Golden Raven Resources Ltd.

June 22, 2012 08:30 ET

Golden Raven Signs Definitive Agreement with O2Iron

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 22, 2012) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR RELEASE TO U.S. NEWSWIRE SERVICES

Golden Raven Resources Ltd. ("Golden Raven" or the "Company") is pleased to announce that it has entered into a definitive option agreement (the "Agreement") with Jacobi Mineração Ltda ("Jacobi"), Geobraz Exploration Ltda ("Geobraz") and O2iron Mineração Ltda. ("O2iron") to acquire 100% ownership of the O2iron property in Tocantins, Brazil (the "Property").

The Property consists of 15 mineral claims covering an area of approximately 1,125 sq. km. The iron-bearing formations with the project area are shallow, flat lying units that form plateaus due to their weather-resistant nature, relative to the surrounding rocks. Twenty-two such plateaus occur with the current property limits. Forty-five drill holes, totaling 369 metres have been completed within the project area to date.

Prior to closing, the Company (through O2Iron), will complete a drilling program, of up to 1,100 metres, on the Property with the goal of establishing an initial mineral resource estimate. The Company will also prepare a National Instrument 43-101 compliant technical report on the Property.

The Company is led by Forbes West Management Corp. ("Forbes West"), a Vancouver-based mining services company established by Mr. Mark Morabito. Forbes West, in association with Forbes & Manhattan, provides administrative, management, geological, regulatory, tax, corporate development and investor relations services to mining companies throughout North America.

Transaction Highlights

On closing, the Company will acquire 100% ownership of O2iron, a Brazilian corporation, which holds a 100% interest in the Property (the "Transaction"). In consideration for the sale of O2iron to the Company, upon closing, Jacobi and Geobraz will receive:

  • the number of common shares of the Company representing 50% of the issued and outstanding capital of the Company, following completion of the Financing (defined below);
  • a one-time cash payment of C$250,000;
  • the right to nominate four nominees to the Board of Directors of the Company, subject to certain conditions;
  • the right to appoint the CEO of the company;
  • the right to participate in future financings of the Company, subject to certain conditions; and
  • a 1.5% Net Smelter Royalty on the Property.

In conjunction with, or prior to the closing of the Transaction, the Company will complete a private placement (the "Financing") for gross proceeds of at least $10,000,000, with an option to increase to $12,500,000. Prior to closing, the Company intends to complete a consolidation of its outstanding common shares and warrants on the basis of one post-consolidation share for every two pre-consolidation shares. In addition, the Company will be required to incur cumulative expenditures of at least $8 million in connection with the development of the Property within a period of 24 months from the date of closing.

Full details of the Transaction will be included in a Management Information Circular to be filed with the regulatory authorities and mailed to Golden Raven shareholders in accordance with applicable securities laws. The Transaction is being conducted at arm's length.

Completion of the Transaction is subject to a number of conditions, including regulatory and shareholder approval. The transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Management Information Circular to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.

Adrian Bray, P. Geo, Director of the Company and a Qualified Person as defined by NI 43-101, has reviewed and approved the technical information contained in this news release.

Cautionary Note Regarding Forward-Looking Statements

Information set forth in this news release may involve forward-looking statements under applicable securities laws. Forward-looking statements are statements that relate to future, not past, events. In this context, forward-looking statements often address expected future business and financial performance, and often contain words such as "anticipate", "believe", "plan", "estimate", "expect", and "intend", statements that an action or event "may", "might", "could", "should", or "will" be taken or occur, or other similar expressions. All statements, other than statements of historical fact, included herein including, without limitation; statements about the terms and completion of the Transaction, the Financing, the potential of the Property and the details of the drill program and completion of a technical report, are forward-looking statements. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks: the need for additional financing; operational risks associated with mineral exploration; requirement to obtain shareholder approval; fluctuations in commodity prices; title matters; environmental liability claims and insurance; reliance on key personnel; the potential for conflicts of interest among certain officers, directors or promoters with certain other projects; competition; dilution; and the additional risks identified in the management discussion and analysis section of our interim and most recent annual financial statement or other reports and filings with applicable Canadian securities regulators. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable securities laws. Investors are cautioned against attributing undue certainty to forward-looking statements.

No Stock Exchange has passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

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