Sargold Resource Corporation

Sargold Resource Corporation

October 30, 2006 14:58 ET

Sargold Restructures Monte Ollasteddu Agreement With Gold Fields

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 30, 2006) - Sargold Resource Corporation (TSX VENTURE:SRG) ("Sargold" or the "Company") announces it has signed a letter of intent with Gold Fields Venezuela Holding B.V. ("Gold Fields"), an indirect subsidiary of Gold Fields Limited, whereby the Company will acquire Gold Fields 15% interest in the Monte Ollasteddu project in Sardinia, Italy ("Property"). As consideration for the purchase, the Company will issue to Gold Fields common shares with a value of $500,000 Canadian in three installments: one third on signing a formal agreement ("Closing Date"), based on a share price of $0.20 per share (833,333 shares), and one third on each of the first and second anniversaries of the Closing Date, based on a share price which is the average of the preceding 30 trading days. Gold Fields will retain a right to acquire an undivided 60% interest in the Property, which will be triggered when exploration work programs undertaken by Sargold have defined a minimum NI 43-101 compliant, measured and indicated resource estimate of 3.5 million ounces of gold.

In addition, Gold Fields has agreed to subscribe for a private placement for 5,000,000 common shares of Sargold at a price of $0.25 per share, for proceeds of $1,250,000, which will be used for exploration work expenditures and working capital. The formal agreement will supersede the existing Joint Venture Agreement, which was assumed when Sargold acquired a 75% interest in SGM Ricerche SpA ("Ricerche") from Medoro Resources Ltd. ("Medoro") as announced on August 22, 2006.

The transactions are subject to the approvals of Gold Fields' Executive Committee, Sargold's Board of Directors and regulatory bodies.

ABOUT SARGOLD RESOURCE CORP. - Sargold controls the largest precious metals exploration and exploitation land area in Sardinia, Italy. The Company's properties and projects range from the mine and full processing plant at Furtei, to advanced exploration properties with historical gold resources across the island. Sargold owns 90% of Sardinia Gold Mining ("SGM"), the operating company based in Furtei. The island of Sardinia, located approximately 150 kilometers west of Rome, is the second largest in the Mediterranean Sea covering over 24,000 square kilometers.


Richard W. Warke, President

FORWARD-LOOKING STATEMENTS - The statements that are not historical facts are forward-looking statements involving known and unknown risks and uncertainties that could cause actual results to vary materially from targeted results. Such risks and uncertainties include those described from time to time in the Company's latest annual report and management discussion and analysis. The Company assumes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this News Release.

Contact Information

  • Sargold Resource Corporation
    Marlo Hamer-Jackson
    Investor Relations Manager
    (604) 687-1717
    (604) 687-1715 (FAX)