individuals with executive, corporate and board experience. Mr. Terry MacGibbon has been assisting Gleichen during the bidding process and pending successful closing of the acquisition of Morelos, will join the Gleichen board. Mr. MacGibbon is the Chairman, President and Chief Executive Officer of FNX Mining Company Inc. (TSX:FNX). In addition, Gleichen has recruited a number of highly skilled and experienced senior management persons with exploration, engineering, and operating expertise.

Closing of the transaction is expected in the fourth quarter. Closing is subject to receipt of all required shareholder, regulatory and third party consents, satisfaction of customary closing conditions and the completion by Gleichen of a financing to raise minimum gross proceeds of US$175 million. It is expected that the financing will proceed by way of a best efforts private placement of subscription receipts. Further details of the financing will be provided once determined.

Macquarie Capital Markets Canada Ltd. and Jones Gable & Company Limited acted as financial advisors to Gleichen, and Cassels Brock and Blackwell LLP acted as legal advisor to Gleichen.

Gleichen is actively engaged in the acquisition of mineral properties and has built a senior management team that provides expertise in project evaluation, acquisition, exploration, development and operations. We aim to create shareholder value through the strategic acquisition, exploration and development of profitable mineral properties in a manner that is consistent with best practice in environmental stewardship, safety and stakeholder engagement.

ON BEHALF OF THE BOARD OF DIRECTORS OF GLEICHEN RESOURCES LTD.

Michael Murphy, Director, President and CEO

Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Gleichen Resources Ltd.
    Mr. Michael Murphy
    Director, President and CEO
    604-687-3100