|February 19, 2014|
Tonogold Resources Secures Option to Acquire 51% of Mil-Ler Resources and Energy SA
|La Jolla, California. February 19, 2014. Tonogold Resources, Inc. (OTC: TNGL) wishes to provide the market with an update with regard to the agreement that was reached with Mil-ler Resources and Energy SA ("Mil-ler"), a private Mexican company and owner of the Nevmex Iron Ore project in Mexico, details of which were announced late last year. The principal terms of the agreement provided Tonogold with the exclusive right to subscribe for 51,515 new shares in Mil-ler (increasing Mil-ler's issued capital to 151,515 shares) representing a 34% equity interest in Mil-ler by investing $10 million in two tranches of $5 million each.|
Subsequently, Tonogold announced a proposed Private Placement Offering of 120 million new shares in Tonogold at 5-cents per share to raise $6 million (before costs), in order to fund the initial investment in Mil-ler.
Tonogold believes that having the ability to take a controlling interest (+50%) in Mil-ler will substantially enhance the investor appeal of Tonogold.
Tonogold, Mil-ler and Mil-ler's current shareholders initiated discussions in this regard, and as a result Tonogold is pleased to advise the following:
Three strong and significant magnetic anomalies (shown as the darker areas in the diagram) have recently been identified on tenements held by Mil-ler. At least one of these anomalies is coincidental with major iron ore outcropping. Each anomaly is over 5 kms (3.1 miles) long and up to 2 km (1.2 miles) - each having the potential to transform this project into a world-class iron ore producer.
The initial $5 million investment contemplated by Tonogold will be used to fund a 4 month, major drill program to test one of these anomalies.
The diagram shows the three strong and significant magnetic signature over tenements held by Mil-Ler (covering some 350 square kilometers - 135 square miles) as well as the more subtle anomalies over the two open pits that represent the current mining activities (Ponderosa and Fito). Note the darker shading highlights high magnetic signatures.
Ponderosa and Fito, were drilled in 2011 on a 25 by 25 meter pattern over an area of approximately 130,000 square meters, and is the basis of a mine plan that will provide 550,000 tonnes of ore per year, which after beneficiation will yield ~360,000 tonnes pa of final Iron Ore product which is shipped and sold to China.
A ground geophysical program will be undertaken followed by a drill program to test one of the three major anomalies immediately following Tonogold's initial $5 million investment in Mil-ler. Drilling will be mainly core (diamond), employing 3-4 rigs for approximately 43,000 meters (~450 holes) down to a depth of around 100 meters on an initial grid pattern of 100 meters by 100 meters covering an area 5.0 kilometers by 0.9 kilometers. The area covered by this forthcoming drill program, (4,500,000 square meters), is some 33 times larger than that which hosts the deposits currently being mined, providing an order-of-magnitude of the potential for a quantum increase in iron ore production in the future.
Tonogold's CEO Mr. Ashley said "Tonogold's decision to increase its investment in Mil-Ler from 17% to 51% will be made with the benefit of the results from the major drill program which is expected to confirm the magnitude of one of the three major magnetic anomalies and the ability to transform this project, and in turn, Tonogold, into a substantial profitable iron ore producer". He added that he remains totally committed and extremely excited with the potential that this opportunity provides, and offered his appreciation for the commitment and flexibility of the management and shareholders of Mil-Ler in aiding Tonogold's participation.
Mr. Travis Miller, the CEO and 50% shareholder in Mil-Ler stated "I am confident that the strength, experience and commitment of Tonogold's management team will provide the necessary complimentary skills and disciplines required to optimize and unlock the significant value that we have already identified this project undoubtedly holds and to ensure a smooth transition to becoming a major iron ore producer".
Tonogold expects that the re-structured arrangement will enable the successful completion of the capital raising expeditiously.
How to participate in Tonogold's Private Placement Offering
Current shareholders and accredited Investors wishing to participate in Tonogold's private placement by subscribing for shares at 5-cents per share, may do so by completing the Subscription Agreement (located at the back of The Private Placement Memorandum) and returning it, together with the subscription funds, to Tonogold in accordance with the instructions contained therein. The Private Placement Memorandum is available from the company by sending an email requesting same to firstname.lastname@example.org or by telephoning the Company on 858-456-1273 ext. 101.
Further information on Mil-ler
Consideration for the Existing Shares
Safe Harbor Statement
This press release contains certain forward-looking information about Tonogold Resources, Inc. ("Tonogold") which is intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Words such as "expect(s)," "feel(s)," "believe(s)," "will," "may," "anticipate(s)," and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of Tonogold Resources, Inc. that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include: our lack of operating revenue and earnings history, our need for additional capital to pursue our business strategy, some of our managers lack formal training in the mining business, the grade and quantity of minerals in our projects may not be economic, we do not have fee title to our properties, but derive our rights through leases and the Mining Law, changes to the Mining Law may increase the cost of doing business, we are a non-reporting company and as such do not make periodic filings with the Securities and Exchange Commission, we trade on the Pink Sheets and there can be no assurances that a liquid market will develop in our securities, mining is subject to extensive environmental regulations and can create substantial environmental liabilities, gold, silver and other metals are commodities which have substantial price fluctuations, a drop in prices could adversely affect future profitability and capital raising efforts, and mining can be dangerous and present operational hazards for employees and contractors. Readers are cautioned not to place undue reliance on these forward-looking statements. Tonogold does not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
For further information please contact:
Mark Ashley, email@example.com
Phone: (858) 456-1273
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