Ely Gold Granted Extension to Close Acquisition of Additional Northern Star Mining Senior Secured Notes
July 5, 2011
Ely Gold & Minerals Inc. ("Ely Gold") is pleased to announce that,
further to news releases dated February 15 and March 4, 2011 regarding
the acquisition of up to 65% of outstanding Senior Secured Notes
("Notes") issued by Northern Star Mining Corp. ("NSM"), it has entered
into two separate amending agreements which provide for completion of
its initial acquisition to occur ten business days following the date on
which title to the NSM assets is vested in the Note holders by Court
Order. The amendment ties closing to the vesting of title rather than a
specific date, so that Ely Gold will be assured of receiving an interest
in the NSM assets in the first instance rather than an interest in the
"We are making excellent progress working with the Court and our
partners to maximize the value of the NSM assets", stated Trey Wasser,
President & CEO of Ely Gold. "The addition of Chad Williams to our
team is allowing us to more fully evaluate the assets and establish a
solid business plan post-closing. This amendment significantly lowers
the risk for Ely Gold as we will now have all property, resource and
joint venture issues fully resolved before our shareholders are asked to
approve this transaction."
Strategic Advisor Chad Williams commented, "This extension continues to
demonstrate Ely's excellent working relationship with the Note holders.
We look forward to increasing our financial exposure to the very
promising asset package that NSM had assembled in Quebec."
Pursuant to the first agreement, Ely will initially
issue 10,000,000 shares to one of the Note holders in exchange for a
6.1% interest in the NSM Assets and will purchase an option to acquire
an additional 12.2% of the NSM Assets for $6,000,000, exercisable until
April 30, 2012, for $500,000.
Pursuant to the second agreement, Ely will initially pay $4,806,634
in the aggregate to other Note holders in exchange for an 11.7% interest
in the NSM Assets and will purchase an option to acquire an additional
35% of the NSM Assets for $17,860,681, exercisable until April 30, 2012,
Both agreements remain subject to financing, definitive documentation
and required consents and approvals, including acceptance by the TSX
Venture Exchange, and to further due diligence by Ely Gold.
NSM holds several mineral properties in the Abitibi Gold Belt in Quebec
including the Malartic-Midway Property, as well as the Beacon Mill and
other plant and equipment used in its mining operations (the "NSM
Assets"). If the Note holders take possession of the NSM Assets, Ely
Gold will become a participating co-owner of the NSM Assets, and will
become manager and operator of the NSM Assets. If Ely Gold completes the
proposed acquisitions and exercises its options under both agreements,
its percentage ownership interest in the NSM Assets will be
On Behalf of the Board of Directors
Signed "Trey Wasser"
Trey Wasser, President & CEO
For further information, please contact Ely Gold & Minerals Inc. at 604-488-1104.
Neither 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.
This news release may contain forward-looking statements including but
not limited to comments regarding the timing and content of upcoming
work programs, geological interpretations, receipt of property titles,
potential mineral recovery processes, etc. Forward-looking statements
address future events and conditions and therefore, involve inherent
risks and uncertainties. Actual results may differ materially from those
currently anticipated in such statements.