VANCOUVER, April 15, 2013 /PRNewswire/ - Garibaldi Resources Corp. (TSX.V: GGI) (the "Company" or "Garibaldi") is pleased to report that it has completed a transaction to acquire a 100% interest in the 99 hectare La Patilla property located in the Municipality of Rosario, State of Sinaloa, Mexico (the "La Patilla Property" or the "Property").
The La Patilla Property lies in the Rosario-Las Rastras mining district that hosts numerous small gold-bearing veins as well as Marlin Gold's (formerly Oro Mining) La Trinidad project with 4.326 million tonnes of indicated resources at a grade of 1.79 g/t for a total of 248,610 oz gold. Several gold bearing quartz veins occur on the Property that have been the subject of small scale mining operations by artisanal miners or "gambusinos" for a number of years and dating to historic times. Exploration by ProDeMin has defined two principal targets to date, including the La Patilla vein system and the Gambusino mine. The La Patilla Property was optioned from the original owners by ProDeMin in 2010 for its potential to develop a small mining operation.
Garibaldi is acquiring the La Patilla Property through taking an assignment of an option to acquire the Property held by Prospeccion y Desarrollo Minero del Norte, S.A. de C.V. ("ProDeMin"), a private Mexican company controlled by Dr. Craig Gibson, PhD., a director of the Company, and then exercising the option to acquire the Property from the underlying Mexican owners. Pursuant to the terms of the agreements, Garibaldi paid US$40,000 to the underlying owners to exercise the option, US$30,000 to ProDeMin to reimburse it for previous option payments made and will issue 300,000 shares in the capital of Garibaldi to ProDeMin on receipt of acceptance for filing for the transaction from the TSX Venture Exchange (the "Exchange"). Should the Property be placed in commercial production by Garibaldi, Garibaldi will issue a further 800,000 shares to ProDeMin and will pay a 3% NSR royalty to ProDeMin. The royalty is capped at US$3,000,000 and Garibaldi may buy back 2 percentage points of the royalty at any time upon the payment of US$2,000,000 to ProDeMin.
With the assignment of the option being acquired from ProDeMin, a company controlled by Dr. Craig Gibson, a director of Garibaldi, the transaction is considered a related party transaction and subject to the provisions of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (the "Instrument"). The Instrument makes provisions for a formal valuation and minority shareholder approval for related party transactions, however, provides exemptions from these requirements in certain circumstances. For this transaction, Garibaldi is relying on the exemption from the valuation requirements found in subsection 5.5(a) of the Instrument and on the exemption from the minority shareholder approval requirement found in subsection 5.7(i)(a) of the Instrument on the basis for both exemptions that the transaction has a value of less than twenty-five percent of the market capitalization of Garibaldi's issued shares. Pursuant to the transaction, at closing, Dr. Gibson's beneficial holdings, or holdings over which he has control or direction, of shares of Garibaldi will increase from nil to 300,000 shares or 0.52 % of the issued share capital of Garibaldi.
The decision to acquire the La Patilla Property was approved by the Board of Directors of Garibaldi, with Dr. Gibson abstaining from voting on the matter due to his interest in the transaction, as disclosed. In making its decision, the Board considered the long history of artisanal mining for gold on the Property, the geological systems located on the Property and the identified potential for near-term small-scale commercial production by employing modern technology and equipment to further develop the Property.
We seek safe harbour.
GARIBALDI RESOURCES CORP.
per: "Steve Regoci"
Steve Regoci, President
Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or the accuracy of this release.
SOURCE Garibaldi Resources Corp.