Reunion Gold Corporation

Reunion Gold Corporation

October 16, 2007 12:14 ET

Reunion Gold Corporation Seeks Approval to Acquire a New Project in Suriname - New Investor Relations Manager

LONGUEUIL, QUEBEC--(Marketwire - Oct. 16, 2007) - Reunion Gold Corporation (TSX VENTURE:RGD) ("Reunion" or the "Corporation") is pleased to announce that it has entered into an agreement with Laurentian Mountain Resources Inc. ("LMR") whereby Reunion may undertake exploration and acquire a 100% interest over a 96,500-hectare project located on the Lely Mountain and adjacent land in Eastern Suriname, South America (the "Lely Project"). The project encompasses a greenstone belt with similar geology to that hosting the Gross Rosebel gold deposit and other substantial gold deposits in Venezuela, Guyana and French Guiana. The transaction is subject to the approval of the TSX Venture Exchange (the "Exchange").

Terms and conditions of the Acquisition of the Lely Project

On October 15, 2007, the Corporation entered into an agreement (the "Assignment Agreement") with LMR under which LMR assigned and transferred all of its rights and interests in an option agreement between LMR and Grasshopper Aluminum Company N.V. ("Grassalco"), a Surinamese state-owned mining company, holding the three rights of exploration composing the Lely Project (the "Option Agreement").

The sole shareholder and president of LMR is Mr. David Fennell, the Chairman of the Corporation. Therefore, the transaction between the Corporation and LMR is not at arm's length. Under the proposed terms of the transaction between the Corporation and LMR, LMR would receive at closing 2 million common shares of the Corporation and would receive 2 additional common shares for each ounce of gold reported in a technical report prepared in compliance with National Instrument 43-101. The terms of the transaction between LMR and the Corporation were approved by a committee of the Board of Directors composed entirely of independent directors. The closing of the transaction with LMR is subject to the approval of the Exchange and other customary conditions.

Under the Option Agreement, the Corporation would have the right to explore, develop and acquire from Grassalco the Lely Project. To maintain its rights in the Option Agreement, the Corporation would have to pay to Grassalco the following amounts: US$100,000 the first and second year, US$125,000 the third year, US$200,000 the fourth year and US$ 250,000 each of the following years until completion of a feasibility study. An additional US$300,000 is payable to Grassalco upon the Corporation obtaining a right of exploitation and all required permits to commence construction of a mine on the Lely Project.

Grassalco agreed to transfer the rights of exploration as soon as an amount of US$5 million has been spent in exploration on the project. Under the Option Agreement, the minimum exploration expenditures are US$8 million over a five-year period including US$500,000 the first year.

Grassalco will retain a Net Smelter Return Royalty varying between 3% and 5% depending on the price of gold. This royalty includes the royalty payable to the government of Suriname under the mining laws of Suriname. After completion of a feasibility study and environmental impact study, Grassalco will have a 90-day option to acquire a 20% interest in the project at the then market price.

LMR is in the process of acquiring additional ground adjacent to the Lely Project. The Assignment Agreement provides for LMR to transfer its rights on the adjacent ground to Reunion Gold for no additional consideration.

The Lely Project

The Lely Project is located within the greenstone belt of Eastern Suriname, approximately 180 km south-southeast of the capital Paramaribo. A series of 600 m high plateaus arranged in an arcuate shape, apexing towards the southwest, dominate the landscape. There is limited vehicle access to the northern part of the Project, several airstrips and river access to other parts of the Project. The geology of the Project is predominantly composed of a meta-volcanic-sedimentary assemblage of the Lower Proterozoic Marowijne Group consisting of meta-basalt, amphibolite, dacite, andesite, ash-tuff, agglomerate and chlorite-sericite schist, overlain by fine clastic sediments of the Armina Formation which in its turn is superposed by coarse clastic quartzite and conglomerate of the Rosebel Formation. Lely Mountain and the area to the east appear to be underlain by a northeast striking synclinorium with southwesterly plunge. To the north, it merges into an east striking anticlinorium with easterly plunge, followed by a northwest striking synclinorium northwest of Nassau Mountain. Fold axes directions are at variance with each other, probably due to the intrusive action of tonalite bodies displacing intruded host rocks.

Very little, if any, systematic modern gold exploration has been carried out in this area of Suriname notwithstanding the favourable geological setting, the plus one hundred year history of artisanal gold mining and the current intensive artisanal gold mining in the northern part of the Lely Project.

Reunion plans to commence an intensive exploration effort to evaluate the Lely Project including systematic stream sediment sampling, geological mapping using Quickbird and ASTER imagery plus ground traversing, grid auger sampling, ground geophysics including gradient array and dipole-dipole IP, excavator trenching and drilling.

Reunion is already well established in Suriname as a result of its ongoing exploration at its Antino project with an established geological and field support personnel, the necessary field equipment, plus a dedicated assay laboratory and logistics facility in Paramaribo.

Mr. Adrian Fleming, a qualified person under NI 43-101, has reviewed the technical information contained in this press release. Mr. Fleming is the Project Manager for the Company's Antino Project.

Investor Relations

The Corporation is pleased to announce that Ms. Louise Quinn has been hired to assist the Corporation on an ongoing basis with Investor Relations activities and shareholder and media communications. Ms. Quinn will be located at the Corporation's office in Longueuil, Quebec, and will report to the President and CEO. In this position, Ms. Quinn's mandate will include increasing the public, shareholder and investor's awareness and interest in Reunion, as well as being a contact person to handle and address investor and shareholder inquiries.

Ms. Quinn has over 15 years experience in corporate communications, marketing and investor relations.

Forward Looking Statement

Some of the statements contained in this press release are forward-looking statements. Forward-looking statements are not historical facts and are subject to a number of risks and uncertainties beyond the Corporation's control, including statements regarding future plans and objectives of the Corporation, completion of transactions, raising sufficient financing to fund the planned work in a timely manner and on acceptable terms, changes in planned work resulting from weather, logistical, technical or other factors; potential mineralization and resources. Resource exploration, development and operations are highly speculative, characterized by a number of significant risks, which even a combination of careful evaluation, experience and knowledge may not eliminate, including, among other things, unprofitable efforts resulting not only from the failure to discover mineral resources but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. There can be no assurance that such statements will prove to be accurate and actual results could differ materially from those suggested by these forward-looking statements.

Additional information about the Corporation is available through regular filings and press releases on SEDAR ( and on the Corporation's website (

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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