Greenock Resources Inc.

Greenock Resources Inc.

April 05, 2012 14:58 ET

Greenock Resources: Equity Private Placement and Update

TORONTO, ONTARIO--(Marketwire - April 5, 2012) - Greenock Resources Inc. (TSX VENTURE:GKR) ("Greenock") announces it is offering a non-brokered equity private placement at $0.05 per Common Share with an attached full common share purchase warrant that is eligible to purchase a Common Share at a price of $0.10 per share for a period of 36 months from the date of closing. The maximum offering is $100,000. These funds will be used advance corporate goals and restructure Greenock to move forward with future resource development projects.

As previously announced the conditions to satisfy the Letter Agreement dated October 5, 2011 for a private company Quatern Holdings Limited ("Quatern") or its nominee to acquire 87.5% of the shares of PTM Minerals (Cayman) Ltd. ("PTM") have not been completed. PTM is a wholly owned subsidiary of Greenock. The parties to the Letter Agreement are now in discussion regarding a new closing date and revising terms of the agreement to reflect the current status of outstanding conditions and the situation in the Democratic Republic of Congo ("DRC").

A US $250,000 Promissory Note to PTM from Precious Metals Investments ("PMI") has matured. PMI has filed a Statement of Claim with PTM and Greenock requesting payment. Greenock will be filing a Statement of Defense. The repayment of the PTM Promissory Note was one of the completion items that Quatern had agreed to repay as part of the transaction to acquire 87.5% of the shares of PTM. PTM has been in discussion with PMI regarding arrangements for the PTM Promissory Note.

As outlined in a press release dated February 21, 2012, Greenock had been informed of events in the DRC by Eurasian Natural Resources Corporation ("ENRC") that challenges the mineral rights of PTM. PTM disagrees with the statements and actions regarding Kakanda ownership rights. Based on opinions from PTM's DRC legal counsel it would appear that the proper procedures, notification and approvals for the rescinding of mineral licenses in DRC have not been followed and that the revocation of PTM's ownership of the Kakanda tailings is invalid. Given the limited financial resources of Greenock and PTM, defense options to protect Kakanda rights are limited and as such are still under review.

Greenock is completing the audit of Financial Statements for the December 31, 2011 year end. The audit will include a detailed review on all the aspects of the Kakanda project status and will be incorporated into the disclosures of the December 31, 2011 Financials and Management Discussion and Analysis. Initial review by the Auditors based on new IFRS accounting guidelines have recommended that the capitalized book value of the Kakanda project will have to be written down to $10,000. As of September 30, 2011, the Kakanda project had a capitalized book value of $5,575,076 The IFRS accounting rules do allow Greenock to write up the value of the Kakanda project in the future if circumstances permit and Greenock is able to demonstrate a recovery value. The IFRS accounting rules are forward looking and the emphasis is on what is recoverable and not on what has been spent in the past.

From an economic perspective, the May 25, 2008 NI 43-101 report on the Kakanda project demonstrated there is the potential for a large and economically viable copper / cobalt mine and processing plant project at the Kakanda site. Sensitivity analysis on the Kakanda tailings reprocessing project development alone forecast a Net Present Value of US $261.6 million at a 20% discount or a 55.3% Internal Rate of Return ($3.00 per lb. Copper and $15.00 per lb. Cobalt) (2008 capital cost assumptions with no royalty, tax or carried interest burdens). At this time, these assumptions would require updates to reflect current circumstances including the ongoing problems with title uncertainty and other challenges in the DRC.


Greenock Resources Inc. is a Canadian based international mineral development company that focuses on developing a portfolio of natural resource properties. Shares outstanding: 32,239,479.

The Kakanda copper / cobalt project in the Central African Copper Belt is adjacent to the operating Tenke copper / cobalt mine and plant presently being operated and expanded by Freeport McMoran and Lundin Mining. The Kakanda tailings reprocessing project has NI 43-101 measured and indicated resources of 18.5 million tonnes with an average grade of 1.25% copper and 0.15% cobalt. The adjacent Kakanda hard rock deposits have a historical resource of 18.6 million tonnes with an average grade of 3.19% copper and 0.19% cobalt.

Greenock holds a 100% interest in the Needles gold / silver property located in the Arrowhead mining district of Nye County, Nevada. The property is approximately 40 miles southeast of the Barrick - Kinross Round Mountain Gold Mine. The Needles property has had historical underground mining for gold and silver in the early 1920's.

This press release includes certain "Forward-Looking Statements" within the meaning of applicable securities laws. Other than statements of historical fact, all statements are "Forward-Looking Statements" that involve such various known and unknown risks, uncertainties and other factors. There can be no assurance that such statements will prove accurate. Results and future events could differ materially from those anticipated in such statements. Readers of this press release are cautioned not to place undue reliance on these "Forward-Looking Statements". Michael Newbury, P.Eng., is the qualified person who has reviewed this material on behalf of the Company. All dollar amounts are noted in Canadian dollars unless otherwise stated in this release.

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 release.

Contact Information