Stronghold Metals Inc. ("Stronghold" or the "Company") (tsx venture:Z) is pleased to announce that it has entered into a letter of intent (the "LOI") dated August 3, 2011, with Kensington Court Ventures Inc. ("Kensington"), a capital pool company listed on the TSX Venture Exchange pursuant to which Kensington has agreed to acquire (the "Acquisition") all of the issued and outstanding shares of Stronghold's Brazilian subsidiary, Mineracao Vale Do Sonho Ltda. ("Do Sonho").
Do Sonho currently holds a 100% interest in the Tucuma gold project (the "Tucuma Property") which consists of 6 mineral concessions covering a total of 11,456.31 hectares located in the Carajas metallogenic province in the state of Para, Brazil.
The Acquisition, if completed, will constitute Kensington's "qualifying transaction" (the "QT") under the policies of the Exchange. The QT is not a related party transaction under the rules and policies of the Exchange and the QT does not constitute a non-arm's length QT. Approval of the shareholders of Kensington to the QT will not be required by the Exchange. Upon completion of the QT, Kensington will become a Tier 2 mining issuer on the Exchange. Kensington will apply to the Exchange for a waiver of the requirement to engage a sponsor with respect to the QT. There is no assurance that a waiver will be granted.
Under the terms of the LOI, Kensington will acquire all of the issued and outstanding shares of Do Sonho in exchange for the issuance to Stronghold of 16,300,000 common shares of Kensington. Upon completion of the Acquisition, Do Sonho will become a wholly-owned subsidiary of Kensington. Upon completion of the QT, Kensington will grant to Stronghold a 2% net smelter returns royalty (the "NSR Royalty") from the production of minerals from the Tucuma Property, subject to Kensington's right to purchase the NSR Royalty from Stronghold for $1,500,000, which right is exercisable at any time.
Since acquiring Do Sonho in 2010, Stronghold has spent $1,046,250 on exploration and development of the Tucuma Property. Do Sonho's financial results are reflected in Stronghold's consolidated audited annual financial statements and unaudited interim financial statements filed on SEDAR. Stronghold is in the process of obtaining unconsolidated financial statements for Do Sonho.
Financing
There are currently 6,858,000 common shares of Kensington issued and outstanding. In conjunction with the QT, Kensington also announces a brokered private placement to raise gross proceeds of $2,000,000 by the issuance of 8,000,000 units (the "Units") at a purchase price of $.25 per Unit. Each Unit will consist of one common share and one-half of one common share purchase warrant (each whole warrant a "Warrant"). Each Warrant will entitle the holder to acquire an additional common share of Kensington at an exercise price of $.35 per common share exercisable at any time until two years from the date of the closing of the QT. The proceeds of the private placement together with Kensington's current working capital will be used to finance an exploration program on the Tucuma Property and for general working capital purposes.
Upon completion of the QT, including completion of the private placement, Kensington will have 31,158,000 common shares issued and outstanding. Upon completion of the QT, Stronghold will hold an aggregate of 16,300,000 common shares of Kensington representing approximately 52.3% of the Company's issued and outstanding shares on a non-diluted basis.
Directors, Officers and Insiders of Kensington Following the QT
It is anticipated that upon completion of the QT, the directors, officers and insiders of Kensington will be comprised of 3 nominees from Stronghold and two existing directors. The following are brief biographies of the individuals who will be expected to be the directors and officers of Kensington on completion of the QT:
Geoff Hampson, President, Chief Executive Officer, Secretary and Director
Mr. Hampson has been involved as the founder, CEO and Chairman of the Board of many public and private companies in a wide variety of industries over the last 32 years. He has been the CEO of Corelink Data Centers LLC, a Chicago based colocation provider, Peer 1 Network Enterprises Inc. an internet infrastructure and managed services company, Live Current Media Inc., an e-commerce business and Fibrox Technologies Ltd. a manufacturer of synthetic mineral fibre. In addition, he is and has been a director and officer of a number of other reporting issuers including Cricket Capital Corp., Pacific Rodera Energy Inc., International Samuel Exploration Corp and Cymat Technologies Ltd.
Albert Wu, Chief Financial Officer
Mr. Wu is a certified Management Accountant and received his Bachelor of Commerce Degree in 1969 and his MBA in 1971, both from the Chinese University of Hong Kong. In the last twenty five years, Mr. Wu has been working with public companies in providing accounting and management services on a part-time basis. He is currently the CFO of First Bauxite Corporation, Stronghold Metals Inc., Silver Lake Resources Ltd., Urastar Energy Inc. and Pacific Imperial Mines Inc., all of which are public companies listed on the TSX Venture Exchange.
Ioannis (Yannis) Tsitos, Chairman of the Board and Director
Mr. Tsitos, MSc., is the President and Chief Executive Officer of Stronghold Metals Inc. He has over 25 years experience in the Mining Industry, having spent 19 years with BHP Billiton group. He holds a B.Sc degree in Physics from the University of Athens and a Master's degree in Applied Geophysics and Geology from the University of Birmingham, U.K. Mr. Tsitos brings to the Company a wealth of knowledge and extensive experience in the mining sector focused on exploration and development and is well-known in the Canadian and international exploration communities. He has been instrumental in the identification, negotiation and execution of more than 50 exploration agreements with juniors, majors, as well as with state exploration and mining companies. He is a member of the Association for Minerals Exploration British Columbia and Prospectors and Developers Association of Canada. He is currently also President of First Bauxite Corporation.
Larry Van Hatten, Director
From May 2005 to June 2010, Mr. Van Hatten was a partner of Ernst & Young LLP, leading its Vancouver assurance practice until announcing his retirement in June 2010. Prior to May 2005, Mr. Van Hatten was the managing partner of Ellis Foster, Chartered Accountants, a Vancouver-based firm that merged into Ernst & Young LLP in May 2005. Mr. Van Hatten is currently a director of PNG Gold Corp. From June 2002 to May 2006, Mr. Van Hatten was a director of Saxon Oil Company, an international oil and gas company engaged in the acquisition, development and production of oil and natural gas reserves. Mr. Van Hatten also served on the board of the BC Children's Hospital Foundation, which he chaired from 1996 to 1999.
Mr. Van Hatten received his Chartered Accountant designation in 1975 and his Fellow Chartered Accountant designation in 2009. In 2010, he completed the academic requirements for the Directors Education Program.
Larry Timlick, Director
Since August 2004 until 2009, Mr. Timlick had been a consultant with Triplet Management. Mr. Timlick has over 23 years of technical sales and marketing experience, of which 13 years were spent with Cisco Systems Canada as Regional Western Manager and Mr. Timlick opened offices in Vancouver, Calgary, Edmonton, Regina and Winnipeg. He has also held management positions with AT&T Canada and Telex/Tulsa Computer Products. Mr. Timlick joined Aruba Networks in August 2009 as a Territory Manager. From September 2006 to December 2008, Mr. Timlick was a director and the Corporate Secretary of Stage Capital Inc. (now known as Trueclaim Exploration Inc.), formerly a capital pool company which completed its Qualifying Transaction in December 2008. Since June 2005, Mr. Timlick has been a director of CounterPath Solutions Inc. (OTC Bulletin Board), a software developer for telecom and Internet service providers.
Luis Bizzi, Director
Dr. Bizzi is a Brazilian/Italian professional geologist and Certified Investment Analyst with over 25 years experience in minerals exploration and business development in South America. His academic credentials include a PhD from the University of Cape Town in South Africa, an MBA from Fundacao Getulio Vargas in Brazil and editing of the book "Geology, Tectonics and Mineral Resources of Brazil" in 2003. He has extensive experience in minerals exploration throughout South America. He was the Exploration Manager for South America for BHP Billiton and Technical Director for South America for De Beers / Anglo American. He was also formerly the Director of Geology and Mineral Resources at CPRM - the Brazilian Geological Survey and has been a Senior Consultant at BNDES - the Brazilian Development Bank.
Tucuma Gold Project
Do Sonho, a private company incorporated under the laws of Brazil, currently holds a 100% interest in the Tucuma Property which consists of six mineral concessions covering a total of 11,456.31 hectares located in the Carajas metallogenic province in the State of Para, Brazil.
Historically, the Tucuma Property has produced significant quantities of gold from small scale mining by artisanal miners. The Tucuma Property represents an excellent opportunity to explore for both sheer hosted economic gold vein mineralization and for gold-copper systems of the IOCG ("Iron Oxide Copper Gold") type.
The Tucuma Property is located within the Carajas metallogenic province which is part of the Amazon Craton. The province is one of the premier mining districts in Brazil. Part of the Tucuma Property has been previously explored by Highgrade Ventures, Brasilca Mining Corporation, a Teck - Inco Joint Venture and by Corporacion Nacional del Cobre de Chile ("Codelco"). There is a large data base of geological, geochemical and geophysical exploration data over the region and the Tucuma Property. Only a few of the numerous identified targets have been tested by past diamond drilling programs. Stronghold filed a National Instrument 43-101 compliant report dated June 7, 2010 (the "Report") prepared by Wardrop on the Tucuma Property, which is available for viewing on SEDAR under Stronghold's profile. The Report preceded Stronghold's drill program described below.
Highlights of the 2011 drilling program conducted by Stronghold and which were announced in a March 16, 2011 press release, include 7.90m @ 3.28 g/t Au along hole T2010-3A over the Filomena target and 7.00m @ 1.32 g/t Au along hole T2010-4B over the Augusto target.
A Phase One drill program consisting of 6 diamond drill holes has now been completed to test gold targets within the Cuca concession. Five diamond holes (1,105 m of drilling) tested the Filomena target area, including the area around historic discovery hole T97-11b. Historical discovery hole T97-11b tested the Filomena gold soil geochemical anomaly, historic results are tabulated below, with the recent results.
Outcrop exposure on the Tucuma Property is less than 5%, thus historic surface soil geochemical surveys were carried out extensively to locate favourable gold targets. An area within the Cuca mineral concession, covering approximately ten square kilometres, hosts significant gold soil geochemical anomalies that remain mostly untested by drilling. The anomalies lie over a blanket of laterite and saprolite (in-situ decomposed bedrock) and are interpreted as an accumulation of gold within soil proximal to a bedrock source. Initial diamond drill testing of this extensive gold anomaly was conducted in 1997.
PRESS RELEASE
Aug. 4, 2011, 11:34 a.m. EDT
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