Laramide Resources Ltd. announces that it intends to exercise the equity option provision of its agreement with Minera Secotec SA de CV (“Secotec”), the operator of the producing Cerro Colorado heap leach gold mine in Sonora, Mexico. This option was part of the transaction with Secotec originally announced on December 16, 2002 and allowed Laramide to purchase 10% of Secotec’s shares for US $500,000 for a period of two years. This option came from Secotec’s principal shareholder, Mexico Mining Investments Ltd, and was exerciseable in the event of a sale of Secotec or an IPO, reverse takeover or other “going public” transaction that created a liquidity event. On December 9, 2004 Secotec announced a transaction whereby it would become public via an RTO of Sierra Minerals Inc, a TSX-V listed junior explorer with other Mexican property interests. This transaction, once completed, will result in Secotec owning approximately 60% of Sierra.
As a result of the RTO structure and the time delays encountered in completing the going public transaction, Laramide and Secotec agreed to a restructuring of the option and will now receive 12.5% of Secotec’s interest in Sierra upon closing of the RTO. In return, Laramide has agreed to advance funds to Secotoec by way of a secured loan agreement that bears interest at prime plus 2.5%. Laramide’s NSR royalty interest on the mine will be unaffected by this transaction.
In addition, Allan Ibbitson has been appointed Chief Financial Officer of Laramide. In connection with the appointment Laramide has granted Mr. Ibbitson 200,000 stock options to purchase common shares of Laramide at a price of $1.36 per share for a period of 2 years from the date of grant.
For further information contact:
Marc C. Henderson, President
Tel: (416) 599-7363
Or visit our web site at www.Laramide.com