Queenston Mining And Vault Minerals Agree To Merger To Consolidate Holdings In The Kirkland Lake Gold Camp
Summary of Transaction
Under terms of the Amalgamation announced today, Vault shareholders will receive one Queenston common share for every 10 Vault common shares. In addition, all convertible securities of Vault will be exercisable in accordance with their terms for common shares of Queenston on the same basis. Based on approximately 40 million common shares of Vault issued and outstanding, Queenston will issue approximately 4 million Queenston common shares pursuant to the Amalgamation. The arm's length transaction is expected to close on or before April 30, 2010, and upon closing, assuming no exercise of any existing convertible securities of Vault or Queenston, Queenston will have approximately 68 million common shares outstanding, of which approximately 6% will be held by the former shareholders of Vault. The Amalgamation values the Vault shares at $0.50 and represents a premium of approximately 50% to Vault shareholders based on the volume-weighted average price over the last 20 days that each company's shares actually traded. Based on the volume-weighted average price of the Vault and Queenston shares over the last 20 market days that included days of no trading activity the premium is 59%.
The transaction is subject to customary conditions, including regulatory and Vault shareholder approval. Vault intends to hold a special meeting of its shareholders on or before April 30, 2010 to consider the Amalgamation. Full details of the Agreement will be described in a management information circular to be filed with regulatory authorities and mailed to Vault shareholders in accordance with applicable securities laws. Vault's board of directors has unanimously approved the proposed transaction, following the recommendation of its special committee comprising solely independent directors. The special committee has received a verbal opinion from CI Capital Markets Inc. that, subject to the assumptions, limitations and qualifications stated in such opinion, the consideration to be received under the terms of the Amalgamation is fair, from a financial point of view, to Vault shareholders as of the date of the verbal opinion. Each of the directors and officers of Vault have signed support agreements indicating their intention to support the transaction, comprising approximately 23% of Vault's outstanding common shares.
Charles Page, President and CEO of Queenston commented, "This is an exciting time for both Queenston and Vault shareholders as this transaction delivers significant value. The Vault properties are contiguous and complement Queenston's assets in the camp that when combined form the largest land holdings in the district. The business combination expands our exploration exposure in Kirkland Lake and supports our strategy of returning to producer status".
Joseph Horne, President and CEO of Vault stated, "This merger boasts obvious synergies. Those that know the Kirkland gold camp will especially appreciate the complementary nature of our respective property portfolios. A consolidated land package will drive much more efficient exploration and access to greater capital will accelerate future development of our properties. Additional significant benefits to accrue to Vault shareholders will be enhanced share liquidity and exposure to Queenston's more advanced stage gold projects. We have tremendous respect for the Queenston group, share their enthusiasm for the camp's potential and look forward to integrating our technical team and shareholders"
Benefits to Queenston Shareholders
- Creates a dominant land position covering approximately 190 square kilometers along major gold trends in the Kirkland Lake area
- Expands potential along trend of our existing exploration success with emphasis on the Upper Beaver project
- Provides exposure to both high-grade and bulk tonnage opportunities in the King Kirkland area of the camp
- Strong balance sheet with over $45 million in cash.
- Provides Vault shareholders with greater exposure to the Kirkland Lake camp that includes significant gold resources in five deposits
- All share transaction allows Vault shareholders to continue to participate in the exploration upside in this evolving gold camp
- The transaction provides greater liquidity to Vault shareholders
- The contiguous nature of the consolidated land position facilitates much more efficient exploration
About Queenston
Queenston maintains a significant land package in the Kirkland Lake gold camp containing 22 contiguous properties totaling approximately 15,600 hectares or 964 mineral claim units. The Company's strategy is to return to producer status through the development of four 100% owned gold projects including the Upper Beaver, McBean, Anoki and Upper Canada. The Company is also carrying out deep exploration targeting the new South Mine Complex with joint venture partner Kirkland Lake Gold Inc. on the South Claims property and on its 100% owned AK property. Queenston is well financed and has an exploration budget for 2010 of $15 million employing up to 12 diamond drill rigs.
About Vault
Vault Minerals Inc. is a junior gold exploration company focused on its large property portfolio in the prolific Kirkland Lake gold camp of northern Ontario, where in excess of 24 million ounces of gold have been produced at a recovered grade of 16.1 g/t Au (0.47 oz/ton). Vault's capital consists of 40,204,543 issued and outstanding common shares which are listed for trading on the TSX Venture Exchange under the symbol 'VMI'.
FOR FURTHER INFORMATION
Queenston Mining Inc.
Charles E. Page, P. Geo., President and CEO
(416) 364-0001 (ext. 224)
Hugh D. Harbinson, Chairman
(416) 364‐0001 (ext. 225)
Andreas Curkovic, Investor Relations
(416) 577‐9927
Email: info@queenston.ca
Website: www.queenston.ca
Vault Minerals Inc.
Joe Horne, President and CEO
(902) 402-8266
Email: contact@vaultminerals.com
Website: www.vaultminerals.com
Queenston's Forward Looking Statement
Except for historical information, this News Release may contain certain "forward looking statements". These statements may involve a number of known and unknown risks and uncertainties and other factors that may cause the actual results, level of activity and performance to be materially different from the Company's expectations and projections. A more detailed discussion of the risks is available in the "Annual Information Form" filed by the Company on SEDAR at www.sedar.com.
Vault's Forward Looking Statement
This News Release may contain forward-looking statements that involve inherent risks and uncertainties. Actual events or results could differ materially from the Company's forward looking statements and expectations, and the Company disclaims any obligation to update these forward-looking statements.
"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".
Vault Intersects 27.8 gAu/t over 1.4 m and 8.8 gAu/t over 1.75 m at Blue Vein
The Blue Vein represents the second of four areas being tested during Phase I drilling on Vault's 3,100-acre Lebel property situated in Kirkland Lake, Ontario. The Blue Vein consists of sub-parallel mineralized structures located 700 m south of the past-producing Bidgood Mine that historically produced 165,000 oz gold at a recovered grade of 9.2 gAu/t (0.27 ozAu/t). These structures extend at least 800 m on surface along strike with limited historical trenching or drilling having been carried out. Recent exploration work has been confined primarily to the northeast and southwest ends of the structure.
Most drill holes were designed on approximately 8 to 15 m centres to assist in defining a resource in areas where previously-reported trench channel samples returned up to 95.1 gAu/t over 2.7 m and 73.0 gAu/t over 1.0 m. Previous drilling in 2003-4 returned intersections of 11.6 gAu/t over 2.8 m, 30.8 gAu/t over 1.3 m and 18.8 gAu/t over 0.9 m to a vertical depth of 80 m.
Mineralization generally consists of 3-20% coarse disseminated pyrite hosted within and on margins of 0.2 to 0.6 m dark blue quartz veining along heavily oxidized fault structures in altered porphyry and sediments. This mineralization is characteristic of that mined at the Bidgood Mine, while numerous fault splays provide conduits for yet broader mineralization.
Since the start of Phase I drilling in early December 2009, a total of 47 drill holes representing 3,705 m have been cored in the Boundary, Blue Vein, Contact and Bidgood Break West areas. Assays are pending for the remaining Blue Vein holes and as well for Contact and Bidgood Break West drill holes.
The Phase I drill program has been expanded to accommodate outboard drilling, proximal extensions (all directions) and in-fill drilling of the Boundary zone. Drilling will particularly concentrate in the vicinity of recent intercepts, as reported on January 5 and January 20, 2010, that returned 5.3 gAu/t over 5.75 m (or 3.4 gAu/t over 11.35m) and 15.9 gAu/t over 1.0 m (or 5.5 gAu/t over 3.5m or 1.7 gAu/t over 14.5 m). Following the completion of Phase I drilling, Phase II will commence in the immediate vicinity of the Bidgood mine.
Deep Geophysical Surveys on Gauthier and Lebel Properties
Concurrent with Phase I drilling, two separate deep-penetrating Induced Polarization/Resistivity (IP) geophysical surveys have been undertaken this winter on the Gauthier and Lebel properties. Field components are now complete and independent, interpretation reports are pending for both surveys. The surveys were conducted on the following exploration targets.
Gauthier: A 2.0-km, single-line deep IP survey, covering the eastern limit of the Gauthier property, was designed to identify the western strike extension of the North Basalt Zones, located at Queenston Mining's Upper Beaver property. The survey was also designed to transect historical ground geophysical anomalies that are analogous (including orientation) to those signatures associated with mineralized structures and a central syenite porphyry intrusive at the neighbouring Upper Beaver deposit.
Lebel (KQS Zone): A multi-line deep IP survey over the KQS zone has also been completed. The KQS zone, discovered in 2008 beneath Mud Lake, is a wide copper-gold anomalous zone west of the Bidgood Mine. A distinct 1.6 km-long mineralized corridor hosted within a large feldspar-porphyry stock contains a large quartz-stockwork zone that averages 114 m in core intercepts. Within this broader zone, a strong siliceous core with greater than 80% quartz averages 0.46 gAu/t and 0.10% copper over an average core length of 17 m. The recent survey was designed to outline mineralized targets along this corridor and at depth for future drill testing.
PDAC Investors Exchange
Vault invites interested parties to visit their exhibitor's booth (#2217) at the PDAC Investors Exchange on March 7 and 8, 2010 where a selection of core samples, maps and sections will be on display.
Qualified Person and QA/QC Program
Mr. Michael Sutton, P.Geo, Vault's Vice-President of Exploration is the designated Qualified Person pursuant to National Instrument 43-101 (Standards of Disclosure for Mineral Projects) of the Canadian Securities Administrators and is responsible for the verification and quality assurance of the technical content of this news release.
The Company has instituted a quality assurance & quality control (QA/QC) program to ensure sampling and analysis of all exploration work is conducted using industry best practices, including assay control samples. True widths for holes BV10-04 and BV10-07 reported herein are interpreted to be 90% of drill intersection widths. True widths for other holes referenced are interpreted to range from between 65% and 90% of drill intersection widths. Tabulated results will be posted on Vault's website following receipt of assays for each entire hole and quarter core results.
About Vault
Vault Minerals Inc. is a well-financed junior gold exploration company focused on its large property portfolio in the prolific Kirkland Lake gold camp of northern Ontario, where in excess of 24 million ounces of gold have been produced at a recovered grade of 16.1 gAu/t (0.47 oz/ton). The Company's capital consists of 40,204,543 issued and outstanding common shares which are listed for trading on the TSX Venture Exchange under the symbol 'VMI'. For further information, please contact Joe Horne, President at 902 402 8266 or visit Vault's website at www.vaultminerals.com.
On behalf of the Board of
VAULT MINERALS INC.
signed "Joseph D. Horne"
Joseph D. Horne, President & CEO
This Press Release may contain forward-looking statements that involve inherent risks and uncertainties. Actual events or results could differ materially from the Company's forward-looking statements and expectations, and the Company disclaims any obligation to update these forward-looking statements.
"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."
Vault Intersects 5.3 gAu/t over 5.8 m and 25.2 gAu/t over 0.8 m at Boundary Zone
The Boundary zone consists of sub-parallel mineralized structures located 1,000 m east of the past-producing Bidgood Mine that historically produced 165,000 ounces of gold at a recovered grade of 9.2 gAu/t (0.27 oz/t). These structures extend at least 200 m on surface along strike with minimal trenching or drilling historically having been carried out.
As previously reported (January 5, 2010), the first drill hole on the Boundary zone intersected 15.9 gAu/t over 1.0 m (within 5.5 gAu/t over 3.5m; within 1.7 gAu/t over 14.5 m) on the Perreault vein, approximately 48 m below surface.
The Company now announces assay results of four additional drill holes from this area. Follow-up drill hole DDH BZ09-04, located 40 m southwest of the initial intercept, intersected 5.3 gAu/t over 5.75 m (within 3.4 gAu/t over 11.35 m) approximately 14 m below surface.
Three other closely-centred holes drilled on this zone returned 1.09 gAu/t over 23.65 m (DDH BZ09-3); 1.01 gAu/t over 17.15 m (DDH BZ09-2); and 1.0 gAu/t over 16.0 m (DDH BZ09-1). An historic drill hole from this area returned 1.4 gAu/t over 21.3 m and a hole drilled in 2008 returned 2.0 gAu/t over 13.7m (within 1.6 gAu/t over 26.5 m). The latter intersection was originally interpreted to be a separate zone, but the Perreault vein now appears to dip 72 degrees northwest. This dip and the trend of the zone (065 azimuth) are consistent with that of the ore zones mined at the Bidgood mine. The Perreault vein, tested by this first phase of drilling for only 80 m along strike, is located at contacts between porphyries and sheared argillite and remains open in all directions.
The Robert zone, a sub-parallel area located 35-50 m to the southeast of the Perreault, has recently returned assays of 25.23 gAu/t over 0.75 m (DDH BZ09-3) and 3.35 gAu/t over 3.66 m (DDH BZ09-1). This zone appears spatially related to a porphyry-syenite contact, and is also open in all directions.
The anomalous gold zones are readily identified with up to 20% pyrite mineralization in penetrative fractures, 15 to 60% quartz-ankerite veining, and strong pervasive silica-chlorite-sericite alteration within various strongly-sheared host rocks.
Deep Geophysical Survey on King Quartz Stockwork (KQS) Zone
Concurrent with the above Phase I drill program, a deep-penetrating geophysical survey is being undertaken this winter across a wide copper-gold zone that was discovered in 2008 under Mud Lake, west of the Bidgood Mine. A distinct 1.6 km-long mineralized corridor, hosted within a large feldspar-porphyry stock, contains a large quartz-stockwork zone that averages 114 m in core intercepts. Within this broader zone, a strong siliceous core with greater than 80% quartz averages 0.46 gAu/t and 0.10% copper over an average core length of 17 m.
Qualified Person and QA/QC Program
Mr. Michael Sutton, P.Geo, Vault's Vice-President of Exploration is the designated Qualified Person pursuant to National Instrument 43-101 (Standards of Disclosure for Mineral Projects) of the Canadian Securities Administrators and is responsible for the verification and quality assurance of the technical content of this news release.
The Company has instituted a quality assurance & quality control (QA/QC) program to ensure sampling and analysis of all exploration work is conducted using industry best practices, including assay control samples. Historical assay values have not been verified; however most have been generated subsequent to 1980 by companies believed to be reputable and Vault considers these results representative. True widths are interpreted to be 70 to 90 percent of drill intersection widths.
About Vault
Vault Minerals Inc. is a well-financed junior gold exploration company focused on its large property portfolio in the prolific Kirkland Lake gold camp of northern Ontario, where in excess of 24 million ounces of gold have been produced at a recovered grade of 16.1 gAu/t (0.47 oz/ton). The Company's capital consists of 40,204,543 issued and outstanding common shares which are listed for trading on the TSX Venture Exchange under the symbol 'VMI'. For further information, please contact Joe Horne, President at 902 402 8266 or visit Vault's website at www.vaultminerals.com.
On behalf of the Board of
VAULT MINERALS INC.
signed "Joseph D. Horne"
Joseph D. Horne, President & CEO
This Press Release may contain forward-looking statements that involve inherent risks and uncertainties. Actual events or results could differ materially from the Company's forward-looking statements and expectations, and the Company disclaims any obligation to update these forward-looking statements.
"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."
Vault Intersects 15.9 GAu/t Over 1.0 M in First Drill Hole of Program at Boundary Zone
"It is gratifying to see immediate progress in Vault's renewed effort to develop near-term gold resources since regaining control and direction of the property." noted Joe Horne, Vault's President. "By pursuing numerous high-grade and open-pit targets that have been generated by limited previous drilling, the potential of the property may be significantly and quickly enhanced".
The Boundary Zone is hosted on one of nine major mineralized structures identified on Vault's 3,100-acre Lebel property situated in the prolific Kirkland Lake gold camp, where in excess of 24 million ounces of gold have been produced at a recovered grade of 16.1 gAu/t (0.47 oz/ton). The Boundary Zone consists of three, sub-parallel mineralized structures located 1,000 m east of the past-producing Bidgood Mine that historically produced 165,000 oz gold at a recovered grade of 9.2 gAu/t (0.27 oz/ton). These structures extend at least 200 m on surface along strike with minimal trenching or drilling having been carried out.
The intersection of 15.9 gAu/t over 1.0 m lies within a broader, lower grade mineralized zone that averages 2.4 gAu/t over 9.0 m or 1.7 gAu/t over 14.5 m. This first drill hole is a 30 m 'step-out' northeast of a recent trench on the Perreault Zone where chip sampling returned an average of 5.1 gAu/t across 3.0 m along an 18 m strike length, including one chipped line of 8.9 gAu/t over 3.2 m. As previously reported, individual higher grade assays within the trench include 42.5 gAu/t over 0.4 m, 41.2 gAu/t over 0.5 m and 16.9 gAu/t over 0.6 m. Strong mineralization was observed in the trench up to where it became covered by swamp.
The drill hole is the first of several proposed holes intended to define a higher grade, near-surface zone, as observed by surface trenching, and that may be included in a broad, lower grade open-pit scenario. The three zones are hosted within a porphyry unit with minor mudstone and wacke sequences. The anomalous gold zones are easily identified with up to 20% pyrite mineralization in penetrative fractures, 15 to 60% quartz-ankerite veining, and strong pervasive silica-chlorite-sericite alteration; all of which are strongly sheared.
Qualified Person and QA/QC Program
The technical content of this press release has been reviewed and approved for disclosure by Michael Sutton, P.Geo, Vault's Vice-President, Exploration, who serves as a Qualified Person for the purposes of National Instrument 43-101 (Standards of Disclosure for Mineral Projects). The Company has instituted a quality assurance and quality control (QA/QC) program to ensure sampling and analysis of all exploration work is conducted using industry best practices, including assay control samples. True widths are estimated to be approximately 70% of core length.
About Vault
Vault Minerals Inc. is a Canadian junior gold exploration company active in the world-renowned Kirkland Lake gold camp of northern Ontario. The Company's capital consists of 40,104,543 issued and outstanding common shares which are listed for trading on the TSX Venture Exchange under the symbol 'VMI'. For further information, please contact Joe Horne, President at 902 402 8266 or visit www.vaultminerals.com.
On behalf of the Board of
VAULT MINERALS INC.
signed "Joseph D. Horne"
Joseph D. Horne, President & CEO
This Press Release may contain forward-looking statements that involve inherent risks and uncertainties. Actual events or results could differ materially from the Company's forward-looking statements and expectations, and the Company disclaims any obligation to update these forward-looking statements.
"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."
Vault Sampling Returns 8.9gAu/t Over 3.2m at Boundary Zone
The Boundary zone is hosted on one of nine major mineralized structures identified on Vault's 3,100-acre Lebel property (74 claims) situated in the prolific Kirkland Lake gold camp, where in excess of 24 million ounces of gold have been produced at a recovered grade of 16.1 gAu/t (0.47 oz/ton). This 150 m wide zone comprises three sub-parallel mineralized gold structures located 1,000 m east of the past-producing Bidgood mine that historically produced 165,000 ounces gold at a recovered grade of 9.2 gAu/t (0.27 oz/t). The Boundary zone, which is now exposed on surface, hosts potential for open-pit mining.
Excavator trenching has uncovered the central Perreault zone, a strong structure with blue-grey quartz veining carrying a high content of pyrite that previously returned a chip sample of 27.9 gAu/t over 0.3m from an old pit. On each side of this zone are wider, lower-grade zones. The Martin zone, situated 20 m northwest, returned 2.03 gAu/t over 13.7 m within a wider zone of 1.60 gAu/t over 26.5 m, and including higher grade assays such as 10.2 gAu/t over 1.1 m from previous drilling in 2008. The Robert zone, situated 50 m southeast of the Perreault zone, returned 1.4 gAu/t over 21.3 m from historical drilling. A 2008 drill hole located 145 m northeast returned 7.3 gAu/t over 2.1m (including 18.5 gAu/t over 0.6m) from the interpreted extension of the Robert zone.
A total of 52 chip samples were taken from the Perreault zone along 10 sample lines that were spaced, on average, at 4 m intervals and representing 41 m of strike extent. Mineralization generally consists of 3-20% coarse disseminated pyrite hosted within 0.2 to 0.6 m dark blue quartz veining along heavily oxidized fault structures in altered porphyry. The fault splits into several splays that provide conduits for wider mineralization. This mineralization is characteristic of that mined at the Bidgood mine.
The sampling returned an average of 5.1 gAu/t across 3.0 m along an 18 m strike length. Individual higher grade assays include 42.5 gAu/t over 0.4 m, 41.2 gAu/t over 0.5 m and 16.9 gAu/t over 0.6 m. The zones are related to a porphyry rock unit, cover a minimum strike of 200 m, and are open in all directions.
Vault feels that gold resources can be quickly delineated on various zones on the property, by pursuing high-grade targets that have been generated by previous drilling. Vault intends to resume the surface stripping and sampling program in the spring of 2010, to extend the structure along strike and to uncover the additional parallel mineralization.
Diamond Drill Program
As previously disclosed, the Company has recently commenced a 3,100 m Phase I drill program to test a select portion of identified targets on the Lebel property that include both narrow, high-grade zones, and broader, near-surface showings that host potential for open-pit mining. Upon completion of the current drilling on the Boundary zone, the drill will commence testing the Blue Vein zone located 700 m south of the Bidgood Mine. The Blue Vein zone also returned numerous high-grade gold values from recent trenching, including 73.0 gAu/t over 1.0 m (see Vault's December 18, 2009 press release).
The Kirkland Lake gold camp continues to attract considerable attention with recent drill successes by Kirkland Lake Gold Inc. and Queenston Mining Inc. to the west and east of the Lebel gold property.
Qualified Person and QA/QC
The technical content of this press release has been reviewed and approved for disclosure by Michael Sutton, P.Geo, Vault's Vice-President, Exploration, who serves as a Qualified Person for the purposes of National Instrument 43-101 (Standards of Disclosure for Mineral Projects).
The Company has instituted a quality assurance and quality control (QA/QC) program to ensure sampling and analysis of all exploration work is conducted using industry best practices, including assay control samples. Historical assay values have not been verified; however most have been generated subsequent to 1980 by companies believed to be reputable and Vault considers these results to be representative. True widths of the above drill intersections are unknown at the present time, but are generally estimated to be approximately 60-70% of core length.
About Vault
Vault Minerals Inc. is a Canadian junior gold exploration company active in the world-renowned Kirkland Lake gold camp of northern Ontario. The Company's capital consists of 40,104,543 issued and outstanding common shares which are listed for trading on the TSX Venture Exchange under the symbol 'VMI'. For further information, please contact Joe Horne, President at 902 402 8266 or visit www.vaultminerals.com.
On behalf of the Board of
VAULT MINERALS INC.
signed "Joseph D. Horne"
Joseph D. Horne, President & CEO
This Press Release may contain forward-looking statements that involve inherent risks and uncertainties. Actual events or results could differ materially from the Company's forward-looking statements and expectations, and the Company disclaims any obligation to update these forward-looking statements.
"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."