Green Swan Capital Corp.

August 15, 2011 12:01 ET

Green Swan Signs Option Agreement With Melkior

OTTAWA, ONTARIO--(Marketwire - Aug. 15, 2011) - Green Swan Capital Corp. (TSX VENTURE:GSW.H) ("Green Swan"), a Capital Pool Company, announced on July 13, 2011 it had entered into a revised letter of intent with Melkior Resources Inc. (TSX VENTURE:MKR) ("Melkior"), which letter of intent contemplated Green Swan acquiring an option to purchase certain mining assets from Melkior.

Green Swan is pleased to announce that it has signed an option agreement (the "Agreement") with Melkior whereby Green Swan can acquire an option to purchase those assets from Melkior, with the intention that such option would constitute Green Swan's qualifying transaction ("QT"). The Agreement replaces the revised letter of intent in its entirety.

Under the Agreement, Green Swan can acquire up to a 70% interest in the mining areas commonly known as the RiverBank and Broke Back claims (together, the "Claims") from Melkior. The Claims are located in the James Bay Lowlands, Ontario, and consist of 69 unpatented claims covering approximately 14,784 hectares (36,532 acres). The Claims are in the highly prospective Ring of Fire multimetals area.

The Broke Back group is located approximately 10 kilometres north of Noront Resources Ltd.'s "Eagle's Nest", and is contiguous with some of Noront's claims. Claims belonging to Cliffs Natural Resources Inc. are located approximately 10 kilometres southeast of the Broke Back property.

The RiverBank group is located within a major regional gravity anomaly, and is immediately west of Melkior's 100% owned East Rim claims.

No exploration activity has been carried out on the Claims, save for a detailed 1659.5 line kilometre versatile time domain electromagnetic (VTEM) survey. To the best of Green Swan's knowledge, no ground work of any kind has been carried out by any person on the Claims.

Melkior has advised Green Swan that Melkior is contemplating effecting exploration activity on the Claims between the date of this press release and the closing of Green Swan's QT. If Melkior carries out such exploration activity before the closing of the QT, then by December 31, 2011 Green Swan must reimburse Melkior for the costs of such activity, plus a 10% management fee, which reimbursement and management fee will be deducted against the Work Program (see below).

The Agreement allows Green Swan to earn up to a 70% interest in the Claims, subject to a net smelter royalty ("NSR") not to exceed 2.5%. Green Swan may earn an initial 51% interest ("Option 1") in the Claims by making cash payments to Melkior of $25,000, issuing in favour of Melkior 1,500,000 common shares of Green Swan, issuing in favour of Melkior 750,000 warrants (the "Warrants"), and incurring a gross amount of $1,000,000 in eligible exploration expenditures on the Claims before December 31, 2014 (the "Work Program"). The Warrants are exercisable for a period of 12 months at a price of 15 cents per common share and for a further 12 month period at a price of 25 cents per common share, and have an acceleration clause should Green Swan's common shares trade above 30 cents for 20 consecutive trading days.

Upon completion of Option 1 outlined above, Green Swan will have the right to elect to proceed with Option 2, under which Green Swan would have the right to earn an additional 19% interest in the Claims by incurring additional exploration expenditures totaling a further $1,000,000 over an additional 24 month time frame. Green Swan may terminate either Option 1 or Option 2 at any time by giving 120 days' advance notice to that effect to Melkior. Green Swan's failure to give such notice will trigger a payment from Green Swan to Melkior in the amount of $25,000.

On the completion of Option 2 Green Swan will own 70% of the Claims and an industry standard joint venture will immediately be created, pursuant to which each of Green Swan and Melkior will contribute its proportionate share of all expenditures related to the Claims. A joint venture may also be created on the occurrence of certain other JV Events, as defined and described in the Agreement.

Melkior has the right, following the completion of Option 1 but prior to Green Swan making any expenditures to complete Option 2, to advise that it wishes to immediately form a Joint Venture on a 51% Green Swan / 49% Melkior basis. The exercise of this right by Melkior is considered a JV Event in the Agreement.

From the date of the QT, Green Swan shall be the operator on the Claims and shall levy a 10% operator's fee to Melkior.

The Agreement contains the terms, conditions, representations and warranties normally found within an agreement of this type.

Green Swan intends to effect a non-brokered private placement financing coincident with the closing of the QT, to meet and exceed TSX Venture Exchange requirements.


Mr. Dan Hilton
1400 - 340 Albert Street
Ottawa, ON
K1R 0A5
(613) 277-3266

Cautionary note: This news release contains 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. Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

This press release may contain forward looking statements, particularly those regarding cash flow, capital expenditures and investment plans. Resource estimates, unless specifically noted, are considered speculative. The Company has not filed a National Instrument 43-101 report on any property, but will do so as soon as the information is available. Any and all other resource or reserve estimates are historical in nature, and should not be relied upon. By their nature, forward looking statements involve risk and uncertainties because they relate to events and depend on factors that will or may occur in the future Actual results may vary depending upon exploration activities, industry production, commodity demand and pricing, currency exchange rates, and, but not limited to, general economic factors. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Company. Readers are cautioned not to place undue reliance on any statements of forward-looking information that speak only as of the date of this release. Additional information identifying risks and uncertainties is contained in the Company's filings with the Canadian securities regulators, which filings are available at

Cautionary Note to US investors: This is not an offer for sale, or solicitation of an offer to buy, in the United States or to any U.S. Person (as defined in Regulation S under the U.S. Securities Act of 1933, as amended) of any equity shares or any other securities of Green Swan or Melkior. The U.S. Securities and Exchange Commission specifically prohibits the use of certain terms, such as "reserves" unless such figures are based upon actual production or formation tests and can be shown to be economically and legally producible under existing economic and operating conditions.

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. The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

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