Maxy Gold Corp.

Maxy Gold Corp.

October 19, 2009 09:00 ET

Maxy Gold Options Its Corina Gold Property to "Consorcio Minero Horizonte", a Private Peruvian Gold Mining Company

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 19, 2009) - MAXY GOLD CORP. (Maxy) (TSX VENTURE:MXD) is pleased to announce that it has signed a binding letter of intent with CONSORCIO MINERO HORIZONTE (Horizonte) granting them an option to acquire up to an 80% interest in the CORINA low sulphidation Gold property by paying Maxy US$700,000 in cash, completing US$8,500,000 of exploration and feasibility work and paying Maxy a sliding-scale royalty. Horizonte is a Peru-based private gold producer.

Andre Gauthier, Maxy President and CEO, said: "We are very proud to be working with Horizonte, an established gold producer with an excellent production record trying to grow aggressively by investing in high quality projects. Maxy's work to date and property location in a famous gold and silver producing camp suggests that Corina is highly prospective for low sulphidation epithermal gold mineralization and this agreement makes a very promising start to the development of the Company's Peru portfolio."

Felix Navarrau Grau, Horizonte president and CEO, said: "We are very pleased to acquire an interest in the CORINA property and to associate ourselves with such a group of professionals as Maxy. We strongly believe that the CORINA property has the potential to help Horizonte pursue its objectives. Horizonte will start field work as soon as the final agreement is signed."

Deal Terms:

Under the letter agreement, Horizonte will have a first option to earn a 65% interest in the Corina Property by paying total of US$700,000 in three installments: US$200,000 at each of signing and on the first anniversary, and the final US$300,000 on the second anniversary; and by completing not less than US$1,500,000 work expenditures within three years. The first US$500,000 including US$300,000 in drilling, is a firm commitment within 18 months.

Subject to completion of the first option, Horizonte would have 60 days in which to elect to invest a further US$7,000,000 over five years on feasibility work to earn an additional 15% interest (for an aggregate 80%) in the Corina Property.

Horizonte will pay Maxy a Net Smelter Return Royalty (NSR) on all gold and silver ounces produced over an initial 1.5 million ounces equivalent. The NSR will vary according to the gold price, so that no NSR is payable when gold is below US$500 per ounce, 1% NSR when gold is between US$500 and US$700 per ounce, and 1.5% NSR when gold is over US$700 per ounce.


The Corina Property comprises seven mineral rights currently held by Maxy, together with additional lands staked in cooperation with Horizonte. The Corina Property is located in the districts of Juan Espinoza Medrano and Cotaruse, province of Antabamba, department of Apurimac, of southern Peru, with a total approximate area of 5,768.83 hectares.

The property is located in a tertiary-age volcanic rock package that is host to many low and high sulphidation gold deposits in Peru such as LIAM, SELENE, PALLANCATA ANTAPITE, etc. A low sulfidation epithermal auriferous vein (Promesa) has been mapped over 4.5 km with rock chip values reaching up to 6.7 g/t gold. The vein structure cuts dacitic and rhyolitic pyroclastics, with limited erosion suggesting high potential for exploration at depth.

Quality Control:

Andre Gauthier, Maxy's President and CEO, a member of the Quebec Order of Engineers, is a Qualified Person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects and is responsible for the preparation and verification of the technical information in this release.

About Maxy

Maxy is a publicly traded junior exploration company focused on mineral acquisition, exploration and development in China and Peru. Maxy has internationally recognized Management and Exploration Teams, with a large and diverse network of contacts throughout China and South America. Maxy's common shares trade on the TSX Venture Exchange under the symbol "MXD".

Maxy has recently reported that it has signed a Letter of Intent ("LOI") with the Tier 1 TSX Venture Exchange listed company, Lara Exploration Ltd. (LRA, "Lara"), respecting the merger of Maxy into, or acquisition of Maxy by, Lara at an exchange ratio of one Lara share for eight Maxy shares. With Lara's shares closing at $0.70, the exchange ratio being offered by Lara represents a premium of 35% to the closing price of Maxy's shares on September 22, 2009. The proposed transaction will unite Maxy and its highly prospective exploration portfolio in Peru, and property interests in China with Lara, a well-funded prospect generator with a multi-commodity exploration portfolio focused on Brazil but with significant property holdings in Colombia and Peru.


Horizonte is a privately owned Peruvian company dedicated to exploration, exploitation and the metallurgy of gold, and owns the PARCOY mine in the Pataz batholith, located at Pataz province, La Libertad department of northern Peru. The main objective of Horizonte is to increase its current gold reserves to maintain sustainable mining production. Horizonte produced 166,000 ounces gold in 2008, with an accumulated production of 1.843 millions ounces gold accounted since 1990 to 2008. This year, Horizonte will produce 178,000 ounces gold and has budgeted an amount of 220,000 ounces for 2010 year, production that will come from Pataz and Untuca mines.

Statements in this press release other than purely historical information, including statements relating to the Company's future plans and objectives or expected results, constitute forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company's business, including risks inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking statement.

Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.

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