Key Gold Holding Inc.

Key Gold Holding Inc.

December 09, 2010 15:25 ET

Key Gold Holding Acquires Souart Gold Property and Announces Appointment of New President

QUEBEC CITY, CANADA--(Marketwire - Dec. 9, 2010) - Key Gold Holding Inc. (TSX VENTURE:KGH) ("Key Gold") is pleased to announce the arm's length acquisition of a 100% interest in the Souart gold property (the "Property") with historical resources estimated at 110,000 oz Au grading 6.2 g/t. This property acquisition is another step in implementing the corporation's new strategic mandate of focusing on copper-gold properties. Completion of this transaction is subject to the approval of the TSX Venture Exchange ("TSXV") and all securities issued thereunder will be subject to a four month hold period.

The Souart Gold Property

The Property consists of 49 claims and is strategically located in the vicinity of Metanor, Amseco, Bonterra, and Eagle Hill near Lebelle-sur-Quevillon in the Province of Quebec. The Property is subject to 1% NSR royalty. It is easily accessible all year by road with good infrastructures in place.

The Urban-Barry area is the site of renewed interest following the release of excellent drill results by Eagle Hill Exploration Corporation ("Eagle Hill") who reported 19.61 g/t Au (cut 3.51 g/t) Au over 33 m (Eagle Hill release of March 10, 2010). Noront Resources Ltd. ("Noront") previously reported grades of 800.1 to 1,792.9 g/t Au over 4.8 m (Noront release of December 1, 2006) and of 27.3 g/t Au over 14.4 meters (Noront release of June 8 2006) and more recently with Bonterra.

The Urban-Barry greenstone belt also hosts a number of gold deposits including the Lac Rouleau (Beaufield) to the northeast and the Barry deposit (Metanor).

A qualified person has not done sufficient work to classify the historical estimate as current mineral resources, the issuer is not treating the historical estimate as current mineral resources and the historical estimate should not be relied upon.

The Transaction

Pursuant to an arm's length purchase agreement made between Key Gold, Rivercrest Resources Inc. and Glen Eagle Resources Inc. (the "Agreement"), Key Gold will acquire a 100% interest in the Property in exchange for cash payments totaling $490,000, the issuance of 5,750,00 common shares of Key Gold and exploration expenditures totaling $1,750,000 in accordance with the following schedule:

Dates Cash Payments Share Issuances Work Commitments
Within 10 Business Days of the TSXV approval $40,000 1,030,000 -
Within one year of the signing date of the Agreement $150,000 1,220,000 $750,000
Within two year of the signing date of the Agreement $150,000 1,500,000 $1,000,000
Within tree year of the signing date of the Agreement $150,000 2,000,000 -

A finder's fee of 500,000 common shares of Key Gold is payable to Ansacha Capital Inc. on this transaction.

Closing of the acquisition is subject, amongst other things, to the completion of satisfactory due diligence on the Property by Key Gold, including the preparation of a Regulation 43-101 (Quebec) compliant technical report for the Property, financing and the approval of the TSXV.

Appointment of New President

Key Gold is also pleased to announce that its Board of Directors recently appointed Mr. Louis Lessard as president of the corporation.

Mr. Lessard is President of Centre Financier de la Cité inc., a private company providing financial support to emerging companies since 2004. Mr. Lessard was founder and director of various Capital Pool Companies and acts as directors for various companies. Mr. Lessard holds a Bachelor Degree in Economics from the Université Laval and a certificate in Law.

About Key Gold Holding Inc.

Key Gold Holding Inc. is a mineral exploration company that is mainly focused on company focused on the acquisition, exploration and development of gold and copper properties. Gilles Laverdière, P.Geo., a qualified person according to the Regulation 43-101 (Quebec) has reviewed and approved the technical content presented herein.

Shares outstanding: 13,560,434

Forward looking Statement

This document contains certain forward looking statements which involve known and unknown risks, delays, and uncertainties not under the corporation's control which may cause actual results, performance or achievements of the corporation to be materially different from the results, performance or expectation implied by these forward looking statements.

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

  • Key Gold Holding Inc.
    Louis Lessard