VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 06/28/13 -- Southern Arc Minerals Inc. (TSX VENTURE: SA)(OTCQX: SOACF) ("Southern Arc" or "the Company") is pleased to announce that it has entered into a strategic investment agreement with Eagle Hill Exploration Corporation ("Eagle Hill"), (TSX VENTURE: EAG) pursuant to which Southern Arc will acquire a 26.2% interest in Eagle Hill. Under the agreement with Eagle Hill, Southern Arc will invest $7.3 million to acquire 97,333,333 units of Eagle Hill by way of private placement at a price of $0.075 per share. Each unit comprises a common share of Eagle Hill and a half share purchase warrant, with each whole warrant entitling the holder to acquire a further common share of Eagle Hill at a price of $0.10 for a period of four years.
Dundee Corporation (TSX: DC.A) ("Dundee") will also participate in the private placement by investing $4.7 million to acquire 62,666,667 units of Eagle Hill, thereby increasing its ownership of Eagle Hill from 18.8% to 26.2%.
"We have been involved in the development of Eagle Hill's Windfall Lake Project and the surrounding gold camp for approximately 20 years and are excited to see the project getting closer to being a producer," said Ned Goodman, President and CEO of Dundee Corporation. "We are excited to continue to support Eagle Hill and believe the high-grade Windfall Lake mineralization has very good potential to grow well beyond the current resource."
Southern Arc's Chairman and CEO, John Proust, stated: "This new Canadian investment is consistent with Southern Arc's previously announced strategy to diversify, protect and promote shareholder interests through participation in advanced-stage gold projects in favourable jurisdictions outside of Indonesia. Windfall Lake is a strategic addition to our project portfolio that we believe can be rapidly advanced.
"The Southern Arc and Dundee partnership will provide the financial strength, expertise and leadership to unlock the value of this property," continued Mr. Proust. "Commencing in September 2013, over a 12 to 18 month period Eagle Hill will execute a major new drilling program focused on extending the resource base at Windfall Lake and upgrading the status of the Inferred Resources."
The board of Eagle Hill will be reconstituted on closing of the transaction, anticipated to occur on or about August 15, 2013, to include two directors appointed by Southern Arc, two appointed by Dundee, and two appointed by Eagle Hill.
With this investment and concurrent transactions, Eagle Hill will own 100% of the Windfall Lake Gold Deposit, which comprises 2,002 hectares in the Abitibi region of Quebec. The Windfall Lake Gold Deposit is located 190 km northeast of Val d'Or, Quebec, a highly favourable jurisdiction for exploration and mining. The greenstone belts of the Abitibi region constitute one of the most prolific gold-producing regions in the world, having produced over 170 million ounces of gold to date. The project is easily accessible by paved highways and all-weather gravel roads. To date 641 diamond drill holes totaling 162,097 metres have been completed on the property, of which 356 (105,340 metres) were considered for the geological and resource modelling.
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