Linear Gold Corp.

Linear Gold Corp.

May 28, 2009 08:44 ET

Linear Gold Responds to Santa Fe Action

HALIFAX, NOVA SCOTIA--(Marketwire - May 28, 2009) - Linear Gold Corp. (TSX:LRR) ("Linear") has been informed that Santa Fe Metals Corp. ("Santa Fe") has commenced an action against GLR Resources Inc. ("GLR") and Linear in connection with Linear's acquisition of the Goldfields Project.

On April 17, 2009, Linear and GLR signed a binding term sheet ("the "Original Agreement") providing the terms under which Linear would be entitled to acquire GLR's Goldfields Project. The terms included the right for Linear to match any superior offer received by GLR and confirmed by an independent third party acceptable to GLR and Linear.

On May 15, 2009, the Nova Scotia Supreme Court recognized Linear's contractual rights and granted Linear interim injunctive relief to restrain GLR from proceeding with an allegedly superior offer to acquire GLR's Goldfields Project.

Following the issuance of the interim injunction, on May 25, 2009, Linear and GLR signed a definitive Purchase and Sale Agreement ("Definitive Agreement"). The Definitive Agreement maintains and reflects Linear's rights under the Original Agreement. Under the Definitive Agreement, Linear will acquire a 100% interest in the Goldfields Project, located near Uranium City, Saskatchewan, Canada. The Definitive Agreement included a representation from GLR that it was authorized to complete the contemplated transaction and that the completion of the transaction would not result in the violation or breach of any other agreement.

Linear plans to close the Definitive Agreement and will vigorously enforce its' contractual right including seeking damages and appropriate remedies from any person, including Santa Fe, that seeks to undermine its' legal entitlement to acquire the Goldfields Project.

Throughout discussions and negotiations with GLR that commenced in March 2009, Linear has conducted itself with the utmost integrity and acted in good faith in all dealings with respect to the acquisition of the Goldfields Project.

Contact Information

  • Linear Gold Corp.
    Wade K. Dawe
    President and Chief Executive Officer
    (902) 422-1421