Augen Gold Corp.
TSX VENTURE : GLD

Augen Gold Corp.

December 15, 2010 12:04 ET

Augen Gold to Joint Venture With Sanatana

TORONTO, ONTARIO--(Marketwire - Dec. 15, 2010) - Augen Gold Corp. ("Augen Gold" or the "Company") (TSX VENTURE:GLD) announced today that it has entered into a letter of intent (LOI) effective December 14, 2010, with Vancouver-based Sanatana Diamonds Inc. (TSX VENTURE:STA) a well-managed emerging resource company, for a proposed Option and Joint Venture Agreement ("the Agreement") to acquire up to 51% undivided interest in the rights to certain mineral claims in Chester, Yeo, Neville, and Benneweis townships in Ontario. These claims exclude those depicted in the map entitled "WCoté with Planned Drill Holes" (posted on Augen Gold's website, www.augengold.ca) where a current 18 DDH program is underway, although Sanatana has been granted a first right of refusal on these claims should GLD decide to enter into a joint venture on them.

"The main claims in this LOI are in areas that have exellent potential, but are unlikely to be a major focus for Augen Gold for the next few years," said J. David Mason, president and CEO of Augen Gold. "In our opinion, this is an excellent agreement for GLD and will prevent unnecessary dilution while supporting the company's intense focus on its four main targets.

Sanatana has agreed to spend $5 million on these claims over the next three years and provide cash plus 5,000,000 shares in Sanatana as payment for the option. The proposed Agreement is subject to, among other things, the completion of satisfactory due diligence, the negotiation and execution of a definitive agreement, approval of the boards of both parties, and approval of the TSX-V; the parties have agreed to execute this definitive agreement on or before February 15, 2011. The proposed Agreement is an arm's-length transaction and is not expected to require shareholder ratification.

Augen Gold has been successful in raising approximately $9.1 million in 2010 and is focused on achieving its exploration milestones. Since inception in October 2006, the Company has raised more than $20 million for the South Swayze Project.

About Sanatana Diamonds Inc.

Sanatana Diamonds Inc. is an exploration stage company with projects in the North West Territories and the Yukon. The Company has an experienced management team and Board of Directors. Sanatana Diamonds, headquartered in Vancouver, is listed on the TSX Venture Exchange (TSX VENTURE:STA).

About Augen Gold

Augen Gold is a gold exploration company with 23,685 hectares of staked and patented mining claims in the Southern Swayze Greenstone Belt, including the formerly producing Jerome Gold Mine. The claims cover a 45-kilometre long section of the Ridout Deformation Zone, believed to be the western extension of the Kirkland Lake/Larder Lake Break. The geological setting is comparable to the major gold camps of Timmins and Kirkland Lake, and the claims contain numerous gold showings that have received very little historical exploration. Augen Gold is the first company to have assembled such a coherent ground position. Augen Gold has performed a detailed airborne geophysical survey over the whole area, and its sampling program has confirmed the historically reported gold values. The correlation of many gold showings with geophysical features indicates excellent potential for the discovery of additional deposits. The Company's objectives are to aggressively explore the gold showings that correlate with geophysical anomalies, continue resource definition at the Jerome Mine, and to expand its property portfolio with highly prospective mineral assets.

For more information on the South Swayze Project, please refer to the Company's NI 43-101 compliant technical report "Amended and Restated Technical Report on the Augen Gold Corp. Claims, Porcupine Mining Division, District of Sudbury, Ontario, Canada" (effective April 8, 2008 available on the Company's profile at www.sedar.com).

For more information on Augen Gold, visit our website at www.augengold.ca.

The Company's documents may be accessed at www.sedar.com.

This news release contains forward-looking statements. These statements are based on information currently available to the Company and the Company provides no assurance that actual results will meet management's expectations. Forward-looking statements include estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as "believes", "anticipates", "expects", "estimates", "may", "could", "would", "will", or "plan". Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results relating to, among other things, results of exploration, project development, reclamation and capital costs of the Company's mineral properties, and the Company's financial condition and prospects, could differ materially from those currently anticipated in such statements for many reasons such as: changes in general economic conditions and conditions in the financial markets; changes in demand and prices for minerals; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological and operational difficulties encountered in connection with the activities of the Company; and other matters discussed in this news release. This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. The Company does not undertake to update any forward-looking statement that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities laws.

Shares outstanding: 102,783,064

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.

Contact Information

  • Augen Gold Corp.
    J. David Mason
    Chief Executive Officer and Director
    416-915-4231
    dmason@augengold.ca