Majescor Resources Inc.

Majescor Resources Inc.

January 27, 2010 09:00 ET

Majescor Resources to Acquire SIMACT Alliance Copper Gold Inc.

MONTREAL, QUEBEC--(Marketwire - Jan. 27, 2010) - Majescor Resources Inc. ("Majescor" or the "Company") (TSX VENTURE:MJX) is pleased to report that it will exercise its option to acquire all of the remaining issued and outstanding common shares of SIMACT Alliance Copper Gold Inc. ("SACG") as per the Agreement executed on April 22, 2009 between all the parties involved (the "Acquisition") (see Majescor's Press Release dated April 23, 2009). Majescor currently holds 10% of SACG's shares. SACG in turn holds title to 68.7% of all the issued and outstanding shares of SOMINE SA, a company incorporated under the laws of the Republic of Haiti. SOMINE SA's principal asset is its 100%-owned SOMINE copper-gold Property, located in the North-East mineral district of Haiti.

Majescor, having met all the conditions stipulated under the Agreement, advised SACG on January 26, 2010 of its intention to exercise its option. Under the terms of the Acquisition, the shareholders of SACG, excluding Majescor, will receive 10,000,000 common shares of Majescor to be issued at a price of $0.30 per share. The closing of the Acquisition shall be subject to certain conditions including, but not limited to, the receipt of all required regulatory approvals, shareholder approval if required, and the completion of a minimum financing of $3,500,000 (the "Offering"), for which the terms will be announced shortly. The funds raised pursuant to the Offering will be used to fund the 2010 exploration program on the SOMINE Property based on the recommendations set forth in the NI 43-101 Technical Report (see below), as well as for the Company's general working capital.

Following the Acquisition, but not taking into account the above-mentioned financing or the SOMINE SA debt settlement stated further below, Majescor will have approximately 28.3 million shares issued and outstanding. Current Majescor shareholders will own approximately 57.6% and SACG shareholders will own approximately 42.4% of the issued and outstanding shares of Majescor. Following the completion of all the transactions noted above, SIMACT Mining Holding Inc., a private US company headed by Haitian-American developers, will become an insider of the Company.

The Acquisition has been approved by all the Directors of Majescor, with the exception of Mr. André Audet, Chairman of Majescor, who declared his interest as a Director and shareholder of SACG and as such, did not participate in the vote.

NI 43-101 Technical Report and Opinion of Value

In support of the Acquisition, Majescor has filed with the TSX Venture Exchange ("TSX-V") both a NI 43-101 Technical Report (the "Report") and an Opinion of Value on the SOMINE Property. C. Tucker Barrie, Ph.D., P.Geo., of C. T. Barrie and Associates Inc. authored the Report. In his conclusion, Mr. Barrie states that: "The SOMINE property covers favourable volcanic and intrusive rocks of the Massif du Nord sub-terrane, and contains three prospects: the Blondin and Douvray porphyry copper deposits and the Faille B quartz vein gold prospect. There is strong evidence that the porphyry copper mineralization continues past the areas previously drilled adjacent to the Douvray deposit, and that all three prospects are favourable for definition and expansion of base and precious metal resources."

Mr. Barrie further states that: "The SOMINE property also presents an opportunity to explore prospective terrane for porphyry copper quartz vein gold deposits using standard geological, geochemical and geophysical methods, initially by extending exploration from known mineralization. Previous exploration on the property indicates that induced polarization ("IP") methods can detect significant chargeability anomalies in this favourable volcanic arc terrane. Majescor should use further ground IP, rock chip and soil geochemical surveys to cover much of the property." On the basis of the above, Mr. Barrie recommends a Phase I exploration program estimated at $1.2 million and comprising the following: Re-establishing of an exploration camp; extending surface grids; continued soil and rock chip sampling on grids; ground IP surveys on the grids in areas not previously surveyed; a 3,500 m – 15 hole drill core drilling campaign; as well as initial environmental baseline studies for subsurface and surface groundwater, noise and dust levels, and year-round weather conditions. The Report will be filed on SEDAR shortly ( 

The Opinion of Value for the SOMINE property was authored by Stew Fumerton, Ph.D., P.Geo., of Stew Fumerton Consulting Ltd. The Opinion of Value was prepared in accordance with TSX-V regulations concerning valuations of mineral properties and with reference to the CIMVal code. Using the Comparable Transactions approach, Mr. Fumerton is of the opinion that the SOMINE Property in 'fair market transactions' would have a value in the $2.1 million to $12.2 million range, with an average value of $5.1 million. Using the Modified Appraised Value method, the historical cost valuation of the SOMINE Property is estimated at $4.8 million while the replacement value of the effective work on the property is estimated to be $4.4 million. Mr. Fumerton comments that the latter value is probably conservative as there is no valuation put on prospecting, gridding, geological mapping and trenching, nor on the drill programs carried out by the United Nations Development Program and the Bundesanstalt für Geowissenschaften und Rohstoffe of Germany prior to 1995.

SOMINE Property

The SOMINE Property consists of a Research Permit covering 50 km2, the mineral rights and obligations of which have been assigned under a Mining Convention executed with the State of Haiti on May 5, 2005 and valid until March 9, 2020. SACG has also carried-out systematic soil sampling and prospecting work over four Prospecting Permits encompassing four 100 km2 areas lying to the East, South and Southeast of the Research Permit subject to the Mining Convention. SACG has requested the conversion of the Prospecting Permits into Research Permits (50 km2 each) and has filed all technical and source documents in support of its application with the Haitian Bureau of Mines and Energy.

Work on the SOMINE Property in 2009, including 935 m of core drilling on the Faille-B gold prospect, has resulted to date in the outlining of a 10 km long by up to 3.8 km wide copper-bearing corridor defined by historical regional stream sediment, soil and rock geochemistry data (see Majescor Press Release dated July 7, 2009). This northwest-trending corridor not only holds the historical Blondin and Douvray copper-gold prospects, the historical Faille-B gold prospect, as well as a series of historical copper occurrences at Dos Rada, but also over one hundred new copper showings in outcrop. Complete analytical results received for prospecting work carried out on a couple of these showings (total 127 samples) have returned gold assays ranging from < 2 ppb Au up to 71.3 g/t Au indicating that the SOMINE Property has a significant potential not only for copper but also for precious metals (see Majescor's Press Release dated November 5, 2009). The results from the drill program on Faille-B are expected at the end of January. A map showing the location of the corridor and the various prospects and showings is available on the Company's website at

The Agreement

The terms of the April 22, 2009 Agreement with SACG and its shareholders can be summarized as follows:

  1. Majescor was to acquire from the shareholders of SACG 10% of all the issued and outstanding common shares of SACG, the whole in consideration of the issuance to all SACG shareholders, on a proportionate basis, of 2,000,000 treasury common shares of Majescor. This transaction was completed on May 26, 2009.

  2. Concurrently with the initial acquisition, Majescor was granted an option (the "Option"), the whole in consideration of an option payment of $200,000 to SACG and the carrying out by Majescor of $600,000 in exploration work and other related expenses on the SOMINE Property within 8 months following the execution of the Agreement, to purchase all the remaining SACG shares held by the current SACG shareholders, in consideration for the issuance of 10,000,000 treasury common shares of Majescor to all SACG shareholders on a proportionate basis, excluding Majescor. This Option, which was also subject to complete and satisfactory due diligence, was to be exercised by Majescor within 12 months from the date of execution of the Agreement.

  3. Furthermore, in the event that within a period of two years following the exercise of the Option, a NI 43-101 Technical Report prepared by an independent reputable engineering or geological consulting firm determines indicated mineral resources on the SOMINE Property to be between 1,000,000 and 2,000,000 ounces of gold, or its equivalent in copper, Majescor shall, within 30 days of the report, issue an additional 3,000,000 treasury common shares to current SACG shareholders, excluding Majescor. In the event that the indicated mineral resources on the SOMINE Property are determined by such Report to be equal to or greater than 2,000,000 ounces of gold or its equivalent in copper, Majescor shall, within 30 days of the Report and in addition to the 3,000,000 common shares mentioned hereinabove, issue another 3,000,000 treasury common shares to current SACG shareholders, excluding Majescor.

As at September 30, 2009 (as per unaudited annual financial statements), SIMACT had approximately $8.7 million in mining properties and deferred exploration expenses, $45,000 in current assets, $72,000 in current liabilities and $461,000 in long-term liabilities. The latter consists of an outstanding debt of US$ 302,000 (the "Debt") from a creditor of SOMINE SA (the "Creditor"), as well as a debt of US$123,750 due to a former Officer of SOMINE SA and payable at the commencement of the commercial production on the SOMINE property. Majescor has signed a Memorandum of Understanding with the Creditor to settle the Debt in exchange for treasury common shares of Majescor to be issued at a price of $0.29 per share. The settlement of the Debt is subject to certain conditions, including regulatory approval, the closing of the Acquisition and the conversion of the Debt into voting shares of SOMINE SA for the benefit of Majescor.

In other news, Majescor announces that it will issue 544,774 common shares of the Company at a deemed price of $0.292 per share, for a total of $159,074, to Société d'investissement dans la diversification de l'exploration ("SIDEX Limited Partnership") as consideration for the interest ($9,074) and in payment of the debenture ($150,000) due as of January 25, 2010, pursuant to the private placement of unsecured convertible debenture of $150,000 to SIDEX Limited partnership on January 25, 2007. The debenture bears interest at the rate of 12% per annum, payable semi-annually either in cash or in shares. The common shares issued to SIDEX Limited Partnership are subject to the approval of the TSX Venture Exchange and to a four-month hold period.

The Company is also undertaking a review of its management structure and Board of Directors so as to include one or more new administrators with relevant corporate, financial or technical experience. No decision has been made to date in this regard.

This press release has been prepared by Marc-André Bernier, P.Geo, President, CEO and Director of Majescor, acting as the "Qualified Person" for the Company under NI 43-101.

About SIMACT Alliance Copper Gold Inc.

SIMACT Alliance Copper Gold Inc. ("SACG") is a Montreal-based private company headed by a group of Canadian financiers and Haitian-American developers. The alliance aims to promote sustainable mineral development initiatives in Haiti by creating synergies between the Canadian financial and mining communities and the North American Haitian Diaspora.

About Majescor Resources Inc.

Majescor is a junior explorer focusing on emerging mineral districts. Majescor's project portfolio includes two uranium exploration projects in Quebec: Mistassini (100%-owned; under option to Strateco Resources Inc.) and Lac Laparre (100%-owned; under option to Virginia Energy Resources Inc.) In addition to uranium, Majescor owns 100% mineral rights to four gold and base metal properties in Madagascar (under option to Sunridge Gold Corp.)

To find out more about Majescor Resources Inc. (TSX VENTURE:MJX), SIMACT Alliance Copper Gold Inc. and the SOMINE copper-gold Property, please visit our website at

Forward-Looking Statements

This News Release may contain or refer to "forward-looking statements" which reflect Management's expectations regarding the Company's future growth, results of operations, performance and business prospects and opportunities. These statements reflect Management's current beliefs at the time of this news release and are based on information currently available to Management. All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding potential mineralization and reserves, exploration results, and future plans and objectives of Majescor Resources inc., are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Management's expectations are exploration risks detailed herein and from time to time in the filings made by the Company with securities regulators.

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

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