Corporate Restructuring

Medoro Resources Announces Corporate Restructuring

 

    TORONTO, Sept. 8 /CNW/ - Medoro Resources Ltd. (TSX-V/AIM: MRL) announced

today the sale of all of its Italian assets, excluding Monte Ollasteddu and

Pestarena, to Sargold Resource Corporation (TSX-V: SRG).

    The company announced on June 7, 2004 a proposed restructuring of its

Joint Venture whereby Sargold would acquire Medoro's entire interest in the

Furtei operations in exchange for (euro) 6 million in cash, the assumption of

(euro) 2 million in liabilities and C$1 million in common shares of Sargold,

with closing expected on or before August 31. The companies have agreed to a

further restructuring of this transaction whereby Sargold will now acquire all

of the outstanding shares of Medoro's Australian subsidiary, Gold Mines of

Sardinia Pty. Ltd., resulting in Sargold acquiring Medoro's 90% interest in

all Sardinian assets, with the exception of the Monte Ollasteddu concessions

and Miniere di Pestarena s.r.l. The cash and share consideration remains

unchanged, in total, although the cash consideration will now be payable over

a period of 60 months. By acquiring the shares of Gold Mines of              

Sardinia Pty. Ltd., Sargold will be responsible for all existing and future

liabilities of Sardinia Gold Mining S.p.A., Medoro's Italian operating

company. Medoro will also retain a 2% net smelter return royalty interest,

with Sargold having the right of buy back for US$1 million per percent.

    Upon completion of this transaction, Medoro Resources will have

approximately C$4.0 million in cash, (euro) 5.5 million in receivables from

Sargold, no debt and interests in Pestarena and Monte Ollasteddu, the latter

subject to an earn-in agreement whereby Bolivar Gold Corp. (TSX: BGC) has

already earned a 15% interest and can earn, in total a 70% interest, with Gold

Fields Limited (NYSE/JSE: GFI) currently funding all work in order to earn a

60% interest in the project. Commenting on the restructuring, Giuseppe Pozzo,

President of Medoro stated 'We are pleased that shareholders are finally in a

position to benefit from the company's exploration potential, now fully funded

by others, and with sufficient resources to identify other opportunities

throughout Europe.'

    The transaction is subject only to regulatory and shareholder approvals

and is expected to be completed within 45 days.

  

 

    For further information: Peter Volk, Assistant Secretary,

[phone], info(at)medororesources.com

    (MRL.)