Barkerville Gold Mines Ltd.

Barkerville Gold Mines Ltd.

September 23, 2010 07:29 ET

Barkerville to Purchase Additional Gold Mill Facility in Central British Columbia

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 23, 2010) - Barkerville Gold Mines Ltd. ("Barkerville" or the "Company") (TSX VENTURE:BGM)(FRANKFURT:IWUB) announces that it has entered into a Letter of Intent effective September 2, 2010 (the "LOI") with International Bethlehem Mining Corporation (TSX VENTURE:IBC) ("IBC") to purchase Bethlehem Resources (1996) Corporation ("BRC"), a wholly-owned subsidiary of IBC, and its Goldstream Mill facility, tailings pond and related mineral leases and claims (the "Acquisition").

It is the Company's intention, subject to approvals, to relocate, refurbish and upgrade the Goldstream mill facility to the base of Cow Mountain, near Wells, BC, where two of Barkerville's NI43-101 gold resources and proposed open-pit deposits are located in Central British Columbia. Upon relocation, the Company plans to upgrade the mill with an additional ball mill and a carbon-in-pulp circuit, to an increased capacity of 2,000 tonnes per day. The Company's Bonanza Ledge proposed open-pit mine on the adjacent Barkerville Mountain is currently in the BC Mines Act approval process. The Cariboo Gold Project, encompassing Cow Mountain, is anticipated to re-enter the BC Environmental Assessment Process in the 4th Quarter of 2011.

J. Frank Callaghan, President and CEO of the Company commented "Having just achieved commercial gold production at the Company's QR Gold Mine & Mill, we are pleased to have the opportunity to potentially increase the Company's gold production profile with the addition of a second milling facility in close proximity to our other two deposits".

The Goldstream Mill is a custom mineral processing plant and is located in the Revelstoke Mining Division, approximately 90 km north of Revelstoke, BC (via Hwy 23). The Goldstream Mill is currently on care and maintenance, however, has a nameplated milling capacity of 1,360 tonnes per day and residue from such operations can be accommodated in the adjacent tailings pond and surrounding properties.

Pursuant to the LOI, the Company will pay IBC an aggregate purchase price of $3,300,000 for BRC and the Goldstream Mill facility and related assets and properties. The Company will satisfy the purchase price by paying IBC a $50,000 deposit, a $200,000 due diligence fee, $250,000 on each of the 6 month and 12 month anniversaries of the Closing Date and $550,000 on the 18 month anniversary of the Closing Date. The Company will also issue $2,000,000 worth of shares of the Company to IBC by issuing $500,000 worth of shares on each of the Closing Date, the 6 month anniversary, 12 month anniversary and 18 month anniversary of the Closing Date. The number of shares to be issued to IBC will be calculated based on the volume weighted-average price of the Company's shares for the 10 trading days ending on the day prior to the Closing Date, 6 month anniversary, 12 month anniversary and 18 month anniversary of the Closing Date, as applicable.

The Acquisition will be subject to certain conditions including the execution of the Definitive Agreement and TSX Venture Exchange approval.

About Barkerville Gold Mines Ltd.

The Company has been developing its Cariboo Gold Project in Barkerville, B.C., which encompasses (from northwest to southeast) the former producing Hardscrabble Tungsten Mine, Mosquito Creek Gold Mine (now on care and maintenance), Aurum Mine, Island Mountain Mine, Cariboo Gold Quartz Mine, Bonanza Ledge (proposed mine), the Cariboo Thompson Gold & Silver Mine and the Cariboo Hudson Mine. The Company commenced operations in the Cariboo District in 1994 and since that time has focused on the exploration and development of its gold properties. Mineral tenures in the Historic Cariboo Goldfields encompass approximately 111,000 hectares (275,000 acres) over a 60 km long by 20 km wide belt. In the Barkerville Gold Camp, 101 creeks have reported placer gold production. Recorded gold production from the area totals more than 3.8 million ounces, including an estimated 2.64 million ounces from placer mining and 1.23 million ounces from lode mining. The Company began gold dore production in September of 2010 and does not have any of its future gold production hedged.

On Behalf of the Board of Directors, 

J. Frank Callaghan, President and CEO

This News Release contains forward-looking statements. Forward-looking statements are statements which relate to future events. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our industry, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

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

  • Barkerville Gold Mines Ltd.
    J. Frank Callaghan
    President and CEO
    604-669-6463 or Toll Free: 1-800-663-9688
    604-669-3041 (FAX)