About the Transaction
The "Americana Transaction"
Malbex has completed a definitive agreement with the shareholders of Americana de Explotaciones Mineras S.R.L. ("Americana"), a Dominican private company, to acquire all of the issued and outstanding shares in the capital of Americana for a purchase price of RD$100,000 Dominican pesos (the "Americana Transaction"). Americana has an application pending for the Los Guandules Verdes concession. Malbex expects that this licence will be granted within the next six weeks.
The "Unigold Agreement"
The shareholders of Americana had previously granted Unigold the option to acquire all of the shares in Americana, or the Property licence, for nominal consideration. In connection with the acquisition of Americana, Malbex has entered into an agreement with Unigold (the "Unigold Agreement" and together with the Americana Transaction, the "Transaction") to cancel the outstanding option. In exchange for Unigold agreeing to consent to the acquisition by Malbex of all of the outstanding shares of Americana and to cancel the option, Malbex has agreed to issue to Unigold 13,000,000 common shares of Malbex and grant Unigold a 2% net smelter return royalty on the Property. Malbex can buy back half of the net smelter return royalty for $1 million (leaving Unigold with a royalty equal to 1% of net smelter returns). If Malbex identifies at least 2 million ounces of measured and/or indicated resources (based on a NI43-101 report) within the first 5 year term of the exploration concession, then Malbex must issue an additional 5,000,000 common shares to Unigold. All such common shares of Malbex which may be issued to Unigold pursuant to the Unigold Agreement will be subject to a hold period of four months from the time of the issue of such common shares.
The Unigold Agreement is subject to the granting of the Los Guandules Verdes concession licence by the Dominican government, and subject to final TSX-V approval.
The consideration to be paid pursuant to the Transaction, without considering the royalty or the "top-up" shares based on identified measured and/or indicated resources, is equal to approximately C$1.4 million based on the 20-day VWAP of Malbex shares prior to this announcement. Approximately $340,000 has been spent by Unigold to date on the Property in acquisition, geochemical and mapping campaigns. Management of Malbex considers the Property to be highly prospective for gold and copper mineralization based upon the close proximity to recent discoveries and the existence of mapped outcrops of Tireo Group rocks along strike from known mineralization. Further, the Property contains known geophysical and geochemical anomalies that will be scheduled for follow-up work as soon as possible. Closing of both the Americana Transaction and the Unigold Agreement are conditional upon receipt of shareholder approval of the Transaction and the consideration payable by Malbex in connection therewith, all of which is expected to be tabled for consideration and, if deemed appropriate, approval by shareholders at Malbex's upcoming annual and special shareholders meeting, which is expected to be scheduled in March, 2013.
The Transaction is considered to be a "non-arm's length" transaction within the meaning of the policies of the TSX-V due to the fact that Mr. Joe Hamilton is a common director of both Malbex and Unigold.
Malbex is a gold exploration company led by experienced management and directors with projects in Argentina. In April 2010, Malbex made a near-surface, gold- silver oxide discovery at Del Carmen, its lead project in Argentina. In September 2011, Malbex released the first-ever inferred mineral resource estimate calculated in accordance with National Instrument 43-101 for the Rojo Grande deposit at Del Carmen which measured 25.4 million tonnes grading 1.00 g/t gold and 13.3 g/t silver for 816,600 ounces of contained gold and 10.9 million ounces of contained silver. Heap-leach metallurgical recoveries from column tests were estimated between 75% and 85%. The Del Carmen project is located in the El Indio Gold Belt, which contains more than 35 million ounces of gold in current reserves and past production, including Barrick's Veladero mine and Pascua-Lama project. Preliminary economic assessments are underway for this project and an updated resource is expected to be published in by the end of June 2013. For more information, please visit www.malbex.ca.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain information that may constitute "forward-looking information" under applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements about strategic plans, licence renewals and granting of concessions, spending commitments, future operations, results of exploration, anticipated financial results, future work programs, capital expenditures and objectives. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information, including the risks identified in the Company's annual information form under the heading "Risk Factors". There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. All forward-looking information contained in this press release is given as of the date hereof and is based upon the opinions and estimates of management and information available to management as at the date hereof. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
To view the Figures associated with this press release, please visit the following link: http://media3.marketwire.com/docs/MBG-Figures.pdf.
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.
Malbex Resources Inc.
President and Chief Executive Officer
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