Parlane Resource Corp.

Parlane Resource Corp.

November 05, 2009 09:00 ET

Parlane Enters Into Agreements to Acquire Mexican Properties

Acquisition will constitute Parlane's Qualifying Transaction

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 5, 2009) - Parlane Resource Corp. ("Parlane" or the "Company") (TSX VENTURE:PPP.P) announces that on October 26, 2009 it entered into agreements (the "Agreements") with Minera Zeppy S.A. de C.V. ("Zeppy") and Jose Agustin Garcia Garcia ("Garcia") whereby Parlane can acquire a 90% interest in various mining concessions owned by Zeppy and Garcia in Mexico (the "Proposed Acquisition") more commonly known as the Chacala Properties. Parlane is a capital pool company listed on the TSX Venture Exchange (the "Exchange") under the trading symbol "PPP.P". Zeppy is a private company incorporated in Culiacan, Mexico, and is controlled as to 46.5% by Garcia, with other Mexican shareholders, including Manuel Beltran Meza who controls 37% of Zeppy. Garcia is a resident of Mexico. Zeppy, Garcia and all other shareholders of Zeppy operate at arm's length with Parlane.

The Proposed Acquisition consists of various mining concessions covering a surface area of over 11,450 hectares situated in Durango, Mexico (the "Properties"). The Vendors of the Properties have reportedly spent approximately US$300,000 on geological and topographical studies covering the Chacala Properties. These expenses have not been audited.

Pursuant to the Agreement, Parlane has until December 15, 2009 to review the geological and technical information in respect of the Properties (the "Review Period") and to obtain TSX approval of the proposed transaction.

In consideration of the Proposed Acquisition and to acquire the 90% interest in the Properties (subject to existing underlying royalty entitlements), Parlane will do the following, subject to regulatory approvals:

To Zeppy:

  1. make cash payments in the aggregate amount of US$1,250,000 over a period of 18 months;
  2. issue a total of 3,320,000 common shares of Parlane to Zeppy; and
  3. incur an aggregate of US$8,300,000 over an exploration period to be mutually agreed upon.

To Garcia:

  1. make a cash payment in the amount of US$250,000 within 6 months after receipt of regulatory approval;
  2. issue a total of 680,000 common shares of Parlane to Garcia; and
  3. incur an aggregate of US$1,700,000 over an exploration period to be mutually agreed upon.

Certain concessions are subject to a 3% net smelter royalty.

After completion of the Proposed Acquisition, Parlane shall have the right of first refusal on all mineral properties owned by Zeppy and Garcia or mineral properties offered to Zeppy and Garcia by third parties.

Parlane is a capital pool company and the Proposed Acquisition will constitute its Qualifying Transaction (as such term is defined in the policies of the Exchange). The Proposed Acquisition is an arm's length transaction and upon completion of the Proposed Acquisition, Parlane expects to be a Tier 2 Mineral Exploration Issuer. No Non-Arm's Length Party (as defined in the policies of the Exchange) to the CPC has any direct or indirect beneficial interest in the Properties.

Summary of the Target's Significant Assets

The Properties are located in Durango State, Mexico and comprise 13 mineral claims covering over approximately 11,450 hectares with known silver-gold mineralization. The Properties are situated in the metallogenic Au-Ag belt of the NW Sierra Madre Occidental famous for hosting deposits such as Dolores, Mulatos, Moris, Topia, La Cienega, Basis, Santa Matia del Oro, Guadelupe de los Reyes, Rosario (Plomosa mine), San Dimas, and Toyalita.

Regional geology is underlain by Jurassic basement rocks overlained by andesitic Triassic andesitic volcaniclastic and dacitic volcanic sequences subsequently overlain by younger Tertiary rock formations. The above mentioned rock units were intruded by the Cretaceous granodiorite and andesite intrusions. The Properties are considered to be a Ag-Au epithermal vein target. It is possible that in some locations mineralization could also form mantos and disseminated ore bodies.

Mineralization on the Properties is principally structurally controlled and mainly hosted in intrusive rocks and less commonly in andesite volcanics and metasediments.

To date, there have been four distinct exploration targets identified on the Properties. There have been no modern surface exploration programs carried out on the Properties and none of the targets have been drill tested.

Candelaria Target
The Candelaria target is over 800m long. Only 100m of the total strike length of this target was explored through underground workings and to a depth of less than 80m. Recent trenching by Zeppy exposed a southwestern extension of the Candelaria vein and extended the Candelaria structure to the SW for an approximate additional 700m. The explored structure appears to be forming an approximate 15m zone with several sub-parallel veins locally up to 2m wide.

San Juan and El Oro Targets
The San Juan and El Oro targets are possibly controlled by the same structure, but there is no proof that the two mines/structures connect. The combined length of El Oro and San Juan structures can be presently estimated at approximately 300m. The San Juan structure has a historical production of silver and gold extracted from 4 mining levels and the mining activity was suspended in 1990 approximately.

At the El Oro target there is a possibility of existence of several mineralized structures sub-parallel to the main El Oro vein.

Otatal Target
The Otatal target forms a prominent and up to approximately 8m wide siliceous structure.

A hilly topography and probably thin overburden make Otatal a relatively easy target for exploration.

NortenaTarget
The Nortena mineralization appears to be controlled by structures cross cutting conglomerates and breccias. It is possible that the mineralized structures cross cut the clastic (or brecciated) host rock and form a disseminated low-grade mineralization or mantos. In some upper parts of the Nortena property, visible extensive gossans indicate the presence of the disseminated sulphides in rock. The presence of several underground workings and mining dumps indicate past production and presence of mineralization on this target.

The Company has retained David Gunning P. Eng. and Piotr Lutynski, P.Eng. to complete a 43-101 report on the Properties. Gunning and Lutynski are the Qualified Persons as defined by National Instrument 43-101 for the project discussed above and they have reviewed and approved the contents of this release.

Finder's Fee

In connection with the Proposed Acquisition, a finder's fee will be payable in amounts and in accordance with Exchange policies.

Financing

No concurrent financing is involved with this proposed transaction.

Board of Directors and Management of the Resulting Issuer

Upon closing of the transaction, it is contemplated that the current directors will remain on the board, namely Robert Eadie, Gary Arca, Ken Sumanik and Kent Kirby. It is further contemplated that Robert Eadie will remain president and chief executive officer and Gary Arca will remain chief financial officer. Further information for each of the above-mentioned directors and officers is set out below.

Robert Eadie, President & Chief Executive Officer and Director

Mr. Eadie is a self-employed business owner and has many years of experience in working with and helping build start-up companies. He began his career as a corporate investor and public relations consultant and went on to establish his own investor relations consulting business. He has since become a manager, officer or director of a number of junior public companies, primarily in the natural resource sector. Mr. Eadie is currently President and CEO of Starcore International Mines Ltd., a gold production and exploration company focused on Mexico, American Consolidated Minerals Corp., a copper and gold exploration company, and Cortez Gold Corp., a capital pool corporation. He is also a director of Highland Resources Inc. and EMC Metals Corp. All of these companies are headquartered in Vancouver, British Columbia and listed on the Exchange, with the exception of Starcore International Mines Ltd. and EMC Metals Corp. which are listed on the Toronto Stock Exchange.

Gary Arca
Chief Financial Officer and Director

Mr. Arca is a Chartered Accountant (CA) and has been a member of the Canadian Institute of Chartered Accountants and British Columbia Institute of Chartered Accountants since 1980. He was a partner with two separate public accounting firms from 1996 to December 2005. Mr. Arca has extensive experience dealing with public companies and start-ups both from the perspective of management and as a consultant, and has served as a director of seven publicly traded resource companies in the past. In addition to the Company, he is currently a director and Chief Financial Officer of Starcore International Mines Ltd., American Consolidated Minerals Corp., Highland Resources Inc. and Cortez Gold Corp., all of which are listed on the Exchange, except for Starcore International Mines, which is listed on the Toronto Stock Exchange. Mr. Arca is also Chief Financial Officer of Golden Predator Royalty & Development Corp which is listed on the Exchange, EMC Metals Corp. which is listed on the Toronto Stock Exchange, and Platoro West Holdings Inc., which is listed on the CSNX.

Kent Kirby
Director

Mr. Kirby is President of Adnet Communications Inc. Adnet is a private company engaged in servicing publicly traded companies, meeting their website requirements. Mr. Kirby has been with Adnet since 1997. Prior thereto, he acted as a mining contractor for several private and public mining exploration companies throughout North America. Mr. Kirby has served as a director of various public resource companies, and is currently a director of Cortez Gold Corp., which is listed on the TSX Venture Exchange. Mr. Kirby graduated from BC Institute of Technology with a diploma in Business Administration in 1991.

Ken Sumanik
Director

Mr. Ken Sumanik (M.Sc.) is an environment and land specialist with over forty years experience in logging and mining impacts. From 1989 to 1999, he was Vice-President of Environment and Land Use for the Mining Association of British Columbia and then served as Assistant to the Minister for Mining in British Columbia before his involvement with junior public companies. Mr. Sumanik is currently a director of Starcore International Mines Ltd., a gold production and exploration company focused on Mexico and listed on the Toronto Stock Exchange, and Highland Resources Inc., a mining exploration company listed on the TSX Venture Exchange.

Description of Significant Conditions to Closing
Pursuant to Section 2.1 of Exchange policies, as the proposed Qualifying Transaction is not a Non-Arm's Length Qualifying Transaction, the Company will not be required to obtain shareholder approval of the Qualifying Transaction but will be submitting a Filing Statement for Exchange acceptance.

Pursuant to Exchange policies, the Company intends to apply for a waiver of the Exchange's sponsorship requirements; however there is no assurance that the Company will obtain this waiver.

The remaining conditions to closing the Proposed Acquisition include satisfactory due diligence being conducted by Parlane, the completion of a 43-101 Report on the Properties, and approval of the Proposed Acquisition as a Qualifying Transaction by the Exchange. 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.

ON BEHALF OF THE BOARD

Robert Eadie, President and Chief Executive Officer

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction. Neither the 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.

Contact Information

  • Parlane Resource Corp.
    Robert Eadie
    President and Chief Executive Officer
    604-602-4935 / Toll Free: 1-866-602-4935
    604-602-4936 (FAX)