First Mexican Gold Corp. TSX-V : FMG

Company ID [CVE:FMG] Last trade:CA$0.02 Trade time:16:00:00 EST Value change:▼0 (0%)

First Mexican Receives TSX Approval for 100% Purchase of Guadalupe Project

February 15, 2012

Vancouver, British Columbia, First Mexican Gold Corp. (the `Company` or `FMG`) (TSX-V: FMG, Frankfurt: 21M) is pleased to report that the acquisition of 100% of the Guadalupe project has been completed in Yecora District of Sonora State, Mexico from Minera Internacional Milenio S.A. de C.V. (MIMSA), a wholly owned subsidiary of International Millennium Mining Corp. (IMMC). This project now is comprised of Hilda 30, Hilda 37/38 properties, Hilda 31/32 plus Santa Martha, El Hoyo, San Martin, Panda, Santa Patricia, Vianney and the Kootenay Gold Inc. La Cabana properties.

The initial properties included in the original May, 2007, “Option Agreement” with IMMC were the Hilda 30 and the Esperanza properties. This was expanded to include Hilda 37 and 38 when they were acquired as a result of the area of interest provisions in place between the parties. Under the terms of the agreement FMG was to spend US$1 million dollars to acquire 60% interest of the first pick of a property, then IMMC was to have second and third property picks for a 60% interest with FMG the fourth pick for a 60% interest. Selection was to alternate in future if more properties were acquired in the area of interest. This original Option Agreement was subsequently amended but required the terms be completed as part of the amended agreement.

FMG entered into an amended Option Agreement with International Millennium Mining Corp (IMMC) in December 2009, which allowed the Company to increase the interest to 80% of the Hilda prospects (Hilda 30/37/38) and mutual area of interest. This agreement called for the expenditure of an additional US$3 million dollars, $100,000 in timed cash payments and the issuance of 1.4 million shares of First Mexican over a 5 year period. This agreement also included a right of first refusal on the nearby property, La Esperanza. During the course of this agreement there were numerous property additions to the mutual area of interest as outlined above. This agreement was completed and, accordingly, FMG exercised the option to acquire the 80% interest, as disclosed in First Mexican Gold’s news release dated January 24, 2012. First Mexican Gold subsequently entered into a purchase and sale agreement dated January 23, 2012, as disclosed in the January 24, 2012 news release, pursuant to the terms of which, subject to TSX Venture Exchange approval, MIMSA and IMMC agreed to sell the remaining 20% interest in the Guadalupe property package, in consideration of FMG issuing 4,000,000 shares to IMMC and agreeing to pay a 2% net smelter return royalty to IMMC, 1% of which may be purchased for the sum of $1,000,000. The 4,000,000 shares will be subject to a hold period expiring on June 16, 2012. This agreement has been completed with TSX Venture Exchange acceptance as per Bulletin dated February 13, 2012.

The Company has the remaining obligations on Sub-Option Agreements:

  • Hilda Properties - The Company is required to make payments on two Sub-Option Agreements for the Hilda properties claims. The first are semi annual payments totaling US $810,000, with the last payment due November 30, 2017. The second are annual payments totaling US $614,000, with the last payment due on or before April 15, 2018.
  • Vianney fraccion III, San Marin and El Panda Claims - the Company will issue 1,600,000 shares of the Company upon confirmation of registration and recording on the Public Mining Registry, and of the transfer to the Company of 100% interest in the Claims; and pay 2.5% net smelter royalty (“NSR”) with the right to re-purchase 1.5% NSR at anytime after the date of the LOI for US$1,000,000.
  • La Cabana and Cuatas Claims " The Company is required to issue 950,000 common shares before February 16, 2015 and expend US $2,000,000 on the property before February 16, 2016. In addition, the earn-in period can be accelerated at the discretion of the Company; and the optionor retains a 1% NSR interest, which can be purchased for US $1,000,000.

First Mexican Gold Corp is an active explorer for precious metals in Mexico and has now completed the acquisition of 100% interest in the Guadalupe property package. The Company now controls a total of 15,112 hectares in this high potential exploration area.

On behalf of the Board of Directors,

Jim Voisin
President & CEO
First Mexican Gold Corp.
519 699 5352

Vancouver Head Office
#1000, 355 Burrard Street Vancouver, B.C. V6C 2G8 Canada
Phone: 604 681 7265

We seek safe harbour.

This news release includes certain forward-looking statements or information. All statements other than statements of historical fact included in this release, including, without limitation, statements relating to the potential mineralization and geological merits of the Guadalupe property and other future plans, objectives or expectations of the Company are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's plans or expectations include risks relating to the actual results of current exploration activities, fluctuating gold prices, possibility of equipment breakdowns and delays, exploration cost overruns, availability of capital and financing, general economic, market or business conditions, regulatory changes, timeliness of government or regulatory approvals and other risks detailed herein and from time to time in the filings made by the Company with securities regulators. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as otherwise required by applicable securities legislation.

Choose your Language

English German Spanish