Verbina Resources Inc.
TSX VENTURE : VUR

January 21, 2011 08:53 ET

Verbina Resources Inc. Announces Completion of Due Diligence on Banso and Muoso Mining Licenses (The "Licenses") in Ghana, West Africa Pursuant to Letter of Intent With Xtra-Gold Resources Corp.

TORONTO, ONTARIO--(Marketwire - Jan. 21, 2011) - Verbina Resources Inc. ("Verbina") (TSX VENTURE:VUR) announced on July 21, 2010 that it had signed a letter of intent with Xtra-Gold Resources Corp. ("Xtra") whereby Verbina, through an option agreement, may earn a 55-per-cent interest in Xtra's interest in all the mineral rights of its Banso and Muoso Exploration Concessions in Ghana subject to due diligence and regulatory approval. Subsequently, as part of the due diligence process, Xtra decided to apply for Mining Licenses on each of the Exploration Concessions. It was also agreed that Verbina would share the costs associated with Xtra's application for the Mining Licences together with any work that Xtra continued to perform on the property subsequent to July 21, 2010. The Mining Licenses have recently been approved and Verbina is now moving ahead to conclude the option with Xtra.

Verbina has now completed satisfactory due diligence and the transaction remains subject to TSXV approval. In order to acquire a 55-per-cent interest, Verbina shall complete the following:

  1. Remit cash payments to Xtra in the aggregate amount of $425,000 (U.S.) consisting of $100,000 (U.S.) upon receipt of TSXV approval (the "effective date") and a further $325,000 (U.S.) within 90 days of the effective date. These cash payments reflect an additional US$125,000 over the payments announced on July 21, 2010 which is attributed to Verbina's proportionate share of the costs of obtaining the Mining Leases and the cost of the continuing exploration work on the properties since July 21, 2010;

  2. Issue one million fully paid and non-assessable common shares of Verbina to Xtra-Gold upon the effective date;

  3. Incur a total of US$4.425-million in exploration expenditures on the concessions within five years of the effective date and the execution of the Formal Option Agreement. Exploration Expenditures of US$500,000 is to be incurred in the first year from the effective date and US$1-million in each year thereafter, except the final year in which Verbina will now be required to incur US$925,000 in exploration expenditures. Verbina shall have the right to accelerate the exploration expenditures at any time.

Verbina shall act as operator during the option period and, in the event Verbina exercises the option, a joint venture will be formed for the further exploration and development of the concessions.

Historical trenching results from the Muoso Mining Lease:

On January 13, 2009 an Xtra News release announced, among other things, the following Ankaase Trench highlights:

"Xtra-Gold Resources Corp. ('Xtra-Gold' or 'the Company') – 'XTGR' (OTCBB:NASD) is pleased to announce gold assay results from a scout trenching program carried out on its wholly-owned Ankaase Gold Trend Project, located in the Kibi – Winneba greenstone belt ("Kibi Gold Belt"), in Ghana, West Africa. Highlights from trenching presently restricted to the southern 1.4 km strike extent of the over 3.5 km long Ankaase gold-in-soil anomaly include channel sample intercepts of 1.75 grams per tonne (g/t) gold over 18 meters; 1.79 g/t gold over 24 meters; 4.73 g/t gold over 6 meters; and 2.08 g/t gold over 14 meters, including 6.52 g/t gold over 4 meters. This initial reconnaissance trenching program yielded very encouraging results and confirmed that the extensive Ankaase gold-in-soil trend is spatially associated with a typical "Ashanti" style shear zone setting developed proximal to a Birimian metavolcanic – metasediment contact with associated Belt granitoids.

The Ankaase Gold Trend Project lies at the northern extremity of the Kibi Gold Belt, on the Muoso Concession, approximately 19 km northeast of the Company's flagship Kibi Gold Trend Project located on the Apapam Concession, on which an extensive system of classic granitoid – hosted gold mineralization is currently being defined by Xtra-Gold (January 8, 2009 Press Release)…."

About Verbina:

Verbina is a mineral exploration company whose long-term objective is to build a diversified company focused on the acquisition, exploration and development of mineral properties. Additional information about the Company is available for review on SEDAR at www.sedar.com.

This news release contains certain forward looking statements which are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected. Richmond does not undertake any obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

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

Contact Information

  • Verbina Resources Inc.
    Paul Zyla
    President
    (416) 366-4227
    or
    Verbina Resources Inc.
    Kevin Swanborough
    Chief Financial Officer
    (416) 366-4227