Emerick to Acquire Western European Properties and Apply to Graduate to Tier 2 of TSXV

Posted Under: Exchange Filings

VANCOUVER, May 8, 2012 /CNW/ – Emerick Resources Corp. (TSXV: ERC) (“Emerick” or the “Company”) is pleased to announce that it has entered into a non-binding letter agreement dated April 26, 2012 to acquire all of the outstanding shares of Medgold Resource Ltd. (“Medgold”) (the “Transaction”), a private company incorporated in England and Wales focused on the exploration and development of precious and base metals in Western Europe.

The Proposed Transaction

To acquire Medgold, the Company will issue 32,287,500 shares in its capital stock to Medgold’s shareholders in proportion to their respective shareholdings in Medgold. Emerick’s resulting issued capital will be 52,416,078 shares, of which Medgold’s shareholders will own 61.6%. All outstanding options in Emerick and Medgold will be cancelled. The Company’s current working capital position of approximately $500,000 will increase to $1.3 million.

Ralph Rushton will remain as Director and President of Emerick and Simon Ridgway as Chairman of the Board. Upon completion of the Transaction, Dan James will be appointed as Director and CEO of Emerick and will be joined on the Board by David Hall and Jeremy Martin, all of whom are directors of Medgold. Medgold has the right to appoint one additional representative to the Board after completion of the Transaction.

Based on the terms of the Transaction, Emerick will apply to the Exchange to have its listing graduated from the NEX board to Tier 2 of the TSX Venture Exchange (the “Exchange”) as a resource issuer. Upon completion of the Transaction, the Company will be known as “Medgold Resources Corp.”. Medgold is at arm’s length to the Company, and none of the directors or officers of the Company are directors, officers or shareholders of Medgold.

The Transaction will be completed by way of a legally binding sale and purchase agreement (“SPA”) which will be entered into between Emerick and each of Medgold’s shareholders. The completion of the transaction will be subject to a number of conditions, including, inter alia, entering into the SPA, approval of both Medgold’s and Emerick’s respective boards, approval of the Transaction by Emerick’s shareholders, completion of a 43-101 compliant technical report on one of Medgold’s assets and approval of the Transaction by the Exchange.

The Properties

Medgold has licences granted and under application in Italy, Spain and Portugal, targeting gold and base metal projects. These countries are favourable jurisdictions, with robust mining codes, backed by administrations who are actively seeking both foreign investment and commodity exploration companies. Upon completion of the Transaction, it is expected that the Pietratonda project, described below, will be the Company’s material property for the purposes of NI 43-101.

Italian Projects: Pietratonda and Frassine

Medgold is the owner of two gold exploration licences in Italy, each 8 square kilometers in area, called Pietratonda and Frassine, covering gold mineralization hosted within silicified limestones known as jasperoids. Their occurrence is controlled by steeply-dipping normal faults and low-angle thrust faults and their intersection with limestone-flysche contacts.

At Pietratonda gold mineralization is hosted in the limestone unit called Calcare Cavernoso and crops out in small exposures located in dense woodland. Gold-bearing jasperoids, which are typically low- to medium-grade, are extensive over a strike length of 1.1 km and widths of up to 200 m. Mineralization is typically associated with a unconformable thrust contact with underlying basement rocks with much of the contact covered by Pleistocene silica sands – which have previously been exploited by quarrying methods. Gold grades from historical rock-chip exploration programs yielded results of 0.81, 0.71 and 0.62 g/t Au. High-angle normal faults, which have been reported by previous authors, are the key exploration targets as these are commonly high-grade and are typically feeder structures to the jasperoids.

Field work has commenced at Pietratonda with a program of grid-soil sampling covering the main zone of gold mineralization. Channel-chip sampling and detailed geological mapping will also commence in the coming weeks. It is intended to commence permitting for drilling as soon as the results of this work are evaluated and drill targets have been defined.

At Frassine, mineralization hosted at the contact between limestone units and an overlying and capping flysch unit, is exposed in several locations over 1.4 kilometres of strike. Best gold grades occur in a road section, 0.8 km north of the village of Frassine, which yielded historical grab sample results ranging from trace to 43.0 g/t Au. Medgold sampling intersected 0.41 g/t Au over 12 metres from a contiguous channel-chip sample, located on the same jasperoid, approximately 120 metres northwest of the above historical anomalies. Medgold has designed field programs consisting of grid-soil sampling and systematic rock-chip sampling over the key anomalies, with the aim of defining drill targets by year-end.

Previous work at Frassine and Pietratonda was limited to geological mapping and rock-chip sampling, carried out by Anglo American in 1987-92 and Adroit in 2004-08.

Portuguese Targets

Medgold has also applied for four exploration licences in northern Portugal, targeting intrusion-related gold systems, similar to Astur Gold’s Salave project, in northwest Spain, which hosts Measured Resources of 2.1 Mt at 3.88 g/t for 268,000 oz Au, and Indicated Resources of 15.8 Mt at 2.79 g/t for 1.4 M oz Au*. At Salave, gold is typically vein-hosted, locally attaining bonanza grade status, with veins and associated alteration, commonly extensive over kilometres of strike. The Romans, who mined the high-grade Au-As veins, conducted extensive exploration and exploitation programs throughout the northern Portugal region, with many of the prospects now the focus of modern-day exploration.

* See “Technical Report on Salave Gold Deposit, Spain” by Scott Wilson RPA, February 25, 2010: http://www.asturgold.com/data/2011/12/salave_43-101.pdf

The Portuguese government is encouraging new exploration investment and making efforts to streamline the application process. The licences, some of which are subject to a public tender, are expected to be issued in mid-2012. They vary from early-stage exploration, covering large acreages of ground, to drill-ready projects. All of the projects have been subject to previous exploration, and three have conceptual resources. Field operations are planned to commence immediately following licence issuance.

Spanish Exploration

Medgold has signed a binding agreement with Ormonde Mining plc to strategically explore for gold in northern Spain. Ormonde has developed an extensive geochemical database covering an area of over 2,500 sq km, from which Medgold has defined a series of key exploration targets, and will be applying for licences in Q2 2012.

Conditions for Completion

Completion of the Transaction is subject to a number of conditions, including acceptance by the Exchange and Emerick shareholder approval. The Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management proxy circular to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.

The Exchange has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.

Qualified Person

Mr. David Cass, a director of Emerick, is a member of the Association of Professional Engineers and Geoscientists of British Columbia, and a Qualified Person in accordance with NI 43-101. Mr. Cass has reviewed and approved the technical information in this release based on reports provided to Emerick by Medgold and on reports by historic workers. Emerick, however, has not independently verified Medgold’s exploration results or those of historic workers.


“Ralph Rushton”
Ralph Rushton, President & CEO

Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statement

This news release includes certain “forward-looking information” within the meaning of Canadian securities legislation. Forward-looking statements include predictions, projections and forecasts and are often, but not always, identified by the use of words such as “seek”, “anticipate”, “believe”, “plan”, “estimate”, “forecast”, “expect”, “potential”, “project”, “target”, “schedule”, budget” and “intend” and statements that an event or result “may”, “will”, “should”, “could” or “might” occur or be achieved and other similar expressions and includes the negatives thereof. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding the expected benefits of the transaction, the completion of the transaction, the receipt of any regulatory approvals for the transaction and the potential of the properties 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. Forward-looking statements are based on a number of material factors and assumptions. Important factors that could cause actual results to differ materially from Company’s expectations include actual exploration results, changes in project parameters as plans continue to be refined, future metal prices, availability of capital and financing on acceptable terms, general economic, market or business conditions, uninsured risks, regulatory changes, delays or inability to receive required approvals, and other exploration or other risks detailed herein and from time to time in the filings made by the Company with securities regulators. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ from those described in forward-looking statements, there may be other factors that cause such actions, events or results to differ materially from those anticipated. There can be no assurance that forward-looking statements will prove to be accurate and accordingly readers are cautioned not to place undue reliance on forward-looking statements.
For further information:

Investor relations: Jaclyn Ruptash, tel: 604-801-5432
Symbol: TSXV-ERC
Shares Issued: 20.1-million