Constitution Mining Corp.
OTC Bulletin Board : CMIN

December 03, 2009 09:00 ET

Constitution Mining Enters Into LOI to Acquire Nevada Properties

LIMA, PERU--(Marketwire - Dec. 3, 2009) - Constitution Mining Corp. (OTCBB:CMIN) reports that it has entered into a non-binding Letter of Intent to purchase all of the interests of Seabridge Gold Inc. in certain Nevada exploration properties, including Seabridge's Castle-Black Rock Project, for consideration exceeding US$7 million and consisting of three elements: (1) staged cash payments totalling US$3 million; (2) a US$1 million convertible debenture; and (3) 3 million shares of common stock in Constitution Mining. Closing of the transaction (expected on or about January 22, 2010) is subject to completion of final due diligence by Constitution, regulatory approval and execution of a binding definitive agreement.

Element 1. The US$3 million in cash is payable as follows: US$200,000 immediately; US$800,000 on Closing of the sale of the properties; US$1 million on February 28, 2010 and the final US$1 million under the terms of a secured promissory note due on the first anniversary of Closing with accrued interest at 8% per year.

Element 2. The US$1 million, two-year debenture is due on the second anniversary of Closing and accrues interest at 8% per year payable quarterly. The debenture can be redeemed by Constitution at any time prior to maturity upon payment of US$1.25 million. If not redeemed, the debenture and any accrued interest are convertible by Seabridge into common shares of Constitution at US$1.00 per share.

Constitution's obligations under the promissory note and the debenture will be secured by the properties.

Element 3. The 3 million shares of common stock in Constitution will be issued in two tranches. The first tranche, consisting of 1 million shares, will be issued on Closing. The second tranche, consisting of 2 million shares, will be issued on February 28, 2010 but will be held in escrow until the third anniversary of Closing or until confirmation that the properties host a measured and indicated gold resource of 1 million ounces or more, whichever occurs first.

Michael Stocker, Chairman of Constitution Mining, explained the Company's interest in the package of Nevada properties. "The planned acquisition of more than 2,000 claims and their already identified resources fits well with our philosophy. We're eager to get to work on them to expand the resources and move them toward the proven category. We see a realistic prospect that the importance of the Nevada properties could measure up to that of our large holdings in the Peruvian Gold Sands."

Mr. Stocker continues. "We see the proposed transaction as richly beneficial for both companies and. Constitution intends to conduct a vigorous exploration program on those properties, and the success we hope to achieve there and elsewhere will benefit all our shareholders, including, under the proposed terms, Seabridge Gold."

Property Summary

The properties subject to the contemplated transaction comprise interests in 2,141 claims in Nevada covering more than 30 exploration projects with known gold occurrences. Most of the claims are situated in Nevada's prolific Walker Lane gold belt. The most advanced is the Castle-Black Rock project in Esmeralda county, which has an NI-43-101-compliant gold resource of 215,000 ounces in the measured and indicated categories (12.38 million tonnes grading 0.54 gram of gold per tonne) and 93,000 ounces in the inferred category (7.95 million tonnes grading 0.37 gram of gold per tonne) (See Seabridge Gold's Oct. 10, 2000, news release published in Stockwatch).

Mr. William E. Threlkeld, a senior officer of Seabridge Gold, is the qualified person as required under NI 43-101, a report required under the rules of the Toronto Stock Exchange, and has reviewed the technical information contained in this news release.

About Seabridge Gold Inc.

Seabridge holds a 100% interest in several North American gold resource projects. The Company's principal assets are the KSM property located near Stewart, British Columbia, Canada and the Courageous Lake gold project located in Canada's Northwest Territories. For a breakdown of Seabridge's mineral resources by project and resource category please visit the Company's website at

About Constitution Mining Corp.

Our goal is to locate large-scale, commercially viable gold deposits and continuously increase the amount of gold underlying each of our outstanding shares. We're interested primarily in proven gold-bearing geographical areas that are home to several proven deposits in the multi-million ounce range, including highly prospective districts likely to hold further large deposits.

Our first and most active project is in the Gold Sands region of Peru, where we hold options on 382 square kilometers (147.5 square miles) of mining property, the largest such block in the district.

The Gold Sands of Peru were laid down by eons of alluvial erosion. For millions of years, the waters of the Santiago and the Maranon rivers have been carving their way through the gold-rich mountain canyons of the Andes, carrying off vast amounts of gold and depositing much of the treasure in loose gravels and sands - Gold Sands - in the area the Company now controls.

Results from test holes drilled a decade ago indicated a potential presence of significant alluvial gold. The Company is now engaged in a program of pitting and test-mining to confirm and extend those earlier results and to gather further data for determining the feasibility of large-scale mining of this vast resource.

The implementation of these programs will require the company to secure additional financing.

For further details, please see today's current Form 8-K filing.

Further information about Constitution Mining Corp may be found at

On behalf of the Board:

Dr. Michael Stocker - Chairman of the Board

Constitution Mining Corp. (CMIN.OB)

Disclaimer: This release contains forward-looking statements that are based on the beliefs of Constitution Mining Corp. management and reflect Constitution Mining Corp. current expectations as contemplated under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. When used in this release, the words "estimate, "project," "believe," "anticipate," "intend," "expect," "plan," "predict," "may," "should," "will," "can," the negative of these words, or such other variations thereon, or comparable terminology, are all intended to identify forward-looking statements. Such statements reflect the current views of Constitution Mining Corp. with respect to future events based on currently available information and are subject to numerous assumptions, risks and uncertainties, including, but not limited to, risks and uncertainties pertaining to development of mining properties, changes in economic conditions and other risks, uncertainties and factors, which may cause the actual results, performance, or achievement expressed or implied by such forward looking statements to differ materially from the forward looking statements. The information contained in this press release is historical in nature, has not been updated, and is current only to the date indicated in this press release. This information may no longer be accurate and therefore you should not rely on the information contained in this press release. To the extent permitted by law, Constitution Mining Corp. and its employees, agents and consultants exclude all liability for any loss or damage arising from the use of, or reliance on, any such information, whether or not caused by any negligent act or omission.

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