Golden Sunset Trail Inc.
NEX BOARD : GST.H

October 11, 2007 17:15 ET

Golden Sunset Trail Inc. Executes Lock Up Agreement for Brimstone Mining, Inc.

GRIMSBY, ONTARIO--(Marketwire - Oct. 11, 2007) - GOLDEN SUNSET TRAIL INC. ("Golden Sunset") (NEX:GST.H) is pleased to announce that it has entered into a Lock Up Agreement dated April 5, 2007 (the "Lock Up Agreement") with Brimstone Mining, Inc. ("Brimstone") and its shareholders ("Brimstone Shareholders"), being Rovig Minerals, Inc. ("Rovig Minerals") and Jamison and Sullivan Resources, Inc. ("J and S Resources"), pursuant to which Golden Sunset will indirectly acquire 4,500 common shares of Brimstone being 100% of the issued and outstanding voting common stock of Brimstone (the "Brimstone Common Shares"). The Transaction ("Transaction") is intended to qualify as the "Qualifying Transaction" of Golden Sunset, as such term is defined by Policy 2.4 of the TSX Venture Exchange Inc. the ("Exchange") and upon completion of the Transaction the Corporation will conduct the business of Brimstone and be engaged in the mining industry.

The Lock Up Agreement provides that Golden Sunset Trail Montana Inc. ("GST Montana"), a recently incorporated Montana corporation which is a wholly owned subsidiary of Golden Sunset, will acquire all of the issued and outstanding securities of Brimstone from the Brimstone Shareholders in consideration of US$300,000 and 1,310 GST Montana voting common shares (the "Exchange Shares") issued at a deemed price of C$1,500 per share, representing aggregate consideration of C$2,265,000 (based on US dollar exchange rate of US$1.00 = C$1.00). The Exchange Shares will be exchangeable at the option of the holder for common shares of Golden Sunset ("GST Common Shares") on the basis of 10,000 GST Common Shares for one GST Montana Common Share, however, such exchange may only occur if the total number of GST Common Shares issuable pursuant to the Exchange Shares is less than 50% of the total number of GST Common Shares issued and outstanding at the time of the exchange.

The closing of the Transaction is subject to the completion of due diligence on behalf of Golden Sunset, Brimstone and the Brimstone Shareholders. The due diligence has been completed. The Transaction is also subject to regulatory and, if required, shareholder approval pursuant to Policy 2.4 of the Exchange. The Transaction is an arm's length transaction.

Brimstone

Brimstone is a Montana, USA, corporation which was incorporated on January 31, 1996. Brimstone is currently owned by Rovig Minerals and J and S Resources. Rovig Minerals is a Montana corporation controlled by David Rovig, a Montana resident. J and S Resources is a Washington, DC corporation controlled by Delos Cy Jamison, a Washington, DC resident and Jay Sullivan, a Washington, DC resident.

Brimstone originally conducted the business of identifying and evaluating opportunities for the acquisition of an interest in mineral exploration and development properties and in 1996 Brimstone acquired a 98.9% equity interest in Mayflower Mining Company and a 96.8% equity interest in West Mayflower Mining Company which collectively hold 11 patented claims on approximately 130 acres of land located near Whitehall, Montana. The claims are collectively referred to as the Mayflower Mine. Brimstone also holds unpatented and other claims located in proximity to the Mayflower Mine and owns various personal property assets utilized in the mining industry, also located at the Mayflower Mine. From 1996 to 1999 Brimstone completed an extensive rehabilitation of the Mayflower Mine including the construction of a power substation, rebuilt the head frame and hoist, rehabilitated the shaft and installed pumping systems, and completed development work and exploration drilling. Reserve information for the Mayflower Mine will be released in a subsequent press release. As a result of a drop in the commodity markets no further development work was undertaken on the Mayflower Mine from 1999 to 2004.

The financial statements for the year ended April 1, 2007 and the 3 months ended July 31, 2007 for Brimstone have been prepared using US GAAP and are currently being reconciled to Canadian GAAP. The Brimstone summary financial information will be released once this reconciliation is completed.

Private Placement

Concurrent with the closing of the Transaction, Golden Sunset will complete a non-brokered private placement ("Private Placement") of a minimum of 7,333,333 GST Common Shares at the price of $0.15 per share for gross proceeds of $1,100,000. The proceeds of the Private Placement will be used to fund the cash consideration of the Transaction and for working capital.

Management of Resulting Issuer

Upon completion of the Transaction, it is anticipated that Daniel Donn, Lynn Patrick and Ian Carwardine will be joined on the Board of Directors by David Rovig, a principal of Brimstone.

Daniel Donn, President, Chief Executive Officer and Director (Grimsby, Ontario)

Mr. Donn served in various capacities with Mosaic Mapping Corporation (formerly Londonderrie Trail Inc.) from February 2002 until September 2003. From March 2000 until April 2003, Mr. Donn has served in various capacities with Innovative Water & Sewer Systems Inc. (formerly Red Oak Trail Corp.), a water and waste management company listed on the Exchange. From December 1995 until April 2004, Mr. Donn served as President of Dionne Inc., a private investment company which carries on business in Ontario. Mr. Donn was a consultant to Thermo Tech Technologies Inc. from April 2000 to July 2000. From 1997 to 1999, Mr. Donn was the Chief Financial Officer and Co-Editor for the Technology Review Inc., Innogis Technology Inc., an industrial Issuer listed on the Canadian Dealing Network. Mr. Donn also served as Chief Financial Officer, Secretary/Treasurer and director of ATH Fund Inc., a private investment company from 1987 to December 1995.

Ian Carwardine, Director (North Gower, Ontario)

Mr. Carwardine is currently the President of GeoDigital International Inc. Mr. Carwardine served as President, Chief Executive Officer of Mosaic Mapping Corporation from September 2002 until May 2004. Prior thereto, Mr. Carwardine performed senior management functions for Mosaic Mapping Systems Inc. and has experience in operations, product research and development, sales, training and business management. Since 1975, he has gained experience in aviation management from senior positions with an air charter service in the high Arctic, the aviation department of a large oil company and the operations of a flight training school. He has also designed, produced and sold specialized aviation products for international markets. Mr. Carwardine's range of business experience also encompasses financial planning, product analysis and engineering, design of manufacturing process and facilities and establishing operational policies and procedures.

Lynn A. Patrick, Director (Edmonton, Alberta)

Mr. Patrick served as a director of Innovative Water from March 2000 to October 2001. Mr. Patrick also served as Secretary of Innovative Water until the completion of its Qualifying Transaction in August, 2001. Mr. Patrick practiced law with predecessor to firm Cook Duke Cox, which law firm is now known as Miller Thomson, in Edmonton, Alberta until 1983, carrying on a predominantly corporate/commercial practice. He then practiced as corporate counsel firstly with Principal Group and then with Metropolitan Life Insurance Financial Services Group until 1988 with an emphasis on group mutual funds (including establishment of funds and national clearance registration and renewals). He also served as the representative at The Investment Funds Institute of Canada and as chair of the legal and regulatory committee of that body. From 1989 through 1991, Mr. Patrick acted as President of Stuart Olson Construction, a subsidiary of The Churchill Corporation, a company listed on the Toronto Stock Exchange. Subsequently, he acted as Vice-President, Corporate Counsel and Secretary of The Churchill Corporation until January, 1998, his activities concentrating on corporate governance and regulatory compliance for the publicly traded corporation. In January 1998, Mr. Patrick re-entered private practice as Barrister and Solicitor, with a practice concentrating on corporate/commercial law. Currently, Mr. Patrick is a director of Homebank Technologies Inc., which is listed on the Exchange. Mr. Patrick served as a director of SNG Telecom Inc. from June 1998 to August 2001. Mr. Patrick currently serves as Vice-Chair of the Real Estate Council of Alberta, and is a member of the Municipal Government Board of Alberta. In February 2004, Mr. Patrick was appointed a director of OEM Remanufacturing Company Inc. and also served as a director of Matrix Ventures Ltd. He has also served as a director of Woodside Projects Inc. since July 1998 and a director of Milestone Construction Inc. since December 1998.

David Rovig, Director (Billings, Montana)

Mr. Rovig is a professional engineer who has been self employed since November 1993 and has served as the President and Chief Executive Officer of Greystar Resources Inc. since August 1997. Rovig Minerals, which is controlled by Mr. Rovig, will also become a 10% holder of Golden Sunset pursuant to the Exchange Shares to be issued to Rovig Minerals pursuant to the Transaction.

J and S Resources, 10% Shareholder (Billings, Montana)

J and S Resources will become a 10% holder of Golden Sunset pursuant to the Exchange Shares to be issued to J and S Resources pursuant to the Transaction. J and S is controlled by Delos Cy Jamison and Jay Sullivan. Mr. Jamison was formerly the Director of the Bureau of Land Management (USA) and now acts as a consultant in Washington, DC. Mr. Sullivan is a consultant in Washington, DC.

Stock Options

Golden Sunset proposes to grant incentive stock options ("Stock Options") on closing of the Transaction, subject to the approval of the Exchange, to the directors and officers of Golden Sunset. In accordance with the Corporation's stock option plan, the number of options granted will be equal to 10% (ten) of the number of shares issued in the above referenced private placement, with the minimum number of options of 666,667 granted. Golden Sunset hereby reserves the exercise price of $0.15 for the Stock Options.

Conditions Precedent

The Corporation has applied to the Exchange for a waiver of the sponsorship requirement but there is no guarantee that such waiver will be provided. Trading of the GST Shares on the NEX board of the Exchange has been halted since April 2005 and will remain halted until the required conditions of the Exchange are met, including waiver or satisfaction of the sponsorship requirement.

Completion of the Transaction is subject to a number of conditions, including but not limited to, completion of the Private Placement, the financial statements of Brimstone being prepared to the satisfaction of the Corporation and the Exchange, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, 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 or filing statement 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 a capital pool company should be considered highly speculative.

The TSX Venture Exchange has not passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

The TSX Venture Exchange does not accept responsibility for the accuracy or adequacy of this release.

Contact Information

  • Golden Sunset Trail Inc.
    Daniel Donn
    President & CEO and Director
    (905) 945-3999
    Email: danieldonn@cogeco.ca