Olympic Resources Ltd. Announces Agreement for Its Qualifying Transaction
June 27, 2011 OLA: TSXV
Olympic Resources Ltd. (the "Company") is pleased to announce that it has entered into an option agreement (the "Option Agreement") dated June 17, 2011 with Eagle Plains Resources Ltd. ("EPRL") to acquire a 60% interest in the Dragon Lake Project in the Yukon Territory (the "Dragon Lake Project").
The Company is a capital pool company under the policies of the TSX Venture Exchange and the Option Agreement will constitute its qualifying transaction in accordance with Exchange Policy 2.4 Capital Pool Companies. Upon completion of the transaction, the Company expects to be listed as a Tier 2 mining company.
Terms of the transaction
Pursuant to the Option Agreement, the Company is required to pay $500,000 in cash, incur cumulative exploration expenditures of $3,000,000 and issue a total of 1,000,000 common shares over a period of four years. An initial cash payment of $30,000 was made on execution of the Option Agreement. Upon the Company earning its 60% interest in the Dragon Lake Project, the parties will form a joint venture in relation to the further exploration and management of the Dragon Lake Project.
The transaction is subject to a number of conditions including, but not limited to, receipt of all required regulatory approvals, including the approval of the TSX Venture Exchange. The transaction is an arm's length transaction and therefore will not require the approval of the shareholders of the Company.
ERPL is a junior exploration and mining company incorporated in Alberta and listed on the TSX Venture Exchange. The transaction is an arm's length transaction.
Dragon Lake Project
The 2,300 acre Dragon Lake Project is located 85km northeast of Ross River, Yukon. Soil geochemical sampling, limited trenching and drilling has been completed by Eagle Plains since 1996 and has indicated that significant gold mineralization is present within property boundaries.
Mineralization on the Dragon Lake Project is associated with an elongate Tombstone Suite intrusive which has intruded sedimentary rocks of the Hyland Group. Contact metamorphism related to intrusion of the pluton has resulted in a distinct alteration halo which hosts known mineralization. Work carried out by Eagle Plains in 2010 on the Main Zone included continuous chip trench sampling which returned 4.9 g/t gold over 6.0m, including 6.7 g/t over 4.0m (T-11) and 6.0m grading 2.8 g/t (T-02). A grab sample of material from a 1.2m wide quartz vein returned 19.8 g/t gold. Exploration pits dug in 2010 by Eagle Plains in areas of anomalous soil samples from past programs returned 2.85 g/t gold and 2.25 g/t gold, respectively.
The Dragon Lake Project was first staked in 1966 by Kennco Exploration, which completed geological and geophysical survey work. Canamax and Welcome North carried out additional surface work in 1983 and 1988, respectively. Eagle Plains staked the property in 1996 and have completed 7 separate exploration programs in the ensuing years. In 2010, Eagle Plains completed rock and soil geochemical sampling and an airborne geophysical survey.
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Management of the Resulting Issuer
In connection with the Qualifying Transaction, it is anticipated that Elston Johnston, the current CEO and President of the Company will step down from those positions and Mr. Balbir Johal will be appointed as CEO, President and a director of the Company. Mr. Johnston will remain as a director. In addition, Mr. Andrew Davidson will be appointed as a director and as Chief Financial Officer. Messrs. Tony Claydon and John Pallot will resign as directors. Following completion of the transaction, the directors and management team of the Company will be:
Balbir Johal – Director, President and CEO Andrew Davidson – Director, CFO Elston Johnston – Director Marvin Mitchell – Director
Mr. Balbir Johal has been a lawyer since 1983, and has been involved with public companies in various capacities. Most recently, Mr. Johal has been a director and the president and CEO of Ultra Lithium Inc., a director of Silver Lake Resources Inc. and Urastar Energy Inc., all mineral exploration companies listed on the TSX Venture Exchange.
Mr. Andrew Davidson is the CFO of 49 North Resources Inc., a Canadian resource investment company headquarters in Saskatchewan and listed on the TSX Venture Exchange. Mr. Davidson is a Chartered Accountant with certification in both Saskatchewan and Alberta. Mr. Davidson currently sits as a director of Kimpar Resources Inc., Allstar Energy Limited and Prairie First Energy Inc.
Mr. Elston Johnston received his Professional Engineer designation from the Association of Professional Engineers and Geoscientists of British Columbia in 1986 and his Professional Engineer designation from the Association of Professional Engineers and Geoscientists of Alberta in 2004. Mr. Johnston's has been a Consulting Engineer since 1977 and his principal occupation since 1997 has been as a self employed Consulting Engineer. In addition, Mr. Johnston has been involved with numerous public companies in various capacities.
Mr. Marvin Mitchell is a registered professional engineer in the Province of British Columbia. Mr. Mitchell received his Bachelor of Science (Geological Engineering) from Montana Tech in 1968 (formerly Montana School of Mines) and has been the principal of Mitchell Geological Services Inc. since 1985. . Mr. Mitchell currently sits on the board of directors of various Exchange listed resource companies:
Stock Options
In connection with the Qualifying Transaction, the Company will grant up to 2,000,000 stock options to the directors and officers at a price of $0.22 per share.
Sponsorship
The Company intends to apply to the Exchange to have the requirement for sponsorship of the Qualifing Transaction waived. There can be no assurance that the waiver will be granted. In any event, an agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.
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Trading Halt
In accordance with Exchange policies, the Company's common shares are currently halted from trading and will remain so until the documentation required by the Exchange for the Qualifying Transaction is provided to the Exchange. The Company's common shares may remain halted until completion of the Qualifying Transaction.
Marvin A. Mitchell, P.Eng., is the qualified person under NI-43-101 guidelines who has reviewed the technical information contained in this news release for the Company..
Private Placement Closing
The Company also announces that it has closed its previously announced private placement of 16,047,097 Common Shares at a price of $0.095 per share for gross proceeds of $1,524,474. The shares are subject to a hold period expiring on October 23, 2011. Finder's fees equal to 10% of the proceeds were paid by the Company.
For further information, please contact:
Elston Johnston 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.
Completion of the transaction is subject to a number of conditions including but not limited to, exchange acceptance and, if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved or disapproved of the contents of this press release.