Welcome!

News Feed Item

Edgewater Exploration Announces Letter of Intent With Pinecrest Resources on the Enchi Gold Project, Ghana

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 05/22/14 -- Mr. George Salamis, President and CEO of Edgewater Exploration Ltd. ("Edgewater" or the "Company") (TSX VENTURE: EDW)(OTCQX: EDWZF) is pleased to announce an executed Letter of Intent with Pinecrest Resources Ltd. ("Pinecrest")(TSX VENTURE: PCR) regarding the Enchi Gold Project ("the Project"). The transaction will have Edgewater sell its 100% interest in Cape Coast Resource Ltd. (the Company's Ghanaian subsidiary) that holds a 51% interest in the Enchi Gold Project through a joint venture agreement with Red Back Mining Ghana Limited (wholly owned by Kinross Gold Corporation) in exchange for shares of Pinecrest Resources Ltd. Edgewater will distribute the Pinecrest shares pro-rata to the shareholders of Edgewater in accordance with their share ownership of Edgewater as a return of capital.

Transaction Terms with Edgewater

Pinecrest has entered into a Letter of Intent ("Edgewater LOI") to acquire Edgewater's 51% interest(i) in the Enchi Gold Project through the purchase of Cape Coast Resources Ltd. Details of the terms include;

--  Upon closing of the Transaction, Edgewater will receive one Pinecrest
    post-consolidated common share (the "Acquisition Shares") for every five
    common shares of Edgewater issued and outstanding on the Closing, which
    will represent approximately 40% of the issued common shares of
    Pinecrest post-closing of the Transaction. All shares issued to
    Edgewater will be subject to resale restrictions as follows; 25% to be
    free trading six months and nine months from closing and the remaining
    50% twelve months from closing;
--  Edgewater will agree to distribute the Acquisition Shares pro-rata to
    its shareholders as soon as reasonably practicable after the closing of
    the Transaction;
--  Pinecrest will pay to Edgewater a cash payment of Cdn$150,000
--  The completion of the transactions contemplated by the Edgewater LOI are
    subject to the execution of a definitive agreement with Pinecrest and
    the concurrent completion of the transactions contemplated by the Red
    Back LOI

Additionally, Pinecrest will be acquiring the remaining 49% interest from Red Back Mining Ghana Limited ("Red Back") a wholly owned subsidiary of Kinross Gold Corporation ("Kinross"). Pursuant to the completion of the transaction with Edgewater and Kinross, Pinecrest will own 100% of the Enchi Gold Project and be a West African precious metals focused exploration and development company.

Transaction Terms with Red Back

Pinecrest has entered into a Letter of Intent ("Red Back LOI") to acquire Red Back's 49% interest(i) in the Enchi Gold Project. Details of the terms include;

--  Red Back will receive 19.9% of the issued and outstanding common shares
    of Pinecrest post-closing of the transaction;
--  Red Back will receive a 2% NSR on the Project with an option for
    Pinecrest to acquire 1% of the NSR at any time for US$3.5 Million;
--  Red Back will receive $10/oz on any new NI 43-101 Measured and Indicated
    Resource Estimate or any ounce of gold mined whichever occurs first.
    Such amount shall be payable in cash or, if agreeable to Pinecrest,
    common shares of Pinecrest, at Pinecrest's sole discretion, provided
    that, Pinecrest shall not be entitled to elect to pay in common shares
    if such issuance would result in Red Back holding more than 20% of the
    issued and outstanding shares of Pinecrest;
--  Red Back will have first right to process ore from the Project at its
    Chirano Mill if toll processing is considered.
--  Red Back will receive 5,000,000 share purchase warrants priced at
    $0.40/warrant exercisable for a five year term from closing of the
    Transaction.

(i) The Government of Ghana can exercise the right to own a 10% direct carried interest in the Project, If this right were exercised it would result in Pinecrest owning a 90% direct interest in the Project.

The agreements are subject to Pinecrest shareholder approval and TSX Venture Exchange acceptance.

President and CEO, George Salamis, stated; "We believe this transaction with Pinecrest is a catalyst to unlocking the value of the Enchi gold project for Edgewater shareholders. We aim to achieve this through the creation of a separately listed public company, the majority of which will be owned by Edgewater shareholders and Red Back, with Pinecrest owning an effective 100% interest in the Project. The goal of this Transaction is to create a singularly focused and separately funded West African advanced-stage gold company, leveraging off of the previous exploration successes of the Edgewater team in one of the most prolific gold districts in the world. This transaction will allow Edgewater to focus on our 100% owned Corcoesto gold project in Spain as well as have the Enchi project funded and advanced without further equity dilution to our shareholders. Edgewater recently announced an updated NI 43-101 Inferred Resource demonstrating over one million ounces of shallow gold resources (at a cut-off of 0.5 g/t gold). Our team is of the view that some of the gold resources defined within the near-surface oxidized portions are potentially amenable to heap-leaching and lower cost open pit mining. As such, with 100% ownership, Pinecrest's near-term value proposition is linked to completing a Preliminary Economic Assessment focused on the potential economics of heap-leaching at Enchi, while also testing the upside potential of the currently open-ended gold resources."

Summary of the Enchi Gold Project

The Enchi Gold Project located in south-west Ghana, West Africa covers a 50 kilometre strike length of the Bibiani Shear Zone a regional scale structure that hosts a number of major gold mines and deposits including Kinross' Chirano Gold Mine located 70 km north-east of the Project and the Bibiani Gold Deposit located 90 km north-east of the Project. The Enchi Gold Project is comprised of ten licenses totalling 696 km2 located 290 km west of the capital city of Accra. Access to the Project is on sealed roads via the regional port city of Takoradi or the mining centre of Tarkwa and then on gravel roads to Enchi (population 9,270). Good road access exists throughout the project licenses.

May 12, 2014 Edgewater Exploration announced an updated NI 43-101 Inferred Resource Estimate at a cut-off grade of 0.7 g/t Gold as follows:

                          Enchi Gold Project, Ghana
                   2014 Inferred Mineral Resource Summary
============================================================================
Cut-off                     Zone         Tonnes       Grade   Contained Gold
Au (g/t)                                           Au (g/t)         (ounces)
============================================================================
0.7                         Boin      9,551,000        1.20          368,500
0.7                         Nyam      3,716,000        1.13          135,000
0.7                        Sewum      7,549,000        1.09          264,500
                      ------------------------------------------------------
                           TOTAL     20,816,000        1.15          768,000
============================================================================

1.  CIM definition standards were followed for the resource estimate.
2.  The 2014 resource models used ordinary kriging (OK) grade estimation
    within a three-dimensional block model with mineralized zones defined by
    wireframed solids.
3.  A base cut-off grade of 0.7 g/t Au was used for reporting resources with
    a capping of gold grades at 18 g/t.
4.  A US$1,300/ounce gold price, open pit with heap leach operation was used
    to determine the cut-off grade.
5.  A density of 2.45 g/cm3was applied.
6.  Numbers may not add exactly due to rounding.
7.  Mineral Resources that are not mineral reserves do not have economic
    viability

A technical report is being prepared by independent qualified person Todd McCracken, P. Geo. of WSP Canada Inc. ("WSP") and will be filed within 45 days of the announcement in the Edgewater Exploration Ltd. news release dated May 12, 2014.

The resource estimate also evaluated the Enchi Project at a range of cut off grades between 0.3 and 2.0 g/t Au. Results are as follows;

============================================================================
Cut-off                           Tonnes            Au g/t            Ounces
============================================================================
0.3                           72,611,000              0.65         1,526,065
0.4                           53,366,000              0.76         1,304,918
0.5                           37,357,000              0.90         1,078,702
0.7                           20,816,000              1.15           767,988
0.9                           12,993,000              1.36           569,879
1.0                           10,127,000              1.49           484,388
1.2                            6,446,000              1.70           352,779
1.5                            3,011,000              2.11           204,549
1.7                            2,041,000              2.36           154,976
1.9                            1,554,000              2.54           126,727
2.0                            1,174,000              2.73           102,909
============================================================================

The 2014 Mineral Resource estimate was based on 52,385 metres of diamond and RC drilling in 646 holes as well as data from 13,799 metres in 102 surface trenches. The drilling is generally spaced at 25 to 50 metre intervals.

A two phase success contingent work program has been recommended by WSP. The first phase consists of metallurgical testing, and the completion of a Preliminary Economic Assessment ("PEA"). The second phase, contingent on the success of phase one, consists of additional drilling, detailed metallurgical testing, further technical studies and a pre-feasibility study.

The three gold zones in the inferred resource estimate, Boin, Nyam and Sewum have been drilled to an approximate vertical depth of 75-100m and approximately 60-70% of the inferred resource consists of oxide mineralization. Pinecrest Resources sees opportunities to expand resources at all zones both laterally and to depth.

Edgewater, Red Back and previous operators have discovered and identified numerous gold mineralized zones on the Enchi Project characterised as structurally-controlled, mesothermal quartz vein style gold deposits. This style of gold mineralization is the most common type of gold occurrence in West Africa.

Further potential on the Enchi Project is evidenced by results of a regional airborne study consisting of a heliborne VTEM, magnetics and radiometric survey which was flown over the Enchi Project. A total of 2,084 line km at 200m spacing were flown covering an area of 568 square kilometres. The airborne geophysical survey at Enchi indicated that; 1) Several structures correlate to known mineralization, while many other similar structures remain untested and 2) Interpretation work pin pointed several additional drill targets and combined with soil geochemistry this data is a strong tool for identification of new discoveries

Additional zones exists within the Enchi Project including several with successful first pass drilling but not part of the current resource including; Eradi; 27m grading 0.60 g/t Au including 10m grading 1.3 g/t Au, Kojina Hill; 68 m grading 1.14 g/t Au, 59m grading 0.77 g/t Au including 28m grading 1.22 g/t Au, and Boin NW; 7.0m grading 0.95 g/t Au and 3.0m grading 0.67 g/t Au.

Further high priority targets which warrant additional detailed exploration have been defined by trenching and auger drilling in 2012 and 2013 including; Boin Northwest; 10m grading 1.64 g/t and 2m grading 2.74 g/t Au, Sewum-Tokosea Trend; 31m grading 0.31 g/t Au and 5m grading 0.68 g/t Au, and Achimfo; 24m grading 0.84 g/t Au and 22m grading 0.62 g/t Au.

Sample analyses have been conducted at independent commercial facilities SGS and Intertek Labs in Tarkwa Ghana. All sample analyses was completed using industry standard geochemical and fire assay practices and included a rigorous Quality Assurance / Quality Control (QA/QC) program consisting of the insertion of standards, blanks and duplicate samples randomly into the sample stream. A review of the QA/QC results shows no significant bias and all results are considered highly reliable.

Mr. Gregory Smith, P.Geo, the Vice-President of Exploration of the Company, is the Qualified Person as defined by NI 43-101 and has prepared and approved the technical data and information in this news release.

Financing

Pinecrest will complete a non-brokered private placement (the "Private Placement") financing, issuing 15 million subscription receipts (each a "Subscription Receipt") at a purchase price of CDN$0.20 per Subscription Receipt to raise aggregate gross proceeds of CDN$3,000,000. Each Subscription Receipt will entitle the holder to acquire one post-consolidated unit (each a "Unit") of Pinecrest for no additional consideration upon the closing of the Transaction. Each Unit will consist of one post-consolidated common share ("Common Share") in the capital of Pinecrest and one post-consolidated common share purchase warrant (each whole warrant a "Warrant"). Each Warrant will entitle the holder to acquire one post-consolidated common share of Pinecrest at a post-consolidated exercise price of CDN$0.30 for a period of 24 months from the completion of the Private Placement.

None of the securities sold in connection with the Private Placement will be registered under the U.S. Securities Act of 1993, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

A Finder's Fee of 6.0% of the gross proceeds raised under the Private Placement will be paid in cash or at the election of the Finder in post-consolidated common shares of Pinecrest on the closing of the Transaction.

All securities issued in connection with the Private Placement will be subject to a statutory hold period of four months plus one day from the closing date of the Private Placement. The Private Placement is subject to Exchange acceptance.

The offer and sale of the securities offered in the Private Placement has not been and will not be registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, and such securities may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in the United States or in any jurisdiction in which such offer, sale or solicitation would be unlawful.

Post-Transaction Capital Structure

On completion of the Consolidation, the Private Placement and the closing of the Transaction, Pinecrest will have approximately 51,163,887 common shares issued and outstanding and 74,906,387 shares common on a fully diluted basis. The proposed equity ownership of Pinecrest is anticipated to be as outlined below:

Holder                                                  Percentage Ownership

Red Back                                                               19.9%
Edgewater                                                           39.6%(i)
Original Pinecrest shareholders                                        11.2%
New Capital (Private Placement)                                        29.3%
----------------------------------------------------------------------------
                                                                      100.0%

(i) The Acquisition Shares are to be distributed by Edgewater to its shareholders on a pro rata basis as soon as reasonably practicable after the closing of the Transaction.

Resale Restrictions for Pinecrest Shares Issued to Edgewater Shareholders

The Pinecrest common shares issued to Edgewater shareholders will be subject to resale restrictions and will be released according to the following schedule from the closing date of the Transaction:

6 months            25% release
9 months            25% release
12 months           50% release

Further updates on the status of the Transaction will be provided by future press releases as matters progress.

The closing of the transactions contemplated by the Red Back LOI and the Edgewater LOI are subject to a number of conditions, including but not limited to the execution of separate definitive agreements; normal conditions precedent for transactions such as these, including the delivery of title and corporate opinions and the completion of satisfactory due diligence, approval of the shareholders of Pinecrest to the proposed change of control of Pinecrest, the acceptance of the Exchange, the completion of a consolidation of the common shares of Pinecrest, as described below, and the completion by Pinecrest of a financing to raise not less than CDN$3,000,000. There can be no assurance that the Transaction will be completed as proposed or at all.

About Edgewater Exploration Ltd.

Edgewater is a mineral development and exploration company focused on the development of precious metal properties. Edgewater has an experienced mine building and operating team with a track record of success. The Company is currently developing the Corcoesto Gold Project in northwest Spain.

On behalf of the board of

EDGEWATER EXPLORATION LTD.

George Salamis, President and CEO

This news release contains certain forward-looking statements, including statements regarding the proposed transactions with Pinecrest, the proposed Private Placement and Consolidation of the Pinecrest share capital and the closing of the transactions contemplated thereby, the use of net proceeds of the Private Placement, future plans and objectives of the Company and the business of the Company.

Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", anticipates" or "does not anticipate" "plans", "estimates" or "intends" or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be "forward-looking statements". Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to materially differ from those reflected in the forward-looking statements.

Safe Harbor Statement under the United States Private Securities Litigation Reform Act of 1995: Except for the statements of historical fact contained herein, the information presented constitutes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements including but not limited to those with respect to the price of gold, potential mineralization, reserve and resource determination, exploration results, and future plans and objectives of the Company involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement of Atlas to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

"Neither the 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."

Contacts:
Edgewater Exploration Ltd.
Ryan King
Vice President
(604) 628-1012
[email protected]

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
ChatOps is an emerging topic that has led to the wide availability of integrations between group chat and various other tools/platforms. Currently, HipChat is an extremely powerful collaboration platform due to the various ChatOps integrations that are available. However, DevOps automation can involve orchestration and complex workflows. In his session at @DevOpsSummit at 20th Cloud Expo, Himanshu Chhetri, CTO at Addteq, will cover practical examples and use cases such as self-provisioning infra...
As DevOps methodologies expand their reach across the enterprise, organizations face the daunting challenge of adapting related cloud strategies to ensure optimal alignment, from managing complexity to ensuring proper governance. How can culture, automation, legacy apps and even budget be reexamined to enable this ongoing shift within the modern software factory? In her Day 2 Keynote at @DevOpsSummit at 21st Cloud Expo, Aruna Ravichandran, VP, DevOps Solutions Marketing, CA Technologies, was jo...
"Storpool does only block-level storage so we do one thing extremely well. The growth in data is what drives the move to software-defined technologies in general and software-defined storage," explained Boyan Ivanov, CEO and co-founder at StorPool, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
As Marc Andreessen says software is eating the world. Everything is rapidly moving toward being software-defined – from our phones and cars through our washing machines to the datacenter. However, there are larger challenges when implementing software defined on a larger scale - when building software defined infrastructure. In his session at 16th Cloud Expo, Boyan Ivanov, CEO of StorPool, provided some practical insights on what, how and why when implementing "software-defined" in the datacent...
Blockchain. A day doesn’t seem to go by without seeing articles and discussions about the technology. According to PwC executive Seamus Cushley, approximately $1.4B has been invested in blockchain just last year. In Gartner’s recent hype cycle for emerging technologies, blockchain is approaching the peak. It is considered by Gartner as one of the ‘Key platform-enabling technologies to track.’ While there is a lot of ‘hype vs reality’ discussions going on, there is no arguing that blockchain is b...
Blockchain is a shared, secure record of exchange that establishes trust, accountability and transparency across business networks. Supported by the Linux Foundation's open source, open-standards based Hyperledger Project, Blockchain has the potential to improve regulatory compliance, reduce cost as well as advance trade. Are you curious about how Blockchain is built for business? In her session at 21st Cloud Expo, René Bostic, Technical VP of the IBM Cloud Unit in North America, discussed the b...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
Is advanced scheduling in Kubernetes achievable?Yes, however, how do you properly accommodate every real-life scenario that a Kubernetes user might encounter? How do you leverage advanced scheduling techniques to shape and describe each scenario in easy-to-use rules and configurations? In his session at @DevOpsSummit at 21st Cloud Expo, Oleg Chunikhin, CTO at Kublr, answered these questions and demonstrated techniques for implementing advanced scheduling. For example, using spot instances and co...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
The cloud era has reached the stage where it is no longer a question of whether a company should migrate, but when. Enterprises have embraced the outsourcing of where their various applications are stored and who manages them, saving significant investment along the way. Plus, the cloud has become a defining competitive edge. Companies that fail to successfully adapt risk failure. The media, of course, continues to extol the virtues of the cloud, including how easy it is to get there. Migrating...
The use of containers by developers -- and now increasingly IT operators -- has grown from infatuation to deep and abiding love. But as with any long-term affair, the honeymoon soon leads to needing to live well together ... and maybe even getting some relationship help along the way. And so it goes with container orchestration and automation solutions, which are rapidly emerging as the means to maintain the bliss between rapid container adoption and broad container use among multiple cloud host...
Imagine if you will, a retail floor so densely packed with sensors that they can pick up the movements of insects scurrying across a store aisle. Or a component of a piece of factory equipment so well-instrumented that its digital twin provides resolution down to the micrometer.
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settle...
The need for greater agility and scalability necessitated the digital transformation in the form of following equation: monolithic to microservices to serverless architecture (FaaS). To keep up with the cut-throat competition, the organisations need to update their technology stack to make software development their differentiating factor. Thus microservices architecture emerged as a potential method to provide development teams with greater flexibility and other advantages, such as the abili...
Product connectivity goes hand and hand these days with increased use of personal data. New IoT devices are becoming more personalized than ever before. In his session at 22nd Cloud Expo | DXWorld Expo, Nicolas Fierro, CEO of MIMIR Blockchain Solutions, will discuss how in order to protect your data and privacy, IoT applications need to embrace Blockchain technology for a new level of product security never before seen - or needed.