VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - July 11, 2006) - Kaminak Gold Corporation (TSX VENTURE:KAM) has entered into an agreement with BCGold Corp. (TSX VENTURE:BGX.P) whereby, subject to regulatory approval, BCGold can earn an interest in Kaminak's 100% owned Voigtberg Property.
Kaminak has granted BCGold the option to acquire up to a 60% interest in the Voigtberg Property ("Property" or "Voigtberg") by making $2,000,000 in exploration expenditures over four years and by issuing 400,000 units of BCGold to Kaminak. BCGold can earn an additional 10% interest in the Property by completing a bankable feasibility study, for a total earn-in of 70%.
The 2900 hectare Voigtberg Property is located 130 kilometers northwest of the town of Stewart, British Columbia and 70 km from the prolific Galore Creek copper-gold-silver project. Voigtberg is a gold porphyry target subject to a 2% net smelter returns royalty interest held by third parties.
"This agreement demonstrates that our joint-venture philosophy is sound and our business model to achieve long-term growth is working," stated Rob Carpenter, President and CEO of Kaminak. "We are exposing the Kaminak shareholder to a tremendous opportunity for a discovery by bringing the added technical expertise and funds from BCGold to advance the Voigtberg Property."
Details of the agreement are as follows:
1.) Subject to the approval of the TSX Venture Exchange, BCGold will issue:
a. 100,000 units (the "Initial Units"(i)) to Kaminak on the closing date of BCGold's Qualifying Transaction ("closing date"); and
b. 100,000 units (the "Additional Units"(ii)) to Kaminak on each of the first, second and third anniversaries of the closing date for an aggregate of 300,000 Additional Units.
(i) Each Initial Unit will consist of one common share of BCGold and one-half of one common share purchase warrant, each whole warrant being exercisable to purchase one common share at $0.40 per share for one year following the Closing Date.
(ii) Each Additional Unit will consist of one common share of BCGold and one-half of one common share purchase warrant, each whole warrant being exercisable for one year following the date of issuance to purchase one common share at an exercise price to be determined by taking the weighted average closing price of the common shares of BCGold for the twenty consecutive trading days immediately prior to the date of issuance plus 25%.
2.) BCGold will make staged exploration expenditures on the property totaling $2,000,000 within four years of the closing date. Year 1 expenditures will be a minimum of $350,000. Year 2 expenditures will be a minimum of $350,000. Year 3 expenditures will be a minimum of $650,000 and Year 4 expenditures will be a minimum of $650,000. BCGold will be project operator in Years 2 through 4.
Upon spending a minimum of $1,000,000 in exploration expenditures, BCGold will be vested with a total of a 50% interest in the Voigtberg Property and a joint venture will be formed, with BCGold being the operator of the Property. The Joint Venture Agreement will state that the operator of the joint venture shall recommend an annual exploration program of at least $500,000.
Upon completion of the required exploration expenditures and issuance of the Additional Units, BCGold will be vested with an additional 10% interest for a total property interest of 60%.
3.) BCGold can earn an additional 10% interest in the Property by completing a bankable feasibility study, for a total earn-in of 70%.
An independent NI 43-101 compliant technical report on the Voigtberg Property has been commissioned by Kaminak Gold Corp. and will be completed as part of this agreement. BCGold will pay Kaminak $11,186.68 within 15 days for the reimbursement of the cost incurred by Kaminak for preparation of this document.
Proposed First Year Work Program
A proposed $350,000 exploration program is recommended for Year 1, consisting of initial mapping and prospecting, to be followed by at least 600 metres of core drilling in 3 to 6 holes. This drilling would be directed at determining the extent and grade of mineralization in the "Gold Zone" and the cause of a chargeability anomaly under fresh limestone in the "West Zone".
Kaminak Gold Corporation holds one of the largest land positions, covering several million acres, in Canada devoted to metallic mineral exploration. Kaminak's projects offer world-class exploration potential and present exposure to strategic commodities including, gold, uranium and nickel.
On behalf of the Board of Directors
Rob Carpenter, Ph. D., P. Geo., President and CEO
Kaminak Gold Corporation
Certain disclosures in this release, including management's assessment of Kaminak's plans and projects, constitute forward-looking statements that are subject to numerous risks, uncertainties and other factors relating to Kaminak's operation as a mineral exploration company that may cause future results to differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements. Kaminak expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.
FOR FURTHER INFORMATION PLEASE CONTACT:
Kaminak Gold Corporation
Rob Carpenter, Ph. D., P. Geo.
President and CEO