Gencor Group to Make Canadian CDN $ 150 Million Investment in Eldorado Corporation Ltd. and HRC Development Corporation.VANCOUVER, B.C.--(BUSINESS WIRE)--Jan. 31, 1996--Eldorado Corporation Ltd., HRC HRC Human Rights Campaign HRC Human Rights Council (UN) HRC Human Rights Commission HRC Hard Rock Cafe HRC Hillary Rodham Clinton (democratic senator/presidential candidate; former first lady) Development Corporation and Gencor Group are pleased to announce that the Companies have executed a letter of intent under which Eldorado and HRC Development will acquire an international portfolio of strategic mining assets from the Gencor Group of South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. . The transaction, based on the recent stock prices of Eldorado and HRC Development, is valued at approximately CDN (Content Delivery Network) A system of distributed content on a large intranet or the public Internet in which copies of content are replicated and cached throughout the network. $ 150 million. The acquisition of these Gencor Group gold assets located in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. and Turkey, combined with Eldorado and HRC Development's assets, entrepreneurial management and international mining and exploration experience, will create a new international gold producer poised to become a senior mining company. The package includes the 100,000 ounce per year Sao Bento A data structure used to store embedded documents in an OpenDoc compound document. Bento, which stands for lunch box in Japanese, provides a "container" to hold the data and a format for defining its contents. Gold Mine in Brazil; five regional exploration/development projects also in Brazil; twenty exploration/development projects in Turkey; five exploration/development properties in North America, and the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. rights to use and sub-license Gencor Group's proprietary BIOX (R) bacterial oxidation Bacterial oxidation is a bio-hydrometallurgical process developed for pre-cyanidation treatment of refractory gold ores or concentrates. The bacterial culture is a mixed culture of Thiobacillus ferrooxidans, Thiobacillus thiooxidans and technology. Eldorado and HRC Development will pay for these assets by issuing voting and non- voting treasury shares with the result that Gencor Group will own 49.9 percent of the equity of Eldorado and HRC Development on a fully diluted basis and 40 percent of the outstanding voting rights Voting rights The right to vote on matters that are put to a vote of security holders. For example the right to vote for directors. voting rights The type of voting and the amount of control held by the owners of a class of stock. in Eldorado and HRC Development. The letter of intent consummates discussions that were initiated over 12 months ago among the three companies. Upon closing of the acquisition, the Eldorado Group will have: - Four producing Group gold mines totaling 200,000 ounces in annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. gold production. - 5.4 million ounces in current Group gold resources. - 15,625 square miles A square mil is a unit of area, equal to the area of a square with sides of length one mil. A mil is one thousandth of an international inch. This unit of area is usually used in specifying the area of the cross section of a wire or cable. in exploration concessions on five continents. - US$ 25 million in annual exploration expenditures by the Eldorado Group. - The BIOX (R) technology rights for North America creating an industry leader in refractory refractory Material that is not deformed or damaged by high temperatures, used to make crucibles, incinerators, insulation, and furnaces, particularly metallurgical furnaces. ore treatment. - The mission to have 500,000 ounces in annual gold production within five years and 1,000,000 ounces in annual gold production in ten years. The Eldorado Group includes, Eldorado Corporation Ltd., HRC Development Corporation, Croesus Mining NL, Treminco Resources Ltd. and Energold Mining Ltd. STATEMENT FROM GENCOR GROUP Gary Maude, Executive Director of Gencor Group responsible for gold commented "Today we have made an investment in a management team that has demonstrated an ability to discover and acquire gold deposits and place them into production in a cost effective manner. We are very pleased to be associated with such a group, as we believe Eldorado and HRC Development will be able to maximize the values of these international gold assets for their shareholders including ourselves. We look forward to the growth of Eldorado and HRC Development under the current management and we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the potential returns that this investment will generate. We intend to foster the entrepreneurial nature of Eldorado and HRC Development as independent companies and anticipate future investment opportunities in keeping with both our growth strategies in gold." STATEMENT FROM ELDORADO AND HRC DEVELOPMENT Richard Barclay, President and Chief Executive Officer of Eldorado Corporation Ltd. and HRC Development Corporation stated "This asset package will establish Eldorado as an intermediate gold producer, and this transaction with one of the world's largest international mining companies will assist us to achieve our growth objectives more rapidly than would be possible for Eldorado in isolation. We believe this acquisition with Gencor Group sets the stage for Eldorado to become a senior gold producer. In addition, upon completion of this acquisition HRC Development will have a geographically diverse world- class portfolio of exploration and development properties with several multi-million ounce gold targets. We are pleased that the Gencor Group has recognized our ability to effectively explore, develop and operate gold properties world-wide and we look forward to the future rewards of our expanded portfolio." ELDORADO ACQUIRED ASSETS Upon completion of the transaction, Eldorado will own 100 percent of the 100,000 ounce per year Sao Bento Gold Mine and "back-in" rights to the Piaba Gold Project in Brazil, 100 percent of three Turkish Advanced Development Gold Projects, as well as a North American License for the BIOX (R) bacterial oxidation technology. As a result of the acquisition, Eldorado's gold production in 1996 will increase five-fold to approximately 165,000 ounces. Gold production is estimated to further increase to 185,000 in 1997 and approximately 250,000 ounces in 1998. Eldorado Group's gold resources will increase more than 150 percent to over 5.4 million ounces. HRC DEVELOPMENT ACQUIRED ASSETS Upon completion of the transaction, HRC Development will become the owner of a world class international exploration portfolio, totaling approximately 13,000 square miles, with substantial exposure to North and South America and Turkey. HRC Development's properties will range from grass roots grass roots pl.n. (used with a sing. or pl. verb) 1. People or society at a local level rather than at the center of major political activity. Often used with the. 2. The groundwork or source of something. exploration projects to development projects, which cover some of the most geologically prospective areas in the world for the discovery of mineral deposits. GENCOR GROUP'S INVESTMENT Eldorado will issue approximately 12.2 million common shares and approximately 11.6 million non-voting shares to Gencor Group which will result in the Gencor Group owning 49.9 percent of the equity of Eldorado on a fully diluted basis and 40 percent of the outstanding voting rights in Eldorado. In addition, HRC Development will issue approximately 7.7 million common shares and approximately 4.9 million non-voting shares to the Gencor Group which will result in the Gencor Group owning 49.9 percent of the equity of HRC Development on a fully diluted basis and 40 percent of the outstanding voting rights in HRC Development. The non-voting shares of Eldorado and HRC Development will be convertible into voting shares Voting Shares Shares that give the stockholder the right to vote on matters of corporate policy making as well as who will compose the members of the board of directors. Notes: Different classes of shares, such as preferred stock, sometimes don't allow for voting rights. of Eldorado and HRC Development, respectively on a 1:1 basis, provided that at no time would Gencor Group's voting rights exceed 40 percent in either company. As the Gencor Group wishes to preserve the independence of the management of Eldorado and HRC Development, Gencor does not wish to have voting rights exceeding 40 percent of either Company. At current market values of CDN$ 5.00 per Eldorado share and CDN$ 2.00 per HRC Development share, the value of Gencor Group's investment is approximately CDN$ 150 million. Management of Eldorado and HRC Development will remain unchanged. Gencor Group will have minority representation on the Eldorado and HRC Development Boards. CLOSING OF THE TRANSACTION The letter of intent is a non-binding statement of the parties intention to negotiate definitive agreements for the acquisition of the gold assets from the Gencor Group. The completion of the transaction is subject to several conditions including agreement being reached on the legal contracts, approval by the shareholders of Eldorado and HRC, required regulatory approvals and satisfactory due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. by all parties. Shareholders meetings of Eldorado and HRC Development are expected to be held in June, 1996, at which time shareholders will be asked to approve these transactions. DESCRIPTION OF ASSETS TO BE ACQUIRED BY ELDORADO Brazil Sao Bento Gold Mine The Sao Bento Gold Mine is located in the Santa Barbara Santa Barbara (săn'tə bär`brə, –bərə), city (1990 pop. 85,571), seat of Santa Barbara co., S Calif., on the Pacific Ocean; inc. 1850. municipality MUNICIPALITY. The body of officers, taken collectively, belonging to a city, who are appointed to manage its affairs and defend its interests. , Minas Gerais Minas Gerais (mē`nəs zhərīs`) [Port.,=various mines], state (1996 pop. 16,660,691), 226,707 sq mi (587,171 sq km), E Brazil. The capital is Belo Horizonte. Minas Gerais continues to produce more than half of Brazil's mineral wealth. State, Brazil. Gold production in 1995 was approximately 96,000 ounces at a cash cost of approximately US$ 300 per ounce. The Sao Bento Mine lies in the famous "Quadrilatero Ferrifero" of the Minas Gerais. Gold mineralization Mineralization The process by which the body uses minerals to build bone structure. Mentioned in: Rickets mineralization, n the bioprecipitation of an inorganic substance. is located in a banded iron formation Banded iron formations (also known as banded ironstone formations or BIFs) are a distinctive type of rock often found in primordial sedimentary rocks. The structures consist of repeated thin layers of iron oxides, either magnetite or hematite, alternating with bands , similar to Echo Bay's Lupin Gold Deposit in the Northwest Territories Northwest Territories, territory (2001 pop. 37,360), 532,643 sq mi (1,379,028 sq km), NW Canada. The Northwest Territories lie W of Nunavut, N of lat. 60°N, and E of Yukon. of Canada. Ore at Sao Bento is mined underground by cut and fill methods. The average grade of mined ore is 0.321 oz/ton gold, with relatively insignificant amounts of silver. Gold is recovered utilizing a combination of bioxidation and pressure oxidation. In place geological reserves and in situ In place. When something is "in situ," it is in its original location. resources as at January 1995 are summarized in the following table:
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Tons Oz/Ton Gold Ounces
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Proven 443,000 0.329 145,747
Probable 1,964,000 0.332 652,048
Possible 2,466,000 0.355 875,430
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Total 4,873,000 0.343 1,673,225
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The deposit is open both along strike and to depth and the potential to add additional reserves is considered excellent. Upon completion of the acquisition, Eldorado intends to institute an optimization study with the goal of increasing production and significantly lowering operating costs operating costs npl → gastos mpl operacionales . Based on preliminary investigations by an independent engineering firm, Eldorado believes such goals are achievable. Piaba Gold Deposit The Piaba gold deposit is an advanced project located in Northern Brazil. Eldorado will have the right to acquire a 50 percent interest in the property by spending US$ 2.2 million. A feasibility study "A Feasibility Study" is an episode of the original The Outer Limits television show. It first aired on 13 April, 1964, during the first season. It was remade in 1997 as part of the revived The Outer Limits series with a minor title change. was completed in May 1995. Annual production of 32,000 ounces per year is forecast at a cash operating cost of US$ 195 per ounce. Initial capital costs for the project are estimated at US$ 16 million. Recoverable gold reserves are approximately 270,000 ounces in 6 million tons of ore grading 0.045 oz/ton. These reserves could be mined by open pit methods and processed by conventional milling technology. There is excellent potential for expansion of reserves. Multiple high grade primary gold veins have been intersected below the saprolite sap·ro·lite n. Soft, partially decomposed rock rich in clay and remaining in its original place. saprolite ore zone. Turkey Eldorado will acquire 100 percent of three advanced gold development projects in Turkey. Reserves and resources of these three projects currently total over 1,000,000 ounces of gold. These three advanced projects are described in more detail below. Kaymaz Gold Project The Kaymaz Project is located in West Central Turkey. A feasibility study was completed in September 1994 and the project is in the final stages of obtaining permitting. Based on 144 drill holes totaling 33,000 feet, open pit mineable reserves of the Kaymaz Project are estimated as follows:
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Tons Oz/ton Gold Ounces
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Mineable-Main Zone 915,000 0.21 190,000
Mineable-Topkaja Zone 70,000 0.15 10,000
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Total 985,000 0.20 200,000
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WT Project The WT Project is located in Western Turkey. A conceptual production study completed in November, 1994, indicated a possible future project could be very attractive. Reserves at WT are detailed below:
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Tons Oz/ton Gold Ounces
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Drill Indicated 1,540,000 0.38 580,000
Possible 700,000 0.38 250,000
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Total 2,240,000 0.38 830,000
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Kucukdere Project The Kucukdere Project is located in the province of Balikesir. Based on 349 drill holes mineable open pit reserves are estimated as follows:
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Tons Oz/ton Gold Ounces
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Proven 1,400,000 0.19 260,000
Probable 150,000 0.19 30,000
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Total 1,550,000 0.19 290,000
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There is excellent potential to add additional reserves. BIOX (R) Technology Gencor Group is the leader in bacterial oxidation gold extraction Gold extraction or recovery from its ores may require a combination of comminution, mineral processing, hydrometallurgical, and pyrometallurgical processes to be performed on the ore. technology through its BIOX (R) process. The BIOX (R) process allows mining companies to process metallurgically complex refractory gold ores at significantly lower capital and operating costs than conventional technologies, thereby enhancing the economic viability of these gold deposits. The BIOX (R) process is being used commercially in five operating gold mines including the Sao Bento mine in Brazil and the Ashanti Gold mine in Ghana, one of the world's largest gold producers. Eldorado will receive the sole North American License to use and sub-license the BIOX (R) process. Eldorado views the acquisition of the BIOX (R) process as a springboard to acquire equity interests in gold deposits which would benefit from this technology, thereby adding to the Company's reserve/production base. DESCRIPTION OF ASSETS TO BE ACQUIRED BY HRC DEVELOPMENT CORPORATION Brazil HRC Development will acquire various interests in one of the largest exploration portfolios in Brazil. The portfolio includes exploration and development properties encompassing an area of approximately 8,900 square miles and covering four major gold belts and one major copper-nickel belt. Many of these properties have been worked by local artisan miners and have established gold resources. Gencor Group has spent approximately US$ 25 million on this portfolio including the Piaba deposit over a ten year period and has been successful in identifying gold and base metal targets. The property package represents a unique opportunity for HRC Development. The large land positions host significant gold anomalies in highly prospective areas where modern exploration can add value. With changes in its mining laws and investment code, Brazil has become a attractive jurisdiction for mineral exploration. Aurizona Regional Gold Project The Aurizona Regional Project is the largest in terms of area and identified gold potential. It is located in Northern Brazil within the Guyana Shield. Exploration has outlined gold mineralization along an east trending belt measuring 19 miles by 16 miles. Numerous "garimpeiro" diggings indicate stockwork gold systems with dimensions up to 1,500 feet by 600 feet with possible extensions of 5,000-10,000 feet, similar in size to the Las Cristinas deposit in Venezuela. Outside the main gold belt little work has been done. Regional aeromagnetics aer·o·mag·net·ics n. (used with a sing. verb) The science of magnetic characteristics associated with atmospheric conditions. aer indicate large circular magnetic anomalies Magnetic Anomaly may refer to:
Goias/Western Minas Gerais Gold Project The Goias/Western Minas Gerais Project covers 2,000 square miles of favorable geology similar to two major gold deposits in the area; Morro do Ouro, 170,000 ounces per year and Crixas, 140,000 ounces per year. The project area has large gold geochemical soil anomalies with Morro do Ouro style mineralization extending up to two miles in length. In addition, high grade quartz veins have been identified grading up to 1.87 oz/ton gold in greenstone green·stone n. Any of various altered basic igneous rocks colored green by chlorite, hornblende, or epidote. greenstone Noun NZ a type of green jade used for Maori carvings and ornaments terrain similar to that at the Crixas gold mine. A program of geochemical sampling and geophysics geophysics, study of the structure, composition, and dynamic changes of the earth, its atmosphere, hydrosphere and magnetosphere, based on the principles of physics. is planned with follow-up drilling. Cuiaba Slate Belt Gold Project The Cuiaba Project area covers 700 square miles in an area thought to have considerable potential to host heap leachable bulk tonnage deposits in stockwork disseminated systems. Considerable alluvial/saprolite garimpeiro mining is taking place in the district producing an estimated 50,000-100,000 ounces of gold per year along a northeast trending belt over 60 miles in length. Barro Alto Barro Alto is a small town and municipality in northern Goiás state, Brazil, famous for its nickel mine and production of rubber. The population was 5,625 in 2005 and the total area of the municipality was 1,231.8 km². Cu-Ni, PGM PGM Program PGM Pragmatic General Multicast PGM Phosphoglucomutase PgM Program Manager PGM Platinum Group Metal PGM Pagemaker (software) PGM Portable Gray Map PGM Precision Guided Munition Project The Barro Alto property covers 910 square miles of a major layered ultrabasic ul·tra·ba·sic adj. Containing magnesium and iron and only a very small amount of silica. Used of igneous rock. ultrabasic Containing magnesium and iron and only a very small amount of silica. complex which hosts base metal nickel-copper mineralization in sheared sheared adj. Shaped or finished by shearing, especially cut or trimmed to a uniform length: a sheared fur coat. Adj. 1. , disseminated and massive sulfide zones. Within the ultrabasic complex there is current nickel production and Inco is developing a 40 million ton laterite laterite Soil layer rich in iron oxide and sometimes aluminum, derived from a wide variety of rocks by leaching. It forms in tropical and subtropical regions where the climate is humid. nickel deposit. The Barro Alto property covers extensions of the deposit. The highly prospective property is being examined by a number of major mining companies for a possible joint venture. Turkey HRC Development will acquire a portfolio of more than 20 exploration properties in Turkey. Most of the projects are grassroots in nature, however reconnaissance exploration and drilling have resulted in the discovery of important gold mineralization on the Sahinli property. The Sahinli Project comprises a series of high grade veins for which drilling indicates the potential to host 250,000 ounces of open pittable gold reserves. The potential to add significant underground reserves is considered excellent. Core drilling is currently underway at the property. North American Property Portfolio HRC Development may also acquire indirect interests in several exploration properties in Nevada. Further Information Further detailed information regarding the assets to be acquired by Eldorado and HRC Development will be included in subsequent shareholder material. ON BEHALF OF ELDORADO CORPORATION LTD. "Richard J. Barclay" Richard J. Barclay President & CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Eldorado Corporation Ltd. ON BEHALF OF GENCOR GROUP "Gary Maude" Gary Maude Executive Director Gold Gencor Group ON BEHALF OF HRC DEVELOPMENT CORPORATION "Richard J. Barclay" Richard J. Barclay President & CEO HRC Development Corporation Eldorado Corporation Ltd's shares trade on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. ("TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). "), and the Vancouver Stock Exchange Vancouver Stock Exchange (VSE) A securities and options exchange in Vancouver, British Columbia, (Canada), specializing in venture capital companies. Vancouver Stock Exchange See Canadian Venture Exchange (CDNX). ("VSE See DOS/VSE. VSE - Virtual Storage Extended ") Symbol - ELD. HRC Development Corporation's shares trade on the Vancouver Stock Exchange, Symbol - HDC (Hard Disk Controller) See disk controller. HDC - Disk Controller . Neither the TSE, nor the VSE have approved or disapproved the form or content of this release. CONTACT: Canada & USA David Hottman Eldorado Corporation Ltd. HRC Development Corporation (604) 687-4018 (604) 687-4026 (FAX) or Europe & Africa Tony Addison Manager, Corporate Finance Gencor Group 27-11-376-2457 27-11-833-1417 (FAX) or Australia & Asia Ron Manners Director Eldorado Corporation Ltd. 61-90-91-2222 61-90-21-7724 (FAX) |
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