Aura Gold Inc. is pleased to announce that it has renegotiated the agreement with Yamana Gold Inc. (“Yamana”) concerning the Cumaru property in Para State, north-central Brazil. Aura Gold will now acquire 100% of the property and will fund an underlying work commitment of US$1 million over a three-year period to July 2008.
As consideration for this purchase, Aura Gold will issue 6.0 million common shares to Yamana which will hold a total of 7.0 million shares representing approximately an 11.9% interest in Aura Gold. The renegotiated agreement is subject to definitive documentation and regulatory approval.
The previous option agreement allowed Aura Gold to earn a 70% interest in the Cumaru property by spending US$3 million by January 2009. The property is subject to a 1.5% net smelter royalty held by a previous landowner, which may be purchased any time for US$1.25 million.
With this renegotiated agreement, Aura Gold achieves an important corporate objective of obtaining a 100% interest in all of its active exploration projects. In addition to the Cumaru property, the Cumaru Gold Project includes the adjacent Gradaus mining license and two associated exploration claims. Aura Gold can earn a 100% interest in the license and claims by making cash payments totaling US$510,000 and issuing 400,000 Aura Gold common shares by January 2009, of which US$25,000 has been paid and 200,000 shares issued. The Gradaus mining license includes the former Gradaus mine, an open-pit operation that was active in the early 1990′s. There are numerous other widespread artisanal operations and significant quantities of alluvial gold were produced from the Cumaru Gold Project between 1980 and 2000.
Aura Gold is completing detailed mapping and sampling on the Cumaru Gold Project to define targets for a minimum 3000 metre drill program to begin during the fourth quarter. Efforts have been focused on the Cumaru granodiorite stock and its hydrothermally altered contact zone that extends outwards into the surrounding metamorphosed volcanic and sedimentary rocks. The stock and surrounding rocks are part of the Gradaus Archean Greenstone Belt, which extends along the 30 kilometre length of Aura Gold’s Cumaru Gold Project.
Aura Gold has collected more than 700 auger samples from shallow drill holes averaging about 7 metres in depth and has mapped and sampled dozens of outcrops, mainly found in the many widely scattered and extensive artisanal workings. Assays from this sampling are expected shortly. Additionally, unsplit and unassayed core from 13 of the 20 drill holes used to define an historic resource, which was partly exploited in the Gradaus mine, are being re-logged and sampled. Aura Gold has defined at least six possible drill targets, some of which are gold zones intersected in the historic drilling beneath the shallow Gradaus open-pit mine. Other newly discovered targets are peripheral to the intrusive stock in the adjacent greenstone sequence. These include a promising stockwork vein system southwest of the Gradaus mine and a large high-grade vein system north of the mine in the greenstone sequence.
The qualified person under National Instrument 43-101 responsible for all technical data reported in this news release is Mr. Mel Klohn, L.P. Geo., Vice President, Exploration for Aura Gold Inc.
The independent board of directors of Aura Gold has approved the amendment to the Cumaru property agreement. For the purposes of National Instrument 62-103 early warning reporting, the address of Yamana is Suite 1102, 150 York Street, Toronto, Ontario, M5H 3S5. Prior to the amendment to the Cumaru property agreement, Yamana exercised control and direction over 1.0 million shares of Aura Gold which were issued in consideration for entering into the original agreement. Upon completion of the amended agreement and as a result of the issuance of 6.0 million Aura Gold shares to Yamana, Aura Gold will have 58,630,718 common shares issued and outstanding on a non-diluted basis, and 81,080,718 shares on a fully diluted basis. At that time Yamana will own 7.0 million shares representing approximately 11.9% of the 58,630,718 issued and outstanding common shares on a non-diluted basis. Yamana has been issued the Aura Gold shares for investment purposes, and has no current intention to increase the beneficial ownership, control or direction of Aura Gold.
About Aura Gold Inc.
Aura Gold Inc. (TSX:ORA.TO – News) is a Canadian exploration company focused on the discovery of gold deposits in Brazil. Aura Gold’s projects are the Cumaru, the Inaja Greenstone Belt and the North Carajas Claims, which total approximately 600,000 hectares in the Carajas Metallogenic Province of north-central Brazil. The Carajas region is host to a significant number of world-class deposits of iron ore, gold, copper, nickel, manganese and bauxite. Aura Gold intends to become Brazil’s pre-eminent mineral explorer and the partner of choice for international mining companies seeking opportunities in Brazil.
This news release includes certain “forward-looking statements”. All statements other than statements of historical fact, included in this release, including without limitation, statements regarding potential mineralization and reserves, exploration results, future plans and objectives of Aura Gold, 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 Aura Gold’s expectations are the risks detailed herein and from time to time in the filings made by Aura Gold with securities regulators.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
Aura Gold Inc.
President & CEO
Aura Gold Inc.
Vice President, Corporate Development
Source: Aura Gold Inc.