Golden Share Mining Corporation
TSX VENTURE : GSH

Golden Share Mining Corporation

March 28, 2011 09:47 ET

Lake Shore Gold to Acquire 19.99% of Golden Share Through Sale of 100% Interest in Band Ore Property, Ontario, Canada

MONTREAL, QUEBEC--(Marketwire - March 28, 2011) - Golden Share Mining Corporation (« Golden Share »)(TSX VENTURE:GSH) is pleased to announce that it has signed a letter of intent dated March 25th, 2011 (the "LOI") to acquire Lake Shore Gold Corp.'s ("Lake Shore Gold") 100% interest in the Band Ore gold property ("Band Ore property"), located in the Shebandowan belt of northwestern Ontario. Under the terms of the LOI, and if the Band Ore transaction (the "Transaction") is successfully completed, Lake Shore Gold would in return obtain a 19.99% interest in Golden Share, which may be increased to as much as 30% under certain conditions, and thereby become the Company's single largest shareholder.

Golden Share holds an important land position in the Shebandowan greenstone belt, an underexplored classic Archean sequence exhibiting strong similarities to the Hemlo, Timmins, Kirkland Lake and Val d'Or gold camps both in geological and tectonic evolution. The Shebandowan belt is situated approximately 70 km west of Thunder Bay and is readily accessible by road.

Lake Shore Gold's Band Ore property is immediately adjacent to Golden Share's recently optioned Conacher property and hosts the Band Ore deposit which contains historical resources of 251,271 ounces of gold within two principal zones (706,000 tonnes at a grade of 6.86 g/t Au* in the Main zone and 616,000 tonnes at a grade of 4.83 g/t Au* in the #4 zone).

Following completion of the Transaction, Golden Share will control an 18 kms of strike length along the northern part of the Shebandowan belt highlighted by two advanced gold targets (see figure # 1: http://media3.marketwire.com/docs/Figure_1_Shebandowan_Gold_Play.pdf or visit http://www.goldenshare.ca) :

  • Pistol Lake JF's West zone : 150,699 oz Au Inferred Resource (2,857,200 MT @ 1.64 g/t Au at 1.00 g/t Au cut off / NI 43-101 compliant). 
  • Band Ore deposit : 251,271 oz Au in historical resources within two principal zones (706,000 tonnes at a grade of 6.86 g/t Au* in the Main zone and 616,000 tonnes at a grade of 4.83 g/t Au* in the #4 zone).

Philippe Giaro, President and CEO of Golden Share, commented: "The consolidation of ownership in the area through the acquisition of Lake Shore Gold's Band Ore property provides tremendous opportunities for both companies and their shareholders. The combination of the Pistol Lake and Band Ore advanced gold targets generates an excellent critical mass to aggressively pursue a resource development strategy with a first targeted objective of 1,000,000 ounces of gold. Additionally, the expanded property provides outstanding blue-sky opportunities through numerous untested geological models and mineralized surface showings. To our knowledge, this is the first time in the region's history that a cohesive and unified land package has been established and the resulting regional strategic approach will allow a much more comprehensive and efficient development of this underexplored gold belt."

Under the terms of the LOI, Lake Shore Gold has agreed to sell its 100% interest in the Band Ore property in exchange for a 19.99% ownership interest in Golden Share. The number of shares to be issued to Lake Shore Gold as a result of the Transaction will be established upon completion of a financing for no less than $2.5 million from third party investors to be executed by Golden Share following the signing of the LOI. Closing of the Transaction is conditional upon completion of the financing. In addition, Golden Share has agreed to grant Lake Shore Gold warrants to purchase 50% of the number of shares to be issued pursuant to the Transaction.

The LOI also specifies that :

  • So long as Lake Shore Gold's ownership interest is above 9.9%, Lake Shore Gold will have the right to participate in Golden Share's future financings in proportion to Lake Shore Gold's pro rata share for a period of five years, so as to maintain the percentage interest in Golden Share. In the event Lake Shore Gold's ownership decreases below 9.9% this right will cease.
  • For a period of five years, Lake Shore Gold will have the right to increase its shareholding in Golden Share to up to 30% by purchasing additional shares from Golden Share in a private placement using the 20 day Volume Weighted Average Price of the Golden Share shares at that time.
  • Lake Shore Gold will retain a 1% Net Smelter Return Royalty ("NSR") on all minerals produced from the Band Ore property. 
  • Lake Shore Gold will have the right to nominate one director to the board of Golden Share as long as Lake Shore Gold's interest in Golden Share stays at or above 9.9%.
  • Golden Share agrees to incur a minimum of $250,000 in exploration expenditures on the Band Ore property within the next two years.

This transaction is subject to the negotiation and execution of a definitive agreement as well as to the approval of relevant stock exchanges and other regulatory authorities as necessary.

About the Shebandowan greenstone belt

The Southern part of northwestern Ontario is increasingly being recognized as an emerging gold province (see figure 2: http://media3.marketwire.com/docs/Figure_2_Emerging_Gold_Province.pdf or visit : http://www.goldenshare.ca). In the Fort Frances area, Rainy River has so far defined over 5 M oz Au in Indicated and Inferred Resources on their Rainy River Project. In the Atikokan area, Osisko Mining Corporation acquired Brett Resources Inc. following the discovery of the 6.7 M oz Au Hammond Reef deposit. The Shebandowan greenstone belt lies at the eastern end of this prolific province and is the object of intensifying exploration. Foundation Resources Inc. and Alto Ventures reported diamond drilling results of 8.39 g/t Au over 11.0 m and 4.88 g/t Au over 27.3 m on the East Coldstream Deposit located 15 km west of Golden Share's Pistol Lake property. In July 2010, Moss Lake Gold Mines ltd. provided an upgraded NI 43-101 resource estimate for its + 1 M oz Au Moss Lake deposit.

About Golden Share Mining Corporation

Golden Share Mining Corporation is a young Canadian exploration company targeting the gold belts of Eastern Canada. The Company has 67 M O/S, a cash position of $1M and no debt. Golden Share development's strategy involves advancing a well balanced portfolio of gold properties in a politically stable environment with a history of gold endowment through systematic exploration, resource definition and acquisitions.

Philippe Giaro, P. Geo., President and CEO of Golden Share Mining Corporation and Qualified Person for Golden Share, has reviewed and approved the content of this release. 

*These estimates were executed prior to the introduction of National Instrument 43-101; hence they should be treated as historical data and therefore not be relied upon.

FOR MORE INFORMATION, CONSULT http://www.goldenshare.ca OR OUR FACEBOOK PAGE AT http://www.facebook.com/#!/profile.php?id=100001472712018&v=wall

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