Auriga Gold Corp.
TSX VENTURE : AIA

Auriga Gold Corp.

December 02, 2010 12:22 ET

Auriga Gold Provides Update on Property Acquisitions, Recent Private Placement and Stock Option Grants

TORONTO, ONTARIO--(Marketwire - Dec. 2, 2010) - Auriga Gold Corp. (TSX VENTURE:AIA)("Auriga Gold" or the "Company") today provides updates on corporate matters regarding property acquisitions, the recent private placement and the granting of stock options. 

In October, the Company issued 1,262,500 shares and paid $40,000 to finalize the Fox Property acquisition, located on the Thompson nickel belt in northern Manitoba. The property comes to Auriga Gold with a substantial geological and geophysical exploration database, containing a number of drill ready targets associated with PGEs and base metals. For more details, please see press release dated November 3, 2010.

To finalize the acquisition of the Knife Lake Property (Mokoman Property) located in the Flin Flon Greenstone belt in Saskatchewan, the Company issued 375,000 shares. The final payment secures 100% ownership, subject to royalties, in the 1,500 hectare property containing a pre 43-101 resource of 6.0 million tonnes grading 0.90% Cu and 0.18g/t Au; the resource was estimated by Micon International Ltd. in 1997. (This resource is an historic resource, has not been verified by management and should not be relied on by investors; Company is not treating this historic estimate as current.) The property was obtained with a significant geological and geophysical database and has a number of potential drill targets.

Further to Auriga Gold's press release of November 3, 2010, in connection with the Company's listing where the Company completed a non-brokered private placement in various tranches of $5,350,762 through the issuance of (i) 2,542,393 flow-through subscription receipts ("FT Sub Receipts") at a price of $0.35 per FT Sub Receipt; and (ii) 14,869,747 subscription receipts ("Unit Sub Receipts") at a price of $0.30 per Unit Sub Receipt. Each FT Sub Receipt entitles the holder thereof to receive, without payment of additional consideration, one unit (an "FT Unit") of the Company and each Unit Sub Receipt entitles the holder thereof to receive, without payment of additional consideration, one unit (a "Unit") of the Company. Resulting from the Company not qualifying the distribution of the FT Units and Units in Canada by a short form prospectus on or before the date that is 30 days following the closing date with respect to a FT Sub Receipt or a Unit Sub Receipt, as the case may be (i) each FT Unit entitles the holder thereof to receive, without payment of additional consideration, 1.1 Common Shares (each, an "FT Share") issued on a "flow-through" basis pursuant to the Income Tax Act (Canada) and one half of one common share purchase warrant (each whole warrant, an "FT Warrant") (in lieu of one FT Share and one half of one FT Warrant); (ii) each Unit entitles the holder thereof to receive, without payment of additional consideration, 1.1 Common Shares (each a "Unit Share") and one common share purchase warrant (a "Warrant") (in lieu of one Unit Share and one Warrant).

A preliminary short form prospectus has been filed and subject to regulatory approval, the Company plans to proceed with qualifying the FT units and Units in Canada.

Each whole FT Warrant will entitle the holder thereof to purchase one Common Share for a period of twenty-four months from date of issuance of the Warrants at a price of $0.45 per Common Share. Each Warrant will entitle the holder thereof to purchase one Common Share for a period of twenty-four months from the date of issuance of the warrants at a price of $0.40 per Common Share. 

The Company also announces that it has granted an aggregate of 1,420,000 options to purchase common shares of the Company exercisable at a price of $0.355 per share for a period of 5 years, to certain directors, officers and consultants of the Company. In accordance with policies within the TSX Venture Exchange, 50,000 of these options have been granted to the Investor Relations Manager will vest in equal installments quarterly for a period of 12 months. If the options are exercised within four months from the original date of grant, the common shares issued upon exercise of the options are subject to a four month hold period.

Resulting from the recent property acquisition and the delay qualifying distribution, the Company has in issuance 33,528,454 shares outstanding, 2,145,000 options and 17,521,621 warrants, totaling 53,195,075 shares fully diluted.

About Auriga Gold

Auriga Gold Corp. is a Canadian exploration and development company with an experienced technical team focused on expanding gold resources and developing the combined Puffy Lake and Nokomis properties (the "Maverick Gold Project"). The Company plans to upgrade and expand the historic resources at the Maverick Gold Project and evaluate bringing the Puffy Lake Mine back into production. The Puffy Lake Mine includes a 1,000 tpd flotation mill, a developed underground ramp to 130 metres depth, is road accessible and close to existing mining infrastructure. The Maverick Gold Project is located in the Flin Flon Greenstone Belt of Central Manitoba and includes historical resources (pre-NI 43-101) of 540,000 ounces of gold at Puffy Lake and 68,000 ounces of gold at Nokomis. The Flin Flon Greenstone Belt hosts a number of significant base and precious deposits.

Richard H. Sutcliffe, P.Geo, a director and a registered Professional Geologist, is designated as the Qualified Person under National Instrument 43-101 (NI 43-101) and has reviewed and approved the contents of this news release. A qualified person has not done sufficient work to verify the historical resource estimates at Puffy Lake and Nokomis. These historic estimates predate NI 43-101, are not compliant with current definitions, have not been verified by the company and consequently should not be relied on by investors. The historical estimates are provided as an indication of historically reported estimates.

Certain information regarding the Company including management's assessment of future plans and operations, may constitute forward looking statements under applicable securities laws and necessarily involve risks associated with mining exploration and development, volatility of prices, currency fluctuations, imprecision of resource estimates, environmental and permitting risks, access to labour and services, competition from other companies and ability to access sufficient capital. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. A feasibility study has not been completed and there is no certainty the disclosed targets will be achieved nor that the proposed operations will be economically viable.

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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