Robert R. McEwen

May 18, 2006 21:37 ET

Robert R. McEwen Acquires Common Shares of Nevada Pacific Gold Ltd.

TORONTO, ONTARIO--(CCNMatthews - May 18, 2006) -

Further to the news release dated December 14, 2005, Mr. McEwen has acquired ownership (the "Acquisition") of 5,578,787 units (the "Units") of Nevada Pacific Gold Ltd. ("Nevada Pacific Gold"), with each Unit consisting of one (1) common share ("Common Share") of Nevada Pacific Gold and one (1) warrant ("Warrant") of Nevada Pacific Gold exercisable to acquire one (1) Common Share at a price of $0.50 until May 11, 2008. The aggregate cash consideration for the Acquisition was $2,231,514.80.

Prior to the Acquisition, Mr. McEwen held 6,921,213 Common Shares and Warrants. After giving effect to the Acquisition, Mr. McEwen holds approximately 18.1% of the outstanding common shares of Nevada Pacific Gold (before giving effect to the exercise of the Warrants). Assuming the exercise of all of the Warrants forming, Mr. McEwen will hold approximately 30.7% of the outstanding common shares of Nevada Pacific Gold.

The subscription agreement (the "Subscription Agreement") entered into by Mr. McEwen with Nevada Pacific Gold provides, among other things, that, until May 11, 2008, if Mr. McEwen owns not less than 10% of the issued and outstanding common shares of Nevada Pacific Gold (assuming the exercise of any Warrants held by Mr. McEwen), then Mr. McEwen will have a right of first refusal to participate up to and including a percentage amount, equal to Mr. McEwen's percentage ownership interest in the then outstanding common shares of Nevada Pacific Gold, of the value of each financing undertaken by Nevada Pacific Gold, either by way of private placement or public offering of equity, debt, subscription units or convertible securities, rights offering or project financing (a "Financing") on the same terms and conditions (including price and timing) as other investors in each such Financing. Mr. McEwen's right to participate in a Financing applies to each Financing and is not affected by Mr. McEwen's exercise or failure to exercise such right in respect of any particular Financing.

In addition, the Subscription Agreement provides that, until December 13, 2010, if Mr. McEwen owns not less than 10% of the issued and outstanding common shares of Nevada Pacific Gold (assuming the exercise of any Warrants held by Mr. McEwen), then Mr. McEwen shall have the right, from time to time and at any time, to nominate one (1) individual (the "Nominee") to the board of directors of Nevada Pacific Gold, and Nevada Pacific Gold will use all reasonable efforts to cause its board of directors to pass such resolutions and to take such other actions as may be required in order that the Nominee become a member of the board of directors of Nevada Pacific Gold. In addition, Nevada Pacific Gold will use all reasonable efforts to cause its board of directors to pass such resolutions and to take such other actions as may be required in order to maintain the number of members of the board of directors of Nevada Pacific Gold at not more than six (6).

The Common Shares were issued from the treasury of Nevada Pacific Gold.

Contact Information

  • Ian J. Ball
    (647) 258-0395 ext.110