Sonora Gold & Silver Corp.

Sonora Gold & Silver Corp.

September 22, 2010 09:30 ET

Sonora Announces: Second Gold Property in Tanzania, Private Placement, Appointment of New Director, Grant of Options

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 22, 2010) - Sonora Gold & Silver Corp. (TSX VENTURE:SOC) ("Sonora" or the "Company") is pleased to announce an agreement for the option to purchase (the "Option Agreement") through the Company's wholly-owned Tanzania subsidiary, 100% of the 10 square km Negese Mining Permit (the "Negese Property"). The Negese Property is located in the Kilindi District of Northeastern Tanzania and is being optioned from an arms' length private Tanzanian corporation (the "Vendor"). The Negese Property was selected on the basis of growing artisanal mining activity in the area, including processing of alluvial, colluvial and bedrock gold mineralized material including pits and underground workings to a depth of 30 meters. The geological setting is notably similar to the rapidly developing Magambazi discovery by Canaco Resources (TSXV: CAN).

Gold mineralized zones in the form of discrete high grade lodes and a broad zone of disseminated sulphides hosted by garnet-silica altered amphibolite in a corridor defined by artisanal workings and outcropping mineralized material are known to exist along a minimum of 1600 meters of strike and across from 300 to 500 meters. The host envelope and the mineralized zones dip at 15 to 25 degrees and the true width of the target zone is approximately 200 to 250 meters. The area is traversed by gravel roads and the topography is moderate. The project can be advanced rapidly without significant infrastructure enhancements.

Reconnaissance mapping over the area shows structural repeats and additional strike extensions which will be evaluated as part of the forthcoming work program. The Company completed an orientation sampling of the target zones in a field review and results from the rock samples are pending. On the basis of this work, and the analytical results, the Company is planning a sequenced exploration program including geological mapping, soil and rock geochemistry and drilling.

The terms of the option on the Negese Property consist of:

  • US$5,000 due on signing, US$25,000 due within 30 days;
  • The issue of 300,000 shares of the Company to the Vendor upon completion of due diligence review and final TSX Venture Exchange approval;
  • Monthly payment to the Vendor of US$2,000 increasing to $5,000 over time to maintain the option up to a maximum of four years;
  • A lump sum payment of US$1,300,000, payable at any time to exercise the Option in full for 100% ownership of the Negese Property, subject to a 2% Net Smelter Return Royalty.

Further to the announcement of the Negese Option Agreement, the Company will conduct a non-brokered private placement of units, priced at $0.25 per unit, consisting of 5,000,000 units, each unit consisting of one common share and one-half (1/2) of one share purchase warrant for gross proceeds of CDN$1,250,000. Each whole warrant will be exercisable at a price of $0.50 for a period of two years from the date of closing. The proceeds of the private placement will be allocated towards transaction costs for the acquisition and for the exploration and development of the Negese Project as well as for general working capital. This financing is integral to and forms part and parcel of the acquisition of the Negese property.

The Company is also very pleased to announce the appointment of Mr. Paul Matysek to the Board of Directors. Mr. Matysek is currently the President and Chief Executive Officer of Potash One Inc. where he is leading the company to feasibility stage on its Legacy Project in Saskatchewan. He was a founder and CEO of Energy Metals Corporation, which he helped grow from a market capitalization of $10 million to acquisition by a larger uranium producer for $1.8 billion. Since 1999, he has been involved in obtaining over $200 million of exploration and development financing for a number of significant precious metal and base-metal properties. Mr. Matysek is a geologist/geochemist and has served in an Executive or Director capacity, for several exploration and development companies including: First Quantum Minerals Ltd., First Majestic Resource Corp., Energy Metals Corp. and Lithium One Inc. He brings to the Company a wealth of technical and financial experience as well as over 35 years of exploration and development experience. "We are very honored to have a man of Mr. Matysek's caliber join Sonora," states company President, Ken Churchill.

The Company has also granted a total of 900,000 incentive stock options at a price of $0.25 per share, to certain directors and officers of the Company. The options are exercisable for up to three years from the date of grant.

The technical details of this announcement and the field sampling, pertaining to the Negese Property, were completed under the supervision of David Bending, M.Sc., P.Geo., an independent Qualified Person pursuant to the standards of National Instrument 43-101.

On behalf of the Board of Directors.

Sonora Gold & Silver Corp.

Ken Churchill, President, Chief Executive Officer and Director

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 release.

Contact Information

  • Sonora Gold & Silver Corp.
    Ken Churchill
    President, Chief Executive Officer and Director