Gold Reach Sells Auro and Auro South for $6 Million Cash and Retains a 2% Royalty
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 03/22/12 -- Gold Reach Resources Ltd. (TSX VENTURE:GRV) ("Gold Reach" or "the Company") is pleased to announce the sale of the Company's mineral interests known as the Auro and Auro South properties to New Gold Inc. ("New Gold"), both located southeast of New Gold's Blackwater Gold deposit.
Under the terms of the definitive purchase agreement, Gold Reach has sold to New Gold a 100% interest in the approximately 23,000 hectare Auro and Auro South claims ("the Claims") in consideration for a Cdn. $6,000,000 cash payment. Gold Reach will retain a 2% net smelter returns royalty ("NSR") on the Claims and New Gold has committed to spend Cdn. $1,500,000 on exploration expenditures on the Claims over the next 3 years.
Dr. Shane Ebert, President of the Company, stated, "We are extremely pleased to have entered into this agreement with New Gold, a company that is extremely active in the belt and is rapidly expanding their Blackwater gold deposit. With the technical and financial resources of New Gold behind the Auro and Auro South properties we anticipate that they will be advanced at an accelerated pace and the 2% NSR retained by Gold Reach will ensure our shareholders benefit if a significant discovery is made. The sale of the Auro and Auro South properties puts Gold Reach in a strong financial position and allows the company to focus on its core asset which is the large Cu-Au porphyry system on the Ootsa property."
The Company is in the process of planning a large exploration program at the Ootsa property which will focus on delineating and expanding the recently discovered zone of higher grade Cu-Au-Mo mineralization at the West Seel deposit. The last hole drilled during the 2011 drilling program at West Seel returned 566.7 metres grading 0.54% Cu Eq, including 124 metres grading 0.71% Cu Eq, and the hole ended in mineralization. Details of the proposed exploration program will be announced shortly.