Falcon Gold Corp.
TSX VENTURE : FG

Falcon Gold Corp.

August 03, 2011 08:00 ET

Falcon Gold Signs LOI With Markinch Resources on Maki Midas Project

SUDBURY, ONTARIO--(Marketwire - Aug. 3, 2011) - Falcon Gold Corp. (TSX VENTURE:FG) ("Falcon") is pleased to announce the signing of a Letter of Intent ("LOI") whereby, subject to satisfactory results of final due diligence, Falcon can acquire up to a 70% interest in the Maki Midas Property from Markinch Resources Inc. The Maki Midas Property is located in Vincent Township, approximately 120 kilometres northeast of Thunder Bay and is located within the Thunder Bay Mining Division of the Province of Ontario. The property consists of 18 unpatented claims and five leased claims covering a total of approximately 372 hectares (920 acres). The Maki Midas Property is accessible by road being situated approximately 1 kilometre south of the Trans-Canada Highway (Highway 11).

The Maki Midas Property is located in the Beardmore - Geraldton Gold Camp ("BGGC") which has historical gold production totaling approximately 4.1 million ounces. The Maki Midas Property is underlain by Archean aged metavolcanic and metasedimentary rocks being located on the southern margin of the Wabigoon Geological Subprovince. Previous exploration on the property has documented a number of gold occurrences consisting of gold bearing quartz-carbonate veins and stockworks and sulphide bearing iron formation. The Ontario Geological Survey collected and reported the results of grab samples that include 27.77 grams per tonne ("gpt") gold from quartz-carbonate veins and 13.7 gpt gold from sulphide bearing iron formation.

The LOI, to be replaced by a formal option and joint venture agreement (the "Option Agreement"), allows Falcon to earn up to a 70% interest in the Maki Midas Property, subject to a Net Smelter Royalty ("NSR") of 3% with an option to purchase 2% of the NSR at a rate of $1M per each 1%.

Under the terms of the LOI, Falcon may earn an initial 51% interest in the Maki Midas Property by making cash payments to Markinch of $155,000, issuing to Markinch 1,300,000 common shares of Falcon, issuing to Markinch 975,000 warrants with a strike price equal to the then current market price of Falcon common shares. Falcon must incur a minimum of $450,000 in exploration expenditures on the Maki Midas Property over a thirty month period. Of such amount, $200,000 must be incurred in the first 12 months, and of such $200,000, a minimum of $100,000 must be incurred by December 31, 2011. Falcon will be the operator for such expenditures.

Upon exercise of the First Option outlined above, Falcon will have the right to elect to proceed with a Second Option, under which Falcon would have the right to earn an additional 19% interest in the Maki Midas Property by incurring additional exploration expenditures totaling $750,000 over an additional 18 month period.

Assuming the results of Falcon's technical due diligence are satisfactory, Falcon and Markinch have undertaken to finalize and enter into the Option Agreement by August 15, 2011. The Option Agreement will be subject to acceptance by the TSX Venture Exchange ("TSXV") on behalf of each of Markinch and Falcon. The terms of the LOI and proposed Option Agreement have been negotiated and approved by the directors of both companies.

The technical information in this news release has been prepared in accordance with the Canadian regulatory requirements set out in National Instrument 43-101 and reviewed on behalf of Falcon by Jamie Lavigne, P.Geo., a qualified person.

ON BEHALF OF THE BOARD OF DIRECTORS FALCON GOLD CORP.

Edward Stringer

This press release contains forward-looking statements and forward-looking information (collectively, "forward looking statements") within the meaning of applicable Canadian and United States securities laws. All statements, other than statements of historical fact, included herein, including statements regarding the anticipated content, commencement, duration and cost of exploration programs, anticipated exploration program results, the discovery and delineation of mineral deposits/resources/reserves, the timing of the receipt of assay results, and business and financing plans and trends, are forward-looking statements. Forward-looking statements are typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions or are those which, by their nature, refer to future events. Although the Company believes that such statements are reasonable, there can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. The Company cautions investors that any forward-looking statements by the Company are not guarantees of future performance, and that actual results may differ materially from those in forward-looking statements. Important factors that could cause actual events and results to differ materially from the Company's expectations include those related to weather, equipment and staff availability; performance of third parties; risks related to the exploration stage of the Company's projects; market fluctuations in prices for securities of exploration stage companies and in commodity prices; and uncertainties about the availability of additional financing; risks related to the Company's ability to identify one or more economic deposits on the properties, and variations in the nature, quality and quantity of any mineral deposits that may be located on the properties; risks related to the Company's ability to obtain any necessary permits, consents or authorizations required for its activities on the properties; and risks related to the Company's ability to produce minerals from the properties successfully or profitably. Trading in the securities of the Company should be considered highly speculative. All of the Company's public disclosure filings may be accessed via www.sedar.com and readers are urged to review these materials, including the latest technical reports filed with respect to the Company's mineral properties.

This news release may contain information with respect to adjacent or similar mineral properties in respect of which the Company has no interest or rights to explore or mine. Readers are cautioned that the Company has no interest in or right to acquire any interest in any such properties, and that mineral deposits on adjacent or similar properties are not indicative of mineral deposits on the Company's properties. This press release is not, and is not to be construed in any way as, an offer to buy or sell securities in the United States.

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 press release.

Contact Information

  • Falcon Gold Corp.
    Edward Stringer
    President, CEO and Director
    705-524-3777