Ryan Gold Corp.

Ryan Gold Corp.

September 27, 2010 12:00 ET

Valdez Gold Announces Proposed Acquisition of Ryan Gold

TORONTO, ONTARIO--(Marketwire - Sept. 27, 2010) - Valdez Gold Inc. (TSX VENTURE:VAZ)("Valdez" or the "Company") announces that it has signed a non-binding term sheet with Ryan Gold Inc. ("Ryan Gold") pursuant to which the Company and Ryan Gold have agreed to enter into good faith negotiations as a result of which, if successfully concluded, will result in Valdez acquiring a 100% indirect interest in the 269 claim unit Ida Oro property located 90 km east of Dawson City, Yukon (the "Ida Oro Property") through the purchase by the Company of all of the equity of Ryan Gold from the existing security holders of Ryan Gold (the "Sellers"). As well, Ryan Gold currently has five other exploration properties located east and west of Dawson City. These properties have been staked to cover prospective geology in areas with anomalous gold stream sediment samples. In total, Ryan Gold has a 100% interest in or an option to earn a 100% interest in six properties composed of 3,117 claim units, which cover approximately 623 square kilometres of ground.

Ryan Gold is a privately owned gold exploration company incorporated pursuant to the laws of British Columbia, focused on making a new discovery in the Yukon Territory of Canada. Ryan Gold's principal assets consist of the Ida Oro Property and cash. Ryan Gold is working closely with technical consultant Shawn Ryan to acquire new properties and explore the properties included in this transaction. The Ida Oro Property and four of the other exploration properties have been acquired or optioned by Ryan Gold from Shawn Ryan. These properties have been selected to build on Shawn's past achievements in the White Gold District. In the White Gold District Shawn Ryan is the underlying vendor of both Kinross Gold Corp.'s White Gold property (formerly owned by Underworld Resources Inc.) and Kaminak Gold Corporation`s Coffee property.

Ryan Gold recently completed an airborne magnetic and radiometric survey over the entire Ida Oro Property. In addition to the airborne survey 5,658 soil samples were collected this summer on the Ida Oro Property. A technical report in compliance with National Instrument 43-101 of the Canadian Securities Administrators will be prepared and filed on SEDAR once the results of the program have been received. 

The Company contemplates the completion of a consolidation of its issued and outstanding shares on the basis of one post-consolidation common share for each 3.5 pre-consolidation common shares. The Company will issue one post-consolidation common share for each common share of Ryan Gold held by the Sellers. Each convertible security of Ryan Gold that is not exercised before completion of the acquisition will thereafter be exercisable for post-consolidation common shares of the Company. The exchange ratio is based on Ryan Gold having 48,880,000 common shares outstanding on a fully-diluted basis and the Company having 26,487,316 common shares outstanding on a fully-diluted basis. 

After completion of the acquisition former shareholders of the Company will hold approximately 35.2% of the issued and outstanding shares of the Company calculated on a fully diluted basis and former shareholders of Ryan Gold (i.e. the Sellers) will hold approximately 64.8% of the issued and outstanding shares of the Company calculated on a fully diluted basis.

On closing of the acquisition, David Schmidt, the current President and Chief Executive Officer of Ryan Gold, will be appointed to the board of directors of the Company and as the Chief Executive Officer of the Company. Mr. Schmidt completed his bachelor of applied science (mining) at the University of British Columbia in May, 2000, and since then has been working as a self-employed consultant to mineral exploration companies. He assists with financings, corporate and financial disclosure and corporate development. Mr. Schmidt is also currently a director and the president of Newmac Resources Inc., a director and chief executive officer of GFE Capital Corp. and Oceanside Capital Corp., and a director of Waymar Resources Ltd.

The acquisition is being negotiated at arm's length, although certain of the majority shareholders of the Company own 29% of a corporation that owns less than 10% of the issued and outstanding shares of Ryan Gold. No differing collateral benefit will be obtained by these Sellers as compared to the other shareholders of Ryan Gold. 

Company management believes that the acquisition of Ryan Gold's properties creates an aggressive new Yukon-focused exploration company. The acquisition combines the Company's technical expertise and project evaluation skills with Ryan Gold's property package and prospecting capabilities. As well, assuming the exercise of all Ryan Gold warrants, the Company will have approximately $9 million in cash following the transaction. The Company looks forward to developing a strong exploration company and building on the past successes of Shawn Ryan's prospecting endeavours.

Completion of the transaction is subject to certain conditions, including without limitation, satisfactory mutual due diligence investigations, execution of a definitive agreement (containing customary representations, warranties, indemnifications and conditions), receipt of requisite regulatory approvals, receipt of material third party consents and the completion by the Company of the consolidation on the terms set forth above. It is expected that trading in shares of Valdez will be halted until the TSXV has completed its preliminary review of the transaction.

PowerOne Capital Markets Limited is acting as an advisor to Ryan Gold in connection with the transaction.

It is anticipated that the definitive agreement will be executed and delivered on or before November 15, 2010, failing which the parties will cease their negotiations and the non-binding term sheet will cease to be reflective of the parties' intentions.

Valdez Profile

Valdez is earning an interest in the Flume Property located near Dawson City, Yukon and the Bluff Project on the Seward Peninsula in Alaska. Valdez has recently optioned its Los Jarros and Jarros Norte properties to Gammon Gold Inc. (see press release dated August 31, 2010). 

This press release contains forward-looking statements within the meaning of applicable securities legislation. Such statements include, without limitation, statements regarding the future results of operations, performance and achievements of the Company, including potential property acquisitions, the timing, content, cost and results of proposed work programs, the discovery and delineation of mineral deposits/resources/reserves, geological interpretations, proposed production rates, potential mineral recovery processes and rates, business and financing plans and business trends. Although the Company believes that such statements are reasonable, it can give no assurances that such expectations will prove to be correct. Forward-looking statements are typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that forward-looking statements by the Company are not guarantees of future results or performance, and that actual results may differ materially from those in forward-looking statements as a result of various factors, including, but not limited to, variations in the nature, quality and quantity of any mineral deposits that may be located, significant downward variations in the market price of any mineral that may be produced, the Company's inability to obtain any necessary permits, consents or authorizations required for its activities, to produce minerals from its properties successfully or profitability, to continue its projected growth, to raise the necessary capital or to be fully able to implement its business strategies. All of the Company's public disclosure filings may be accessed via www.sedar.com and readers are urged to review these materials, including any technical reports filed with respect to the Company's mineral properties. This press release is not, and is not to be construed in any way as, an offer to buy or sell securities in the United States.

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

  • Valdez Gold Inc.
    Michael Skead
    President & CEO