Acquisition(s)

Medoro Resources Renegotiates Venezuelan Acquisition

 

    TORONTO, June 12 /CNW/ - Medoro Resources Ltd. (TSX-V: MRS, AIM: MRL)

announced today that it has renegotiated its proposed acquisition of Panwest

Seas Corporation Ltd., which holds the rights to the Lo Increible 4A & 4B

exploration properties located in the El Callao area of the State of Bolivar,

Venezuela.

    Under the renegotiated terms, Medoro will issue 15,140,000 common shares

to the shareholders of Panwest in consideration of the acquisition of Panwest,

a reduction of 2,000,000 shares. As previously agreed, the company will also

pay US$1,000,000 in cash at closing and a royalty of US$15 per ounce of gold

on all production from the Lo Increible 4A & 4B mining properties. The shares

to be issued will represent approximately 30.1% of the issued shares of the

company and will be allocated between two arms-length vendors. The acquisition

of Panwest remains subject to regulatory approval and definitive

documentation.

    Prior to the renegotiation, the acquisition was considered a "related

party transaction" under Ontario Securities Commission Rule 61-501 due to

certain insiders of Medoro being shareholders of Panwest. Under the

renegotiated terms, these insiders will not be shareholders of Panwest nor

will they be entitled to any consideration under the proposed acquisition. As

a result, Panwest and its shareholders are entirely at arm's length to the

company and the acquisition is no longer a related party transaction;

therefore, the company advises that the valuation and fairness opinion dated

April 27, 2006 prepared by Haywood Securities Inc. in respect of the previous

transaction and all references to such valuation in the company's Management

Information Circular (the "Circular") dated April 27, 2006 are withdrawn.

    The Circular also included a summary of certain information, including

resource and mineable reserve estimates, that was taken from the Technical

Report (the "Original Report") entitled "Lo Increible 4A and 4B Mining

Properties El Callao Mining District, Bolivar State, Venezuela" prepared by

David Mayes Consulting Ltd. dated April 24, 2006. The Original Technical

Report was subsequently amended and re-dated as of May 15, 2006 (the "Amended

Report") and filed on SEDAR on May 16, 2006, after the date of the Circular.

The Amended Report clarified that the resource estimates were prepared prior

to National Instrument 43-101 and were therefore historical estimates, and

also deleted the references to mineable reserves, as no current economic

analysis has been completed. Accordingly, readers of the Circular are

cautioned to rely upon the Amended Report and not the summary of the Original

Report found in the Circular. The full Amended Report can be viewed on SEDAR

at www.sedar.com.

 

    Medoro Resources is a gold exploration and development company focused on

acquiring properties of merit for potential joint ventures with senior

producers.

 

    THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT

    RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE

   

  For further information: Peter Volk, General Counsel and Secretary, 

[phone], pvolk(at)medororesources.com

    (MRS. MRL)