Nevado Resources Corporation

Nevado Resources Corporation

January 24, 2011 09:55 ET

Nevado Acquires Mining Claims in Fermont

MONTREAL, QUEBEC--(Marketwire - Jan. 24, 2011) - NEVADO RESOURCES CORPORATION (TSX VENTURE:VDO) (FRANKFURT:NSV) (the "Corporation" or "Nevado") is proud to announce the acquisition of a direct property interest of 100% of 928 active mining claims in the Fermont region (the « Property »), for a total consideration of $212,500 (payment in cash of $109,000 and the issuance of 150 000 Class « A » shares of the Corporation (the "Common Shares") at a price of $0,69 per Common Share) and the payment of a 2% royalty to the vendor from the net revenue of the working capital, of which 1% is redeemable by the Corporation for a lump-sum of $1,000,000 (the "Transaction"). The Property, extending over 47 000 hectares (470 Km2), is composed of 3 major blocks situated in the Fermont region, in the Province of Quebec.

The Transaction will allow the Corporation to become an important player in the Fermont sector, which is well renowned for its iron ore deposits and is currently getting a lot of attention. The blocks of claims acquired by Nevado are contiguous to the iron producers ArcelorMittal, Consolidated Thompson and Champion Minerals. The Property is located in a geological and geophysical environment conducive to the discovery of iron ore deposits.

For the purpose of the Transaction among related parties approved by the Board of Directors of the Corporation on January 19, 2011, which involves Mr. Bertrand Brassard (the "Vendor"), the senior management and the Board of Directors, with the exception of Mr. Bertrand Brassard, believe that the terms and conditions of the Transaction are just and fair. During the decision-making process, the senior management and the Board of Directors have taken many factors into consideration in evaluating the value of the Property. As a point of comparison, a mining company with mining claims in the Fermont region has announced recently the acquisition of two groups of mining claims, one composed of 13 mining claims and extending over 6.9 Km2, and the other composed of 28 mining claims and extending over 14 Km2, contiguous to the austral block targeted by the Transaction, for the purchase price of $60,000 in cash and the issuance of 80,000 shares for a total consideration of over $200,000, which comes up to approximately $5,000 per mining claim. In comparison, the Transaction contemplated by Nevado is based on a price of $229 per mining claim, which is much lower than the consideration paid in the aforementioned similar transaction.

Related Party Transaction

The Transaction is considered a related party transaction under Policy 5.9 Protection of Minority Security Holders in Special Transactions of the TSX Venture Exchange ("Policy 5.9") and Regulation 61-101 Respecting Protection of Minority Security Holders in Special Transactions ("Regulation 61-101") of the l'Autorité des marchés financiers, due to the fact that the Vendor is a Director of the Corporation.

Nonetheless, the Directors of the Corporation who voted in favour of the Transaction have determined that the exemptions from formal valuation and minority approval requirements available pursuant to Regulation 61-101 are applicable to the Transaction as neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the Transaction (to the exclusion of the 2% royalty on the net revenues of the working capital, which cannot be determined), exceeds 25 per cent of the Corporation's market capitalization.

The Common Shares received in consideration represent 0,44% of the Corporation's issued and outstanding Common Shares and, following the Transaction, Mr. Bertrand Brassard will have, directly and indirectly, the beneficial ownership or control over 6,78% of the Corporation's issued and outstanding Common Shares. At the moment of the Transaction, Mr. Bertrand Brassard had resigned from the position of Vice President Exploration which he had previously occupied.

The Corporation was unable to file a material change report less than 21 days before the expected date of the closing of the Transaction pursuant to Regulation 61-101, but believes the reduced time delay to be reasonable due to the necessity to proceed quickly with the Transaction.

The Transaction is subject to the Exchange's final approval and to customary approvals by the other regulatory authorities.

About Nevado Resources Corporation

Nevado Resources Corporation is a mineral exploration company listed under the symbol VDO on the TSX Venture Exchange and under the symbol NSV on the Frankfurt Exchange. Nevado owns 6 properties comprising 1,390 mining claims totalling 757 km2 in the Province of Quebec in two separate metallogenic environments, one in high grade iron-titanium-vanadium and one in gold.

Nevado's higher grade Iron-Titanium-Vanadium (magnetite-ilmenite) property comprises 2 claim blocks totalling 773 claims for 315 km2 situated in the La Blache Anorthositic Complex, located 145 km north of the city of Baie-Comeau and its port on the St. Lawrence Seaway. In 2011, Nevado plans to quickly advance the property to the drilling stage for NI 43-101 compliant mineral resource delineation. 

Nevado's gold assets comprise 5 properties totalling 442 km2 located 10 km south and southeast of Thetford Mines (Eastern Townships, Quebec), approximately 150 km east of Montreal.

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 news release. The statements made in this news release that are not historical facts are "forward-looking statements" and readers are cautioned that any such statements are not guarantees of future performance, and that actual developments or results, may vary materially from those in these "forward-looking" statements.

Contact Information

  • Nevado Resources Corporation
    Mr. Michael Curtis
    Acting President and Chief Executive Officer