MT PEARL, Newfoundland, December 16, 2010 /PRNewswire-FirstCall/ -- Aurion Resources Ltd. ("Aurion") (TSX VENTURE: "AU") is pleased to report that is has signed a binding Letter of Intent (LOI) with Gammon Gold Inc ("Gammon") giving Gammon the option to earn up to a 70% interest in Aurion's 100% owned La Bandera gold project in Durango, Mexico.
Under the terms of the LOI, Gammon can a earn an initial 51% interest by making $5 million in exploration expenditures over 36 months, including a firm commitment to spend a minimum $1 million in the first 12 months. Gammon can earn an additional 19% by completing a minimum $7 million in additional expenditures or by completing a positive feasibility study within 5 years of earning 51% and forming a Joint Venture. In addition, Gammon will make a $250,000 private placement in Aurion, purchasing share units priced at a 30% premium to the 30-day moving average of Aurion's share price as of the date of signing a Definitive Agreement. Each unit comes with a 1/2 warrant priced at a 50% premium to the 30-day moving average of Aurion share price, as of the date of signing a Definitive Agreement.
"This is a significant milestone for us", stated Mike Basha, President and CEO of Aurion. "We acquired La Bandera approximately 1 year ago and advanced it through grass roots exploration efforts to a stage where we felt we could attract a joint venture partner. Moreover, we are very pleased that a company of Gammon's stature, with the proven ability to build mines on similar type mineral systems in Mexico, will partner with us".
La Bandera is host to a more than 20 km long, epithermal gold vein system. Widespread gold in quartz veins, breccias and stockworks occurs over the length of the system. The property has seen only cursory exploration in the past with 7 drillholes completed in the southern portion of by previous workers. In the north of the property Aurion has outlined a more than 2300 m long by 300 m wide Au-in-soil geochemical anomaly coincident with a clay alteration zone which hosts widely spaced quartz veinlets. Individual soil samples assayed up to 2.07 g/t Au and individual rock chip samples of the quartz veins assayed up to 73.7 g/t Au (See Aurion Press Release dated Sept 21, 2010).
Aurion is focused on early stage precious metals exploration in Mexico, Nevada, and BC. It currently has approximately 18,821,455 shares issued and outstanding and is well-financed. Its strategy is to advance its projects to a stage which will attract potential joint venture partners. Aurion continues to evaluate other gold-silver projects for acquisition.
Mike Basha, P.Eng., P.Geo., President and CEO of Aurion, is the Qualified Person as defined by National Instrument 43-101, and is responsible for the preparation of this release.
All dollars are in Canadian currency unless otherwise stated.
Certain statements contained in this release constitute forward-looking information. These statements relate to future events or future performance. The use of any of the words "could", "intend", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on Aurion's current beliefs or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to Aurion. The material factors and assumptions include: regulatory approvals being obtained for the issuances of the Aurion Shares referenced herein, no changes to existing Exchange Policies, exploration programs for Aurion remaining the same as forecast, Aurion having the necessary capital in order to complete its anticipated work program on the La Bandera Properties and no significant decrease in the price of gold. Risk Factors that could cause actual results or outcomes to differ materially from the results expressed or implied by forward-looking information include, among other things: risks related to exploration activities, general economic and business conditions and changes in the regulatory regulation. Aurion cautions the reader that the above list of risk factors is not exhaustive. The forward-looking information contained in this release is made as of the date hereof and Aurion is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.
On behalf of the Board,
Michael Basha, President & CEO
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For further information: For further information: Aurion Resources please visit our website at http://www.aurionresources.com or contact us: Mike Basha at +1-709-699-8300
SOURCE AURION RESOURCES LTD.