TORONTO, ONTARIO -- (Marketwire) -- 01/31/13 -- Darnley Bay Resources Limited (TSX VENTURE: DBL) (the "Company" or "Darnley Bay") is pleased to announce that it intends to complete a non-brokered private placement of up to 13,000,000 units at a price of $0.05 per unit, for aggregate gross proceeds of up to $650,000. Each unit will consist of one common share in the capital of the Company (a "Common Share") plus one warrant. Each warrant will entitle the holder thereof to purchase one Common Share for a period of three years from the date of issuance of the warrants at an exercise price of $0.10 per Common Share. The private placement is being made on a best-efforts basis and is subject to regulatory approval.
Darnley Bay is also pleased to announce that the Board of Directors has appointed Jamie Levy as President, Chief Executive Officer and a Director of the Company. Mr. Levy has been involved in finance over a 20-year career, beginning as a financial advisor and more recently as Vice-President of Pinetree Capital, an investment and venture capital firm focused on investing in early stage micro and small-cap resource companies.
The Company further announces that Kerry Knoll, a Director of the Company since 2009, has been appointed to the position of non-executive Chairman of the Board of Directors. Mr. Knoll is well known in the mining industry and is currently non-executive Chairman of Canada Lithium Corp. which is completing construction of Canada's only lithium mine near Val d'Or, Quebec. He is also non-executive co-chairman of Stonegate Agricom Ltd. which is advancing a phosphate project in Idaho into production. Previously, Mr. Knoll was co-founder of a number of successful mining companies, including Wheaton River Minerals Ltd., Thompson Creek Metals Company and Glencairn Gold Corporation.
The funds from the private placement will be used to make the final payment (with interest) to the Inuvialuit Regional Corporation under the mineral concession agreement signed December 22, 2009, as well as property access fees, and for general working capital. Once the payment has been made the Company must incur $242,000 in exploration expenditures in 2013 on the property and a further $1,000,000 per year thereafter until a total of $13,000,000 has been spent. A total of $6,758,000 has been spent under the 2009 agreement.
The Darnley Bay property hosts North America's strongest isolated gravity anomaly which has been favourably compared by the Geological Survey of Canada (the "GSC") to other prominent gravity anomalies such as those at the prolific mining camps of Noril'sk in Russia and Sudbury Basin in Ontario. It is located near Paulatuk, Northwest Territories on the Arctic Coast. The Darnley Bay anomaly is larger and stronger than any of these comparatives by a wide margin, measuring100 kilometres long north to south and about 80 kilometres wide. The GSC discovered the anomaly in 1969 and its source has never been explained. The Company has 100% control of its exploration and potential development subject to certain back-in and other rights of the Inuvialuit Regional Corporation on whose land it occurs.
Extensive geophysical work by the Company has identified 41 gravity, magnetic and electromagnetic targets widely distributed over the extent of the anomaly, in addition to larger zones of exploration significance. Previous attempts to drill the property have been hampered by difficult overburden and other ground conditions, and the Company intends to consult drilling specialists in order to overcome this in the future. A 43-101 report prepared by Stephen Reford, P. Eng., and filed March, 2012 recommends an exploration and drilling strategy to fully test the base and precious metal potential of the property at an estimated cost of $5,200,000. The Company continues to discuss various financing and joint venture proposals in order to undertake this work.
Darnley Bay also announces that 2,500,000 options to purchase Common Shares at a price of $0.05 per Common Share have been issued to directors, expiring on January 30, 2018.
This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that Darnley Bay expects are forward-looking statements. Although Darnley Bay believes the expectations expressed in such statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the statements. There are certain factors that could cause actual results to differ materially from those in forward-looking statements. These include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. For more information on Darnley Bay, investors should review registered filings at www.sedar.com.
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.
Darnley Bay Resources Limited
President and CEO
(416) 862-7889 (FAX)
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