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Scorpio Capital Corp. ("Scorpio") is pleased to announce that effective January 1, 2007, and subject to final approval by the TSX Venture Exchange (the "Exchange"), Scorpio has completed its qualifying transaction with BDE Equities Inc. ("BDE"), as originally announced by press releases dated November 3, 2005, November 18, 2005, January 10, 2006, May 17, 2006, August 24, 2006, September 13, 2006, October 3, 2006 and December 4, 2006 (the "Qualifying Transaction"). Final materials have been submitted to the Exchange for final Exchange approval, which is pending and is expected to be obtained during the week of January 2, 2007. Scorpio will now carry on the businesses of BDE and, upon receipt of final Exchange approval, will no longer be a Capital Pool Company. In connection with the Qualifying Transaction, BDE completed a private placement financing (the "BDE Financing"), raising aggregate gross proceeds of $1,200,000. The details of the BDE Financing are more fully described below. With the completion of the BDE Financing and the Qualifying Transaction, Scorpio now has the following securities issued and outstanding, as more fully detailed below: Common shares (each a "Scorpio Share") issued and outstanding: 58,127,429 Scorpio Shares issuable upon conversion of Convertible Debenture: 6,250,000 Options issued and outstanding: 3,171,049 ------------------------------------------------------ Fully Diluted: 67,548,478 For full disclosure regarding the Qualifying Transaction and the businesses of BDE, please refer to Scorpio's filing statement (the "Filing Statement") dated November 30, 2006, a copy of which can be accessed through Scorpio's profile on SEDAR (www.sedar.com). The Qualifying Transaction Pursuant to the terms of an amalgamation agreement (the "Amalgamation Agreement") between Scorpio, BDE and 2100691 Ontario Ltd., a wholly-owned subsidiary of Scorpio ("Scorpio Sub"), BDE and Scorpio Sub completed an amalgamation under the Business Corporations Act (Ontario), effective January 1, 2007, resulting in an amalgamated corporation being formed under the name of "BDE Equities Inc." Rather than receiving shares of the amalgamated corporation, the securityholders of BDE each received securities of Scorpio at a deemed price of $0.175 per Scorpio Share. In this regard, upon the closing of the Qualifying Transaction, Scorpio issued to the holders of BDE common shares ("BDE Share") one Scorpio Share for each issued and outstanding BDE Share for an aggregate of 53,455,605 Scorpio Shares. Scorpio also granted 2,750,000 stock options of Scorpio to certain officer, employees and consultants of BDE in exchange for the 2,750,000 options of BDE held by such persons. Such Scorpio options have been granted on the same terms as the BDE options. They have five year terms and are exercisable at prices between $0.16 and $0.50. In addition, a convertible debenture with a face value of $1,250,000 (convertible into a maximum of 6,250,000 Scorpio Shares) was issued by Scorpio in exchange for the cancellation of an outstanding convertible debenture issued by BDE. The terms of this new debenture are identical to those of the initial debenture issued by BDE. Immediately prior to the completion of the Qualifying Transaction, an aggregate of $251,000 amount of outstanding debt owing by BDE was converted into a total of 1,255,000 BDE Shares at an ascribed price of $0.20 per BDE Share. These BDE Shares were replaced by 1,255,000 Scorpio Shares upon completion of the Qualifying Transaction. In accordance with the policies of the TSX Venture Exchange, a total of 1,333,334 Scorpio Shares remain subject to Scorpio's original CPC escrow agreement, to be released over a period of three (3) years. In addition, an aggregate of 34,133,334 Scorpio Shares issued to the principal and certain other shareholders of BDE pursuant to the Qualifying Transaction have been deposited and are subject to a Tier 2 surplus security escrow agreement entered into as of January 1, 2007 with Equity Transfer & Trust Company (the "Surplus Escrow Agreement"). The Surplus Escrow Agreement provides for staged releases over a period of six (6) years. As further disclosed in the Filing Statement, in conjunction with the closing of the Qualifying Transaction, the following individuals have been appointed as the directors and officers of Scorpio: Name Position ---------------------------------------------------------------------- Frank Bellotti President, Chief Executive Officer and Director David Tsubouchi Director and Chairman of Board Luciano Grossi Director G. Michael Newman Director Julio DiGirolamo Director Randy Koroll Chief Financial Officer Danny Santapaga Vice-President, Call Centre Julie Galati Vice-President, Mortgage Services Fraser Mackenzie Limited acted as Sponsor for the Qualifying Transaction and received a sponsorship fee of $25,000 plus G.S.T, and reimbursement of its legal fees. The BDE Financing Immediately prior to the closing of the Qualifying Transaction, BDE completed the BDE Financing by issuing a total of 6,000,000 BDE Shares at a price of $0.20 per share, raising aggregate gross proceeds of $1,200,000. These BDE Shares were replaced by 6,000,000 Scorpio Shares upon completion of the Qualifying Transaction. About Scorpio Scorpio is the 100% parent of BDE Equities Inc. BDE is the owner of Kingside Mortgage Corporation, a mortgage brokerage business, and Kingside Homes Corporation, a residential and multi-residential home builder. BDE also holds interests in one property upon which Kingside Homes is planning on building residential units. THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE. |
The Wardrop 2010 Inferred resource is confined by an optimized Whittle pit shell #25
Entree Gold Inc. has received the first National Instrument 43-101 ("NI 43-101") compliant resource estimate prepared for the Ann Mason copper- molybdenum deposit located near Yerington, Nevada. Ann Mason is estimated to contain an inferred resource of 810.4 million metric tonnes grading 0.40% copper, using a 0.30% copper cut-off (see Table 1 below). Accompanying molybdenum is estimated at 165.9 million metric tonnes at a grade of 0.01% molybdenum. Based on these figures, the Ann Mason deposit contains approximately 7.1 billion pounds of copper.
Entree commissioned Wardrop Engineering Inc. ("Wardrop") to prepare the NI 43-101 compliant Technical Report and Resource Estimate of the Ann Mason Copper Molybdenum Project ("2010 NI 43-101 Resource Estimate"), which is filed on SEDAR. This independent report was completed in order to fulfill Canadian regulatory requirements.
The Wardrop 2010 Inferred resource is confined by an optimized Whittle pit shell #25. Using the same pit shell, the 2010 Inferred resource estimate represents a 10.6% increase in tonnes from the 2006 model (724.7 million tonnes at 0.40% copper) with a negligible increase in grade at a 0.30% copper cut-off. The increase in tonnage is largely due to the inclusion of additional information generated by drilling after the 2006 calculation was made.
Entree announced on November 29, 2009 that it had signed a definitive agreement with PacMag Metals Limited to implement Australian Schemes of Arrangement to acquire all of the issued shares and options of PacMag. PacMag has a 100% interest in the Ann Mason Project, which hosts the Ann Mason deposit. PacMag commissioned Golder Associates ("Golder") to prepare a Joint Ore Reserves Committee ("JORC") compliant resource estimate in 2006 that outlined an in-situ Inferred Mineral Resource of 810 million tonnes grading 0.40% copper and 0.004% molybdenum at a 0.30% copper cut-off grade, estimated to contain more than 7.1 billion pounds copper. The 2010 NI 43-101 Resource Estimate confirms the 2006 Golder estimate.
Greg Crowe, President and CEO of Entree commented, "The recent NI 43-101 inferred resource calculation validates the earlier work done by PacMag, and suggests there is significant scope to expand the deposit by further drilling. Once the merger with PacMag is complete, we intend to commence a substantial exploration program, including additional drilling to potentially expand the resource and to further test the southern and western portions of the Ann Mason deposit."
The grades at Ann Mason compare favourably with a number of current producers and development projects in western North America where large open pit porphyry deposits currently in production generally mine copper grades between 0.28 % to 0.56% copper.
In addition to the defined resource, significant copper oxide and deeper sulphide mineralization has been intersected at Blue Hills, approximately 5 km to the west of Ann Mason. The oxide copper target covers an area of 1.5 km by 350 m, and includes near-surface intercepts of 21.3 m of 0.46% copper, 36.3 m of 0.46% copper and 39.6 m of 0.26 % copper. The surface copper anomaly in soils appears to extend to the west onto adjoining ground held by HoneyBadger Exploration Inc. , which is under option to Entree.
At the Shamrock prospect, located 5 km to the southeast of Ann Mason, drilling by PacMag has confirmed the presence of high grade near surface copper mineralization (e.g. 33.6 m of 1.72 % copper) in altered limestone.
Work is also being planned for the contiguous Blackjack and Roulette properties under option agreements with HoneyBadger and Bronco Creek Exploration, Inc. . The properties adjoin the Ann Mason property to the west and south.
ABOUT ENTREE GOLD INC.
Entree Gold Inc. is a Canadian mineral exploration company focused on the worldwide exploration and development of gold and copper prospects. Entree's expertise is in exploring for deep and/or concealed ore deposits and with a treasury currently in excess of C$40 million, is well funded for future activities. Ivanhoe Mines and Rio Tinto are major shareholders of Entree, holding approximately 14% and 15% of issued and outstanding shares, respectively.
Entree's flagship property is in Mongolia, where it holds two mining licences and one exploration licence comprising the 179,590 hectare Lookout Hill property that completely surrounds the 8,500-hectare Oyu Tolgoi project of Ivanhoe Mines, and hosts the Hugo North Extension of the Hugo Dummett copper-gold deposit and the Heruga copper-gold-molybdenum deposit.
The Lookout Hill property is subject to a joint venture with Oyu Tolgoi LLC (OTLLC) whereby following expenditure of US$35 million by OTLLC, Entree now retains a 20% to 30% carried interest through to production, with Entree's share of development costs to be repaid from future production cash flow.
The Hugo North Extension deposit hosts a NI 43-101 compliant Indicated resource of 117 million tonnes grading 1.8% copper and 0.61 g/t gold, estimated to contain 4.6 billion pounds of copper and 2.3 million ounces of gold and an Inferred resource of 95.5 million tonnes grading 1.15% copper and 0.31 g/t gold, estimated to contain 2.4 billion pounds copper and 950,000 ounces of gold. Entree retains a 20% carried interest in these resources.
The Heruga deposit contains an Inferred resource of 760 million tonnes grading 0.48% copper, 0.55 g/t gold and 142 ppm molybdenum, estimated to contain 8 billion pounds of copper and 13.4 million ounces of gold. Entree also retains a 20% carried interest in this resource.
Both resources were calculated using a 0.6 % copper equivalent cut-off. The copper equivalent grades were estimated using metal prices of US$1.35 per pound copper, US$650 per ounce gold and US$10 per pound molybdenum. All resources at Hugo North Extension and Heruga were calculated using a 0.6% copper-equivalent cut-off.
Entree continues to explore its large landholdings in Mongolia, including the coal discovery Nomkhon Bohr, and is also evaluating the Huaixi copper project in Zhejiang Province in China.
In North America, Entree is exploring for porphyry-related copper systems in Arizona, New Mexico, Nevada and British Columbia. Entree's Nevada property is contiguous with the western boundary of PacMag's Ann Mason copper project and increases substantially the area of prospective tenure within that district.
Qualified Person
Dr. Robert Morrison, Ph.D., MAusIMM (CP), and Lead Senior Resource Geologist with Wardrop is a Qualified Person as defined by NI 43-101. Dr. Morrison supervised the preparation of the technical information in this release.
Competent Person Statement
The information in this Release that relates to PacMag Exploration Results, Mineral Resources or Ore Reserves, as those terms are defined in the 2004 Edition of the "Australasian Code for Reporting of exploration Results, Resources and Ore Reserves", is based on information compiled by Mr Michael Clifford, who is a full time employee of PacMag and a Member of the Australian Institute of Geoscientists. Mr Clifford has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Resources and Ore Reserves". Mr Clifford consents to the inclusion in this Release of the matters based on his information in the form and context in which it appears.
This News Release contains forward-looking statements. Forward-looking statements are statements which relate to future events. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. Such statements include those relating to the successful completion of the transaction and implementation of the Schemes of Arrangement. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results. Readers are referred to the sections entitled "Risk Factors" in the Company's periodic filings with the British Columbia Securities Commission, which can be viewed at www.SEDAR.com, and with the United States Securities and Exchange Commission, which can be viewed at www.SEC.gov.
Entree Gold Inc.
CONTACT: Monica Hamm, Manager, Investor Relations, Entree Gold Inc., Tel:(604) 687-4777, Toll Free: (866) 368-7330, E-mail: mhamm@entreegold.com;Peter Oates, Corporate Communications, Entree Gold Inc., Tel: (604)687-4777, Toll Free: (866) 368-7330, E-mail: poates@entreegold.com