Gregory Isenor, P.Geo., President and CEO of Merrex Gold Inc. announces that Merrex has closed its Private Placement and Option Agreement with IAMGOLD Corporation for 50% of Merrex’s Siribaya Gold Project in West Mali, Africa.
“We are pleased to have increased our control of Siribaya to 100% and to have closed our agreement with IAMGOLD” said Merrex President Gregory Isenor. “As previously announced, as our Siribaya Gold Project developed into an advanced exploration project, IAMGOLD was at the top of our list of potential partners. IAMGOLD is making a financial investment in Siribaya which, coupled with IAMGOLD’s exceptional gold exploration technical expertise, means that our Siribaya Gold Project will continue to advance in spite of the difficult financial times facing junior exploration companies. We expect that IAMGOLD will be a terrific partner and we are looking forward to working with them.”
$10,500,000 Option for 50% of Siribaya
Merrex has agreed to option to IAMGOLD up to a 50% interest in Merrex’s wholly owned Siribaya Gold Project. The Option Agreement with IAMGOLD provides that IAMGOLD may incur up to CDN$10.5 million over 4 years to earn up to a 50% interest in Siribaya.
The Option Agreement provides that IAMGOLD will incur exploration expenditures of $3.0 million in the first year and aggregate expenditures totalling not less than $2.5 million in each of the three succeeding years to earn its 50% interest. The interest to be earned will vest 30% after expenditures of $8.0 million and a further 20% after the final expenditure of $2.5 million.
The Option Agreement also provides that Merrex will be the initial Project Operator. After two years or exploration expenditures of $5.5 million IAMGOLD can elect to be the Project Operator. The project exploration programs will be determined by a joint management committee with equal representation, subject to final program approval by IAMGOLD.
The management committee will meet early in the New Year to finalize the 2009 exploration program. The 2009 exploration program will begin as soon thereafter as is practicable under the direction of the Project Operator.
$1,500,000 Private Placement
Merrex has concluded a private placement with IAMGOLD pursuant to which IAMGOLD subscribed for 4,285,714 units at $0.35 per unit for net proceeds of CAN$1.5 million. Each unit is comprised of one share and one twelve-month share purchase warrant exercisable at $0.45 per share. The Units are subject to a four month investment hold period.
Acquisition of 5% Free Carried Interest Royalty
As part of its Option Agreement with IAMGOLD Merrex acquired an outstanding 5% Free Carried Interest Royalty from Touba Mining SARL for 2,000,000 common shares at a deemed issue price of $0.25 per share.
This acquisition increased Merrex’s control of Siribaya to 100%. The project is subject to a carried production royalty of 10% to the Mali government, an optional 10% participating interest to the Mali government and a 5% Net Profit Production Royalty to Touba Mining SARL.
Merrex’s principal projects are its Siribaya Gold Project, an advanced exploration project in Mali (West Africa), and its Jubilee Zinc Deposit in Cape Breton, Nova Scotia.
Merrex Gold is a mineral resource exploration company focusing on gold exploration in West Mali, Turkey and in the Red Lake area of Ontario and zinc exploration in Cape Breton, Nova Scotia. Merrex has a solid organization of people and projects enabling aggressive exploration, discovery, and growth.