SYS-CON MEDIA Authors: Xenia von Wedel, Peter Silva, Glenn Rossman, Ava Smith, Elizabeth White

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."

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
Verizon Enterprise Solutions is simplifying the cloud-purchasing experience for its clients, with the launch of Verizon Cloud Marketplace, a key foundational component of the company's robust ecosystem of enterprise-class technologies. The online storefront will initially feature pre-built cloud-based services from AppDynamics, Hitachi Data Systems, Juniper Networks, PfSense and Tervela. Available globally to enterprises using Verizon Cloud, Verizon Cloud Marketplace provides a one-stop shop fo...
Leysin American School is an exclusive, private boarding school located in Leysin, Switzerland. Leysin selected an OpenStack-powered, private cloud as a service to manage multiple applications and provide development environments for students across the institution. Seeking to meet rigid data sovereignty and data integrity requirements while offering flexible, on-demand cloud resources to users, Leysin identified OpenStack as the clear choice to round out the school's cloud strategy. Additional...
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com...
We are all here because we are sold on the transformative promise of The Cloud. But what good is all of this ephemeral, on-demand infrastructure if your usage doesn't actually improve the agility and speed of your business? How must Operations adapt in order to avoid stifling your Cloud initiative? In his session at DevOps Summit, Damon Edwards, co-founder and managing partner of the DTO Solutions, will highlight the successful organizational, process, and tooling patterns of high-performing c...
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from ha...
Software-driven innovation is becoming a primary approach to how businesses create and deliver new value to customers. A survey of 400 business and IT executives by the IBM Institute for Business Value showed businesses that are more effective at software delivery are also more profitable than their peers nearly 70 percent of the time (1). DevOps provides a way for businesses to remain competitive, applying lean and agile principles to software development to speed the delivery of software that ...
Docker offers a new, lightweight approach to application portability. Applications are shipped using a common container format and managed with a high-level API. Their processes run within isolated namespaces that abstract the operating environment independently of the distribution, versions, network setup, and other details of this environment. This "containerization" has often been nicknamed "the new virtualization." But containers are more than lightweight virtual machines. Beyond their small...
The move in recent years to cloud computing services and architectures has added significant pace to the application development and deployment environment. When enterprise IT can spin up large computing instances in just minutes, developers can also design and deploy in small time frames that were unimaginable a few years ago. The consequent move toward lean, agile, and fast development leads to the need for the development and operations sides to work very closely together. Thus, DevOps become...
Cloud Expo 2014 TV commercials will feature @ThingsExpo, which was launched in June, 2014 at New York City's Javits Center as the largest 'Internet of Things' event in the world.

ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ --  IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's

An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and asse...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Ar...
Technology is enabling a new approach to collecting and using data. This approach, commonly referred to as the "Internet of Things" (IoT), enables businesses to use real-time data from all sorts of things including machines, devices and sensors to make better decisions, improve customer service, and lower the risk in the creation of new revenue opportunities. In his General Session at Internet of @ThingsExpo, Dave Wagstaff, Vice President and Chief Architect at BSQUARE Corporation, discuss the ...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, a...
SYS-CON Media announced today that Aruna Ravichandran, VP of Marketing, Application Performance Management and DevOps at CA Technologies, has joined DevOps Journal’s authors. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. DevOps Journal brings valuable information to DevOps professionals who are transforming the way enterprise IT is done. Aruna's inaugural article "Four Essential Cultural Hacks for DevOps Newbies" discusses how to demonstrate the...