Golden Tag Resources Ltd.

Golden Tag Resources Ltd.

May 20, 2010 08:30 ET

Golden Tag Enters Arbitration Hearings on Mexican Property: May 26th to 28th, 2010

MONTREAL, QUEBEC--(Marketwire - May 20, 2010) - Golden Tag Resources Ltd. (TSX VENTURE:GOG) ("Golden Tag") announces that arbitration hearings between Golden Tag and ECU Silver Mining Inc. ("ECU") are scheduled to be held in Montreal on May 26th to 28th, 2010 in respect of the San Diego property. The property is located in the Velardena Mining District, Municipality of Cuencame, Durango State, Mexico (the "Property"). Golden Tag is fully vested in a 50% interest in the Property pursuant to the joint venture agreement (the "JVA") signed on November 2, 2005. ECU is operator of the San Diego joint venture.

Golden Tag in a letter dated March 20, 2009 notified ECU of numerous fundamental breaches committed by it under the JVA. Golden Tag subsequently received assurances that the breaches would be rectified within the requested 30 day period. Despite several follow-ups, the breaches were not remedied. On June 23, 2009 [see Press Release: June 23, 2009] Golden Tag issued a formal notice demanding arbitration.

After issuing the arbitration notice, Golden Tag learned that ECU had commenced unauthorized removal of surface stockpiles on the Property at a daily rate of approximately 250 tonnes per day, also a clear contravention of the JVA. Golden Tag issued a formal notice [see press release: August 13th, 2009] demanding the immediate cessation of the removal. ECU immediately complied with the demand to cease but had removed and processed approximately 3,000 tonnes of material. 

Because of the nature and number of fundamental breaches to the terms of the JVA, Golden Tag is seeking to operate the Property, dilution of ECU's interest, receive a substantial amount of damages and other relief.

The San Diego Property hosts published NI 43-101 compliant Resources [See Press Release: January 27, 2009] of:

Indicated Resources

371,000 Tonnes grading 245 Ag g/t, 1.80 % Pb, 1.33 % Zn and 0.339 Au g/t,

  • representing 4.25 Million ounces of silver Equivalent (oz.Ag EQ), or,
  • 371,000 Tonnes grading 356 g.Ag EQ/t (11.44 oz.Ag EQ/t).

Inferred Resources

21,632,000 Tonnes grading 110 Ag g/t, 1.84 % Pb, 2.21 % Zn and 0.134 Au g/t

  • representing 214.3 Million ounces of silver Equivalent (oz.Ag EQ), or,
  • 21.6 Million Tonnes grading 308 g.Ag EQ/t (9.91 oz.Ag EQ/t).

Golden Tag Resources Ltd. is a junior exploration company exploring for high grade gold and silver deposits at the San Diego silver project in Durango State, Mexico; the Aquilon Gold Project in James Bay, Quebec; and the McCuaig gold project in Red Lake, Ontario. Golden Tag has 39,770,958 issued and outstanding shares.

Statements in the release that are "forward-looking statements" are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially. We undertake no duty to update any forward-looking statement to conform the statements to actual results or changes in our expectations.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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