SOURCE: NioGold Mining Corp

May 05, 2011 13:05 ET

NioGold and Geomega Amend Option Agreement for the Montviel and Pump Lake Properties

VAL-D'OR, QUEBEC--(Marketwire - May 5, 2011) - NioGold Mining Corporation (TSX-V: NOX) ("NioGold") and Geomega Resources Inc. ("GéoMégA") are pleased to jointly announce that they have entered into an amending agreement with respect to the Montviel and Pump Lake Option Agreement (see GéoMégA's news release dated November 11, 2010).

Under the amendment, GéoMégA will immediately acquire a 100% interest in the Montviel Property by issuing 1,525,000 common shares to NioGold, and NioGold will retain a 2% Net Output Return royalty on the Montviel Property with no buyback right for GéoMégA. In addition, GéoMégA will, upon securing 70% of the capital requirements for commercial production specified in the feasibility study (as that term is defined in National Instrument 43-101) for the Montviel Property, pay $4,500,000 to NioGold in cash or common shares at the election of NioGold, which amount shall be treated as non-refundable advanced royalty payment.

GéoMégA will continue to have an option to acquire up to a 100% interest in the Pump Lake Property. In order to exercise the option for an initial 75% interest, GéoMégA shall incur an aggregate of $400,000 in exploration expenditures in stages on or before September 30, 2014. Upon completion of these expenditures, GéoMégA will have the option to either abandon the property or form a joint venture with NioGold. Upon formation of the joint venture, GéoMégA will have an option to acquire the remaining 25% of the Pump Lake Property, exercisable by written notice given on or before August 31, 2017, and by (i) paying $7,500,000 to NioGold in cash or common shares (the election on one-half of such amount to be made by each party), (ii) granting to NioGold a 1% Net Output Return royalty on the Pump Lake Property, of which GéoMégA may buy back one-half (0.5%) for $500,000; and (iii) reimbursing NioGold for its contributions to the joint venture, together with a non-cumulative 20% premium, payable in cash or common shares at the election of NioGold.

All these transactions are subject to the approval of the TSX Venture.

NioGold Mining Corporation - « On Canada's Golden Highway »
NioGold Mining Corporation is a mineral exploration company focused on GOLD. The Company's flagship projects are located in the Cadillac - Malartic - Val-d'Or stretch of the prolific Abitibi gold mining district, Province of Quebec, Canada. The Cadillac, Malartic and Val-d'Or mining camps have produced over 45 million ounces of gold since the 1930's and presently encompass seven producing gold mines and a major mine development project (Canadian Malartic, Osisko Mining). NioGold's land holdings within the Abitibi presently cover 125 km2 and encompass three former gold producers, namely the Norlartic, Kierens (First Canadian), and Marban mines that collectively produced 600,000 ounces of gold. NioGold has outlined Indicated resources of 598,000 ounces gold and Inferred resources of 361,000 ounces gold in and around these deposits.

NioGold's experienced and qualified technical team will ensure the successful advancement of the Company's projects towards the highest quality mineral resources. NioGold invites you to visit the company website at www.niogold.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

FOWARD-LOOKING STATEMENTS
This news release includes forward-looking statements that are subject to risks and uncertainties. All statements within, other than statements of historical fact, are to be considered
forward looking. There can be no assurances that such statements will prove accurate and, therefore, readers are advised to rely on their own evaluation of such uncertainties.

CAUTIONARY NOTE TO U.S. INVESTORS
The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms in this news release, such as 'measured resources', 'indicated resources' and 'inferred resources', which the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 20-F. The news release contains information about adjacent properties on which we have no right to explore or mine. U.S. investors are cautioned that mineral deposits on adjacent properties may not be indicative of mineral deposits on our properties.

Contact Information

  • For information on NioGold Mining Corporation contact:
    Michael A. Iverson
    Chairman & CEO
    miverson@niogold.com
    Tel: (604) 856-9887

    Dale Paruk
    Vice-President
    dparuk@niogold.com
    Tel: (604) 662-4505
    Toll-free: (877) 642-6200