Crown Gold Corporation

March 28, 2011 16:55 ET

Crown Gold Signs Letter of Intent to Sell Three Nevada Properties for $16,000,000 in Cash and Securities

TORONTO, ONTARIO--(Marketwire - March 28, 2011) - Crown Gold Corporation ("Crown" or the "Company") (TSX VENTURE:CWM) is pleased to announce that it has signed a letter of intent with an arm's length private Canadian company, Argentium Resources Inc. ("Argentium"), to sell Crown's Monte Cristo, Sugarloaf and Blue Sphinx properties in Nevada to Argentium for $16,000,000 in cash and securities. The three properties are held in Crown's wholly-owned subsidiary, Gold Summit USA Corporation.

Argentium will pay $2,500,000 in cash, issue 13,500,000 shares with a value of $1.00 each and issue 4,500,000 warrants (each warrant will entitle the holder to purchase one additional Argentium share for $1.50 at any time within 36 months after closing, subject to acceleration in the event that the 20 day volume weighted average trading price of Argentium's shares on a Canadian stock exchange exceeds $2.00 per share for a period of 20 consecutive trading days). As well, Argentium has committed to spend at least US$10,000,000 on exploration and development of the three properties over the next three years. The transaction is subject to a number of conditions, including approval by each company's board of directors, due diligence by each company of the other's assets, completion of formal documentation, completion by Argentium of a financing of not less than $15,000,000 at a price of not less than $1.00 per share, listing approval for Argentium's shares for trading on a Canadian stock exchange and any other necessary shareholder and regulatory approvals.

Crown has NI 43-101 compliant inferred resources totaling approximately 339,000 ounces of gold at its Monte Cristo and Sugarloaf properties. The Monte Cristo deposit has total inferred resources of 1,923,349 tonnes grading 4.51 g/t Au above a cutoff of 1 g/t Au, containing about 279,000 ounces of gold. At the same cut-off, the Sugarloaf deposit has indicated resources of 353,100 tonnes grading 3.27 g/t Au (about 37,000 ounces of gold) and inferred resources of 293,500 tonnes grading 2.47 g/t Au (about 23,000 ounces of gold). The third property included in the proposed transaction is Crown's Blue Sphinx property which contains well-defined, essentially undrilled, targets.

Crown's President and Chief Executive Officer, Stephen Dunn stated, "this transaction will allow our three Nevada properties to be rapidly advanced by a company that is well financed and able to source the necessary funding required to put Monte Cristo into production. It not only recognizes the hidden value of our key Nevada gold projects, but it also allows Crown shareholders to continue to participate in their ongoing development through Crown's shareholdings in Argentium. At the same time, Crown will now be able to focus all of our exploration efforts on our Red Lake, Sakoose and Gogama projects in Ontario with the benefit of a strong balance sheet."

About Crown

Crown Gold, formed last year by the amalgamation of Crown Minerals and Gold Summit, is exploring for high grade gold and silver deposits in Nevada and Ontario.

In Ontario, Crown has its McKenzie Island property at Red Lake where a spring work program is being planned to follow up on its successful drill program this past February that yielded promising results, including 2.2 oz/gold over 3 feet (see Crown's news release dated March 3, 2011). Crown's other northwest Ontario properties are its Sakoose property near Kenora and its Surprise Lake property in the Uchi Belt, east of Red Lake. In northeastern Ontario, Crown holds three other strategic land positions: one adjacent to Trelawney's Chester discovery near Gogama, another at the old Stairs Mine near Matachewan and a third in the heart of the Timmins camp.

In Nevada, in addition to its Monte Cristo, Sugarloaf and Blue Sphinx properties, Crown has two other gold exploration properties, Gold Springs and Black Warrior, each of which contains well-defined, essentially undrilled, targets.

Larry Kornze, Senior Consultant to Crown Gold and a registered Professional Engineer/Geologist, is designated as the Qualified Person under National Instrument 43-101 and has reviewed and approved the contents of this news release.

For more information please see the Crown website at

This press release contains forward-looking statements within the meaning of applicable Canadian and U.S. securities regulation, including statements regarding the future activities of the Company. Forward-looking statements reflect the current beliefs and expectations of management and are identified by the use of words including "will", "anticipates", "expected to", "plans", "planned" and other similar words. Actual results may differ significantly. The achievement of the results expressed in forward-looking statements is subject to a number of risks, including those described in the Company's management discussion and analysis as filed with the Canadian securities regulatory authorities which are available at Investors are cautioned not to place undue reliance upon forward-looking statements.

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