Frontline Gold Signs Letter of Intent with UC Resources Limited on the Red Lake Properties
Toronto, Ontario--(Newsfile Corp. - June 2, 2014) - Frontline Gold Corporation (TSXV: FGC) ("Frontline" or the "Company") is pleased to announce that it has signed a Letter of Intent ("LOI") with UC Resources Ltd. ("UC"), whereby UC has the exclusive right to negotiate to acquire Frontline's 100% undivided working interest in the Red Lake gold claims (the "Properties").
Upon execution of the LOI, UC shall issue to Frontline 100,000 shares of UC as a good faith non-refundable deposit and in consideration for which UC shall have exclusive negotiating rights in respect of the Properties. UC Resources will have 45 days to perform its due diligence. Should a definitive agreement be reached with UC the following principal terms of the LOI will apply:
| i. | Upon execution of definitive agreement and on the approval of the Toronto Stock Exchange (the "TSX-V"), within 45 days, UC shall issue to Frontline 600,000 shares of UC and CDN$15,000.00 cash; and | |
| ii. | UC shall pay to the Frontline a royalty in an amount equal to one point five percent (1.5%) of the net smelter return ("NSR") derived from operations on Red Lake. Frontline will grant to UC the exclusive option (the "Buy-Out") to purchase 1 percent of the NSR for one million ($1,000,000) dollars. | |
The proposed transaction is subject to a number of conditions, including but not limited to, applicable regulatory approval, and the execution of a definitive agreement. The parties have agreed that a definitive agreement will be executed within 90 days. There can be no assurance that the proposed transaction will be completed.
Frontline's Properties, located in the Red Lake Gold Camp, consists of 5 properties consisting of 13 claims totaling approximately 6,000 ha. The geological environment is comparable to many prolific projects, such as Goldcorp's Red Lake Mine. Frontline's past prospecting programs in 2010 and 2011 focused on evaluating and expanding the known gold showings on four of the claim groups Shabumeni/East Swain, Skinner, Woman River and Shambumeni River. In a September 2010 press release Frontline announced that Red Lake assay results yielded grab samples grading up to 4.4 g/t Au, 6.8 g/t Au, 13.5 g/t Au, 19.7 g/t Au. The Skinner Claim is contiguous to Sabina Gold and Silver's Golden Sidewalk Property which includes historic Bathhurst Mine.
UC Resources Ltd. (TSXV: UC) is a Canadian exploration, development and production company with an opportunity-driven acquisition strategy. Its main focus is on production and exploration opportunities in Mexico. UC Mexican projects are in the heart of the Sierra Madre Mining Belt, which is one of the world's most prolific gold and silver mining belts.
About Frontline Gold Corporation
Frontline is a Canadian junior mineral exploration company with an experienced discovery team and a proven record of accomplishment. The Company's principal properties include the Menderes gold project in the Izmir province of Western Turkey, the Poly and Stewart (gold-copper polymetallic) projects in the Stewart region of British Columbia and the Niaouleni gold project in southern Mali in the heart of West Africa's prolific gold belt. Other Canadian exploration properties include it's Red Lake (gold) claims.
For further information, please visit the Company's website at www.frontlinegold.com to view the most recent corporate presentation.
This news release contains forward-looking statements, which address future events and conditions, which are subject to various risks and uncertainties. The Company's actual results, programs and financial position could differ materially from those anticipated in such forward-looking statements as a result of numerous factors, some of which may be beyond the Company's control. These factors include: the availability of funds; the timing and content of work programs; results of exploration activities and development of mineral properties, the interpretation of drilling results and other geological data, the uncertainties of resource and reserve estimations, receipt and security of mineral property titles; project cost overruns or unanticipated costs and expenses, fluctuations in metal prices; currency fluctuations; and general market and industry conditions.
Forward-looking statements are based on the expectations and opinions of the Company's management on the date the statements are made. The assumptions used in the preparation of such statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.
| Contact: | Walter Henry | |
| Telephone: | (416) 362-9100 | |
| "Walter Henry" | Fax: | (416) 362-9300 |
| Walter Henry, President & CEO | Email: | info@frontlinegold.com |
| FRONTLINE GOLD CORP. | Website: | www.frontlinegold.com |
| Frontline Gold Corp. (TSXV: FGC) | ||
| 1 Toronto Street, Suite 201 | ||
| Toronto, Ontario M5E 1J8 | ||
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