Acquisition(s)

Medoro Announces Acquisition of Andina Minerals Inc. and

    Saleof Furtei Operation to Sargold Resource Corporation

 

    TORONTO, June 7 /CNW/ - Medoro Resources Ltd. (TSX-V/AIM: MRL) ('Medoro')

is pleased to announce it has agreed to acquire all of the shares of Andina

Minerals Inc. ('Andina') by issuing 25 million common shares of Medoro to

Andina's shareholders. Separately, Medoro has reached an agreement to sell its

interest in the Furtei operation to Sargold Resource Corporation ('Sargold').

The Furtei sale price includes a series of cash payments over thirty months

amounting to (euro) 6 million, the assumption by Sargold of a maximum of

(euro) 2 million in liabilities and Cdn $1 million in Sargold common shares to

be priced and issued thirty months after closing.

    Andina is a privately-held exploration company, managed by former senior

Toronto management and senior Chilean exploration staff of TVX Gold Inc.,

which has a portfolio of seven gold, silver and copper properties in Chile.

The projects include the Encrucijada epithermal gold-silver project under

option from Minera Newmont (Chile) Limitada; the Volcan gold project, located

20 kilometers north of the Refugio mine, where previous drilling has

intersected a significant zone of gold mineralization; and, the Gitana copper

project which has been the focus of small-scale surface and underground mining

for the past 30 years but which has never undergone a systematic exploration

program.

    The Andina transaction is expected to close by June 30, 2004 but may be

extended by mutual agreement. The acquisition is subject to acceptance by

Andina's shareholders. Other joint conditions precedent to closing the

transaction include: a) completion of satisfactory legal due diligence,

b) execution of definitive agreements, and c) receipt of all required

regulatory approvals.

    Medoro has entered into an agreement whereby Sargold can acquire Medoro's

90% interest in the Furtei operation in Sardegna, Italy including the

processing plant, all mining equipment, and all exploration and mine data. In

addition to Furtei, the Scanu di Montefero gold exploration property is

included in this transaction. Medoro will retain a sliding scale net smelter

return royalty interest in any gold production from the properties varying

from 1% when the price of gold is less than US$350 per ounce to 3% if gold is

greater than $450 per ounce. This agreement is subject to regulatory approval

and completion of final due diligence by Sargold. The Sargold transaction is

expected to close within 90 days.

    Upon completion of the Andina acquisition, Mr. T. Sean Harvey, Chairman

of Andina, will become Chairman, President and CEO of Medoro. Giuseppe Pozzo,

currently President of Medoro commenting on the transactions stated, 'The

combination of Andina's portfolio of exploration projects in Chile and

Medoro's projects in partnership with a subsidiary of Gold Fields Ltd. in

Sardegna is tremendously exciting. The time was right to bring in a new team

and create the critical mass necessary to, not only bring our current projects

to fruition, but also to allow us to take advantage of new opportunities.

    We are very pleased that Sean Harvey has accepted the task of guiding

Medoro on a go-forward basis and know he will work exceptionally hard to

create shareholder value.'

 

    Following completion of these transactions, Medoro will have:

 

    -  An agreement with Gold Fields to sole-fund exploration of Monte

       Ollasteddu and all other properties in Sardegna through bankable

       feasibility study

    -  A portfolio of seven exciting gold, silver and copper exploration

       properties and an experienced and established exploration team in

       Chile

    -  An experienced, entrepreneurial management team led by Sean Harvey

 

    At Monte Ollasteddu, Gold Fields has commenced fieldwork and expects to

begin drilling by the end of the month.

    Mr. Harvey, currently Chairman of Andina, was President and CEO of

TVX Gold Inc. at the time of its sale to Kinross Gold Inc. in 2003.

Subsequently, Mr. Harvey was President and CEO of Atlantico Gold, a private

Brazilian mining company involved in the development of the Amapari Project

that was sold to Wheaton River Minerals Inc. in early 2004. Joining Mr. Harvey

will be Mike Hodgson, Vice President and COO and Carl Hansen as Vice President

Exploration. Both of these individuals have strong technical backgrounds and

over 20 years of international mining experience. Michael Davies will continue

in his capacity as Chief Financial Officer.

    'These transactions, combined with the new management team, will lay the

foundation for a new and exciting mining company,' said Mr. Harvey, 'that will

seek to maximize shareholder value through aggressive value added growth.'

    Concurrent with the acquisition, Medoro will use its best efforts to

raise approximately Cdn $15 million in new equity. GMP Securities Inc. will

act as lead broker for this placement. The financing is expected to close

prior to, or concurrently with, the closing of the Andina acquisition;

however, the financing is not a condition of the acquisition.

    Medoro also announces that, effective immediately, Canaccord Capital

(Europe) Limited has been appointed its Nominated Adviser and Stockbroker.

     

    For further information: Medoro Resources Ltd., Peter Volk, Assistant

Secretary, [phone], info(at)medororesources.com; Andina Minerals Inc.,

T. Sean Harvey, Chairman, [phone]

    (MRL.)