Greenock Resources: Equity Private Placement and Update
TORONTO, ONTARIO -- (Marketwire) -- 04/05/12 -- Greenock Resources
Inc. (TSX VENTURE:GKR) ("Greenock") announces it is offering a
non-brokered equity private placement at $0.05 per Common Share with
an attached full common share purchase warrant that is eligible to
purchase a Common Share at a price of $0.10 per share for a period of
36 months from the date of closing. The maximum offering is $100,000.
These funds will be used advance corporate goals and restructure
Greenock to move forward with future resource development projects.
As previously announced the conditions to satisfy the Letter
Agreement dated October 5, 2011 for a private company Quatern
Holdings Limited ("Quatern") or its nominee to acquire 87.5% of the
shares of PTM Minerals (Cayman) Ltd. ("PTM") have not been completed.
PTM is a wholly owned subsidiary of Greenock. The parties to the
Letter Agreement are now in discussion regarding a new closing date
and revising terms of the agreement to reflect the current status of
outstanding conditions and the situation in the Democratic Republic
of Congo ("DRC").
A US $250,000 Promissory Note to PTM from Precious Metals Investments
("PMI") has matured. PMI has filed a Statement of Claim with PTM and
Greenock requesting payment. Greenock will be filing a Statement of
Defense. The repayment of the PTM Promissory Note was one of the
completion items that Quatern had agreed to repay as part of the
transaction to acquire 87.5% of the shares of PTM. PTM has been in
discussion with PMI regarding arrangements for the PTM Promissory
As outlined in a press release dated February 21, 2012, Greenock had
been informed of events in the DRC by Eurasian Natural Resources
Corporation ("ENRC") that challenges the mineral rights of PTM. PTM
disagrees with the statements and actions regarding Kakanda ownership
rights. Based on opinions from PTM's DRC legal counsel it would
appear that the proper procedures, notification and approvals for the
rescinding of mineral licenses in DRC have not been followed and that
the revocation of PTM's ownership of the Kakanda tailings is invalid.
Given the limited financial resources of Greenock and PTM, defense
options to protect Kakanda rights are limited and as such are still
Greenock is completing the audit of Financial Statements for the
December 31, 2011 year end. The audit will include a detailed review
on all the aspects of the Kakanda project status and will be
incorporated into the disclosures of the December 31, 2011 Financials
and Management Discussion and Analysis. Initial review by the
Auditors based on new IFRS accounting guidelines have recommended
that the capitalized book value of the Kakanda project will have to
be written down to $10,000. As of September 30, 2011, the Kakanda
project had a capitalized book value of $5,575,076 The IFRS
accounting rules do allow Greenock to write up the value of the
Kakanda project in the future if circumstances permit and Greenock is
able to demonstrate a recovery value. The IFRS accounting rules are
forward looking and the emphasis is on what is recoverable and not on
what has been spent in the past.
From an economic perspective, the May 25, 2008 NI 43-101 report on
the Kakanda project demonstrated there is the potential for a large
and economically viable copper / cobalt mine and processing plant
project at the Kakanda site. Sensitivity analysis on the Kakanda
tailings reprocessing project development alone forecast a Net
Present Value of US $261.6 million at a 20% discount or a 55.3%
Internal Rate of Return ($3.00 per lb. Copper and $15.00 per lb.
Cobalt) (2008 capital cost assumptions with no royalty, tax or
carried interest burdens). At this time, these assumptions would
require updates to reflect current circumstances including the
ongoing problems with title uncertainty and other challenges in the
Greenock Resources Inc. is a Canadian based international mineral
development company that focuses on developing a portfolio of natural
resource properties. Shares outstanding: 32,239,479.
The Kakanda copper / cobalt project in the Central African Copper
Belt is adjacent to the operating Tenke copper / cobalt mine and
plant presently being operated and expanded by Freeport McMoran and
Lundin Mining. The Kakanda tailings reprocessing project has NI
43-101 measured and indicated resources of 18.5 million tonnes with
an average grade of 1.25% copper and 0.15% cobalt. The adjacent
Kakanda hard rock deposits have a historical resource of 18.6 million
tonnes with an average grade of 3.19% copper and 0.19% cobalt.
Greenock holds a 100% interest in the Needles gold / silver property
located in the Arrowhead mining district of Nye County, Nevada. The
property is approximately 40 miles southeast of the Barrick - Kinross
Round Mountain Gold Mine. The Needles property has had historical
underground mining for gold and silver in the early 1920's.
This press release includes certain "Forward-Looking Statements"
within the meaning of applicable securities laws. Other than
statements of historical fact, all statements are "Forward-Looking
Statements" that involve such various known and unknown risks,
uncertainties and other factors. There can be no assurance that such
statements will prove accurate. Results and future events could
differ materially from those anticipated in such statements. Readers
of this press release are cautioned not to place undue reliance on
these "Forward-Looking Statements". Michael Newbury, P.Eng., is the
qualified person who has reviewed this material on behalf of the
Company. All dollar amounts are noted in Canadian dollars unless
otherwise stated in this release.
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.
Greenock Resources Inc.
James S. Hershaw
CFO & Vice President, Corporate/Mineral Development
(416) 603.9200 (FAX)
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