NEWS RELEASE TRANSMITTED BY Marketwire
FOR:
Gowest Amalgamated Resources Ltd.
TSX VENTURE SYMBOL:
GWA
Gowest to Acquire New Texmont's 50% Interest in Frankfield Project
SEP 29, 2008 - 09:00 ET
TORONTO, ONTARIO--(Marketwire - Sept. 29, 2008) - Gowest Amalgamated Resources Ltd. (TSX VENTURE:GWA) ("Gowest" or the "Company") is pleased to announce that it has entered into a letter of intent with New Texmont Explorations Ltd. ("New Texmont") pursuant to which it will acquire New Texmont's 50% interest in the Frankfield gold project as well as all of New Texmont's additional land holdings in the Tully area bordering the Frankfield project. Following the completion of the acquisition, Gowest will hold a 100% interest in the Frankfield project. The Frankfield project is located in Tully Township near Timmins, Ontario and has an inferred resource of approximately 500,000 oz of gold contained in approximately 2.7 million tonnes grading approximately 6.5 g/t. It is anticipated that the acquisition will be completed prior to November 30, 2008.
In consideration for New Texmont's 50% interest in the Frankfield project, the Company will issue 15,000,000 common shares to New Texmont and also grant New Texmont a sliding scale Net Smelter Royalty (the "NSR") equal to 1.00% at gold prices less than US$950.00 per ounce and 1.50% at gold prices equal to or greater than US$950.00 per ounce. The Company may purchase the NSR at anytime upon payment of $1,000,000 for each half percent (0.5%) of the NSR and will have a right of first refusal on any offer to purchase the NSR made by a third party. The Company will also make a onetime payment to New Texmont equal to the greater of $500,000 or 2,500,000 common shares upon a positive decision by the Company to place a mine into production.
Greg Romain, President and CEO of Gowest, stated: "This offer will give our shareholders full ownership of a first class project, located in a mining friendly environment and will allow us to fully define the resource which extends outside the current Frankfield boundaries". Mr. Romain went on to say: "We are finalizing a drill program that should begin in the last quarter of 2008 to continue defining the resource".
The board of directors of the Gowest has approved the acquisition subject to the finalization of a definitive agreement and the receipt of requisite shareholder and regulatory approvals, including the approval of the TSX Venture Exchange. Following the completion of the proposed transaction, New Texmont will hold approximately 37.7% of the issued and outstanding common shares of the Company and will be deemed to be a "control person" under applicable securities legislation and the policies of the TSX Venture Exchange. The completion of the transaction is subject to shareholder approval pursuant to the policies of the TSX Venture Exchange.
The technical information contained in this press release has been reviewed and approved by Ronald J. Bradshaw, P. Eng., a "qualified person" as defined by National Instrument 43 - 101 - "Standards of Disclosure for Mineral Projects". Mr. Bradshaw is a director of the Company.
Completion of the proposed acquisition is subject to a number of conditions, including but not limited to, TSX Venture Exchange acceptance and shareholder approval. The proposed acquisition cannot close until required shareholder approval is obtained. There can be no assurance that the acquisition will be completed as proposed or at all. Trading in the securities of the Company should be considered highly speculative.
Investors are cautioned that mineral resources which are not mineral reserves do not have demonstrated economic viability.
This press release contains forward looking statements based on assumptions, uncertainties and management's best estimates of future events, including regarding the completion of the proposed acquisition. Actual results may differ materially from those currently anticipated. Investors are cautioned that forward looking statements involve risks and uncertainties. Important factors that could cause actual results to differ materially from those expressed or implied by such forward looking statements are detailed from time to time in the Company's periodic reports filed with securities regulatory authorities.
The TSX Venture Exchange has in no way passed upon the merits of the proposed acquisition and has neither approved nor disapproved the contents of this press release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Gowest Amalgamated Resources Ltd.
Gregory Romain
President & CEO
(416) 840-9912
Website: www.gowestamalgamated.com
