Gem International Resources Inc.
TSX VENTURE : GI

May 17, 2011 09:00 ET

Gem International Options 100% of Gold Project in Bagamoyo, Handeni Districts in Tanzania and Update on Eden Gold Ltd. Acquisition

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 17, 2011) - Gem International Resources Inc. (TSX VENTURE:GI) has entered into an option agreement with Falco Goldfields Limited (the "Optionor"), to acquire a 100-per-cent interest in a gold and precious metals property, located in the Bagamoyo and Handeni regions of Tanzania. The Property is comprised of Prospecting License PL6632/2010 ("Bagamoyo Project"). The property contains a total area of 169.95 square kilometers and is located 20 kilometers southeast of Canaco Resources Inc.'s Handeni property.

The Bagamoyo Project is located within the Mazambique Geological Belt and is located 20 kilometers from the southeastern boundary of the Canaco Resources Inc.'s Handeni property. The regional geology of Bagamoyo shows structures and similar host rocks, which may be similar to the Magambazi discovery of Canaco Resources Inc. The reported host rock on the property is a garnetiferrous granulite, similar to the host lithology for the Magambazi discovery. There are artisanal gold mining operations, which lie on intersections of northwesterly trending structures crosscut by northeasterly trending lineaments that extend from the Magambazi discovery to Bagamoyo project. Geological information has been provided by the vendor.

The consideration for the acquisition is cash payments totaling CDN$400,000 over a 2 year period. The Optionor retains a 2-per-cent Net Smelter Return Royalty of which, 1% can be purchased for CDN$ 1,500,000.

Cash payment schedule:

  • CDN$50,000 upon the execution of the Option Agreement;
  • CDN$150,000 within 5 business days of written approval from the TSX Venture Exchange; and
  • CDN$200,000 on or before 24 months after TSX Venture Exchange Approval

Gem International Resources Update on Previously Announced Acquisition with Eden Gold Ltd.

The Company is still awaiting clarification of ownership to the Handeni property (previously announced in Stockwatch on Sept. 14, 2010) from Eden Gold Ltd. Upon clarification of ownership, the Company will move forward to close the property acquisition.

These transactions are subject to regulatory approval and verification of title. The maximum allowable finder's fee shall be paid in shares and cash with regard to the value derived from the Agreement as per the TSX Venture Exchange's policy guidelines.

Mike Magrum, P. Eng., a qualified person under National Instrument 43-101, has approved the technical content of this news release.

Gem International Resources Inc.

Simon Tam, Director

This News Release shall not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction.

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This News Release contains forward looking statements that are not historical facts and are subject to risks and uncertainties which could cause actual results to differ materially from those set forth in or implied herein.

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

  • Gem International Resources Inc.
    Simon Tam
    Director
    (604) 871-9916
    (604) 871-9926 (FAX)