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Unigold Announces Sale of El Carrizal Option to Terreno Resources Corp.

Jan 23 2013 12:00AM

Marketwire

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TORONTO, ONTARIO -- (Marketwire) -- 01/23/13 -- Unigold Inc. ("Unigold" or the "Company") (TSX VENTURE: UGD) is pleased to announce that it has entered into an agreement (the "Agreement") with Terreno Resources Corp. ("Terreno") (TSX VENTURE: TNO) to sell its option to acquire 100% of the El Carrizal concession in the Dominican Republic. The El Carrizal concession covers 13,150 hectares and lies between Unigold's western Neita Concession and the eastern Sabaneta Concession and is contiguous with both.

As consideration for the purchase of the option, Terreno will issue to Unigold a total of 11.5-million common shares and make cash payments totaling $1,000,000. An initial $50,000 cash payment is due immediately with the 11.5-million common share issuance and a further cash payment of $250,000 is due on the exercise of the option by Terreno. Two further cash payments of $350,000 will be due on the 12 and 24 month anniversary of the date Terreno exercises the option. In addition, Unigold will be granted a 2% net smelter returns royalty, of which half (leaving Unigold with a royalty equal to 1% of net smelter returns) can be repurchased by Terreno for USD 1,000,000. Unigold will be entitled to receive an additional 5,000,000 common shares of Terreno in the event that 2,000,000 ounces of gold are delineated on the property by Terreno on a National Instrument 43-101 compliant basis, in any category of resource. All such common shares of Terreno which may be issued to Unigold pursuant to the Agreement will be subject to a hold period which will run for a period of four months from the time of the issue of such common shares. The transaction involves non-arm's length parties. Terreno is considered a non-arm's length party of Unigold as a result of the fact that Pinetree Capital Ltd. holds greater than 10% of the securities of each of Unigold and Terreno and is thus an "insider" of both companies. The transaction is subject to the final approval of the TSX Venture Exchange, which may include Terreno obtaining the approval of its shareholders.

Unigold's Board of Directors has decided to sell the option on the El Carrizal concession as it is a non-core holding. "This deal is strategic for Unigold and allows our shareholders to participate through the 11.5-million shareholding in any discovery at El Carrizal. We are also very pleased to have helped attract a new exploration company, Terreno, to the Dominican Republic," comments Andrew Cheatle, President and CEO Unigold. "Unigold is appropriately focused on exploring and developing the over 21 identified high quality and high priority targets on Neita, including the Candelones and Candelones Extension discoveries."

Premier Mining Destination - Dominican Republic

The Dominican Republic is host to world-class gold and base metal mines and deposits. The government supports development and exploration in the mining sector. In addition, the country has well-established mining and environmental laws. Unigold's wholly-owned flagship property, Neita, is compliant with all mineral and environmental requirements and work is conducted to internationally accepted environmental and social standards. The Neita concession exploration license was renewed in 2012 and is in good standing.

Unigold is well-funded with approximately $8.0-million in cash.

About Unigold Inc. - Discovering Gold in the Caribbean

Unigold is a Canadian based mineral exploration company traded on the TSX Venture Exchange under the symbol UGD, focused primarily on exploring and developing its gold assets in the Dominican Republic.

For further information, please visit www.unigoldinc.com.

Forward-looking Statements

Certain statements contained in this document, including statements regarding events and financial trends that may affect our future operating results, financial position and cash flows, may constitute forward-looking statements within the meaning of the federal securities laws. These statements are based on our assumptions and estimates and are subject to risk and uncertainties. You can identify these forward-looking statements by the use of words like "strategy", "expects", "plans", "believes", "will", "estimates", "intends", "projects", "goals", "targets", and other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts. We wish to caution you that such statements contained are just predictions or opinions and that actual events or results may differ materially. The forward-looking statements contained in this document are made as of the date hereof and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ materially from those projected in the forward-looking statements. Where applicable, we claim the protection of the safe harbour for forward-looking statements provided by the (United States) Private Securities Litigation Reform Act of 1995.

Neither 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.



Contacts:
Unigold Inc.
Mr. Andrew M. Cheatle, P.Geo
President & CEO
416.866.8157
acheatle@unigoldinc.com

Unigold Inc.
Ms. Amanda Dillon
Investor Relations
416.866.8157
adillon@unigoldinc.com
www.unigoldinc.com





Source: Marketwire


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