TORONTO, ONTARIO--(Marketwire - Sept. 14, 2012) - QMX GOLD CORPORATION (TSX:QMX)(OTCQX:QMXMF) ("QMX" or the "Company") is pleased to announce that pursuant to the Letter of Intent announced on May 18, 2012, it has entered into a purchase and sale agreement (the "Agreement"), dated September 12, 2012 with Druk Capital Partners Inc. ("Druk") (TSX VENTURE:DRU.P) to sell its base metals camp in Rouyn-Noranda, Quebec (the Property") to Druk, for gross proceeds in the amount of $5 million and for 7,000,000 common shares Druk at a deemed price of $0.25 per share (the "Transaction") (See Press Release dated May 18, 2012). The Transaction will not affect the 100% owned Lac Pelletier property of QMX.
The Transaction will constitute a qualifying transaction for Druk, as such term is defined by the TSX Venture Exchange and accordingly, closing of the Transaction is scheduled to occur on or before September 21, 2012, and remains subject to the approval of the TSX Venture Exchange.
QMX believes the benefits of the Transaction are as follows:
- Increases the cash position of QMX to move the Snow Lake Project forward.
- Brings the exploration potential of the mineral-rich Rouyn-Noranda properties to the near- term as the exploration efforts by Druk ramp-up as the Property will become the qualifying property of Druk.
- Provides QMX the opportunity to participate in the growth of an independent junior exploration company by retaining approximately 16% ownership of Druk upon closing of the Transaction and completion of Druk's qualifying transaction.
The project in Rouyn-Noranda, which covers approximately 728 square kilometers, was originally added to the Company's portfolio of properties in 2004 when the Company entered into a 50/50 joint venture with Noranda Inc. QMX acquired rights to the Property in April 2011 when it completed an agreement with Xstrata Canada Corp. (see Press Release dated April 5, 2011). The mining camp had historically produced gold and other base metals. QMX considers the Transaction to be a positive move for both companies as it furthers the development of the Rouyn-Noranda property while allowing QMX to refocus its Quebec based exploration efforts on its other properties located in the Val D'or Region of Quebec.
Francois Perron, President and CEO of QMX commented on the Agreement: "I am pleased to be strategically partnering with Druk, which we believe will allow for the rapid mobilization of exploration efforts in Rouyn, while allowing QMX to advance on its core priorities as well. Entering into this agreement with Druk is an important strategic move for the future of QMX. The structure of the deal is such that it will still allow QMX to participate in the exploration upside of the property, which we continue to believe is impressive, yet it allows us to move forward in our goal of getting the Snow Lake project closer to production."
Pursuant the Agreement, Druk will acquire 100% of the Company' rights, titles and interests to and in the Project by:
- Paying Alexis the aggregate gross sum of $5 million in cash upon closing Transaction; and
- Issuing to QMX 7,000,000 common shares of Druk at the deemed price of $0.25 per share, which shall be released to QMX upon completion of certain conditions set out in an escrow agreement to be entered into between the parties and in accordance with the policies of the TSX Venture Exchange.
Provided that QMX retains a 10% equity interest in Druk on an undiluted basis, Druk shall grant QMX the right to maintain its pro rata interest in the securities of Druk in any future financing completed by Druk in which QMX may be legally entitled to participate following the Transaction and shall maintain the right to nominate one person member of to the board of Druk. Should the Company' equity interest in Druk at any time fall below 10% (on an undiluted basis), the foregoing rights shall immediately cease and be of no further force and effect. Upon closing of the Transaction, Druk has agreed to maintain the continuity of the operations in Val d'Or, Quebec by making offers to employ several current employees of QMX who have an intimate working knowledge of the Property. In addition, in accordance with the Agreement, the parties shall enter into a pooling agreement upon closing, which will contain certain restrictions on the Company's right to sell the Druk shares and shall provide that the Company will vote its Druk shares in accordance with the reasonable recommendations of management of Druk at any of its annual general or special meetings of shareholders.
Technical programs and scientific and technical information included in this release have been supervised, compiled, reviewed and approved by David Rigg, P.Geo., the Chairman of the Company and a Qualified Person as defined under NI 43-101.
About QMX Gold
QMX Gold Corporation is a Canadian publicly traded mining company focusing on mine development and exploration in Quebec and Manitoba. The Company is listed on the Toronto Stock Exchange and effective July 5, 2012, began trading under the symbol "QMX", and trades in the United States on the Over the Counter QX International platform under the symbol "QMXGF". QMX Gold continues to be a dynamic and aggressive mining company operating in Canada's richest mining regions: Val-d'Or, Quebec, and Snow Lake, Manitoba. QMX Gold continues to operate in the mineral rich Val-d'Or area with production estimated at 18,000-20,000 ounces of gold per year. The Company has also begun to ramp-up pre-production activities at its property at the Snow Lake Mining Camp which has a Measured and Indicated Mineral Resources consisting of 5.4 million tonnes grading 4.54 g/t Au for 728,000 oz gold and is expected to produce 80,000 ounces of gold per year as identified in the Technical Report of the Company dated of December 10, 2010 titled "Snow Lake Mine Re-activation Project" prepared by: Andre Roy (Eng.) Jamie Lavigne (P.Geo), David West (P.Eng), Ian Ward (P.Eng), Matthew Parfitt (P.Eng), Mark Bednarz (P.Geo) and available on the SEDAR profile of the Company at www.sedar.com.
This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the impact of the Transaction, the completion of the Transaction as proposed and anticipated timing with respect to the closing of the Transaction and receipt of all necessary regulatory approvals, the timing and amount of future exploration and development of the property, the timing and amount of future production, and the future financial or operating performance of QMX and its projects. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to those risks described in the annual information form of the Company, which is available under the profile of the Company on SEDAR. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. 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 statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.