Tue May 14, 2013 Northern Lion Completes Agreement with Centerra and Provides an Exploration and Corporate Update
Vancouver, British Columbia: Northern Lion Gold Corp. (the "Company") announces that its previously announced (reported April 4, 2013) definitive option agreement (the "Agreement") with Centerra Gold (KB) Inc., a subsidiary of Centerra Gold Inc. ("Centerra") has become fully effective as the conditions precedent to such effectiveness, which included receipt of TSX Venture Exchange approval and confirmation that certain licenses applied by the Company have been granted, have now been satisfied.
Pursuant to the Agreement, Centerra can earn up to a 70% interest in a number of the Company's exploration permits (the "Option Properties") located in the Larnaca and Paphos Districts of the Republic of Cyprus. To earn an initial 51% interest, Centerra must, in addition to the US$100,000 previously paid, make exploration and development expenditures of US$3 million over three years (the "Initial Option Period"), of which US$500,000 is a firm commitment by Centerra that must be incurred on or before the first anniversary of the effective date of the Agreement.
Once a 51% interest is earned by Centerra, either a 51/49 joint venture will be formed (and further funding would be done on a pro rata basis), or Centerra may elect to earn an additional 19% interest to bring its total property interest to 70% by funding an additional US$3 million in exploration and development expenditures within a two year period following its election to increase its interest.
The Company will be the operator during the first year of the Initial Option Period, following which Centerra may elect to assume operatorship.
The Company's 2013 exploration program commenced in April on its permits in the Paphos District of western Cyprus (subject to the Agreement with Centerra), installing grids for a ground geophysical survey that is planned to begin shortly. The surveys will measure Audio Magnetotellurics ("AMT") as a primary method and use Transient Electromagnetics ("TEM") to further test anomalous areas.
The geophysical crew is in place conducting orientation test lines over known massive sulfide mineralization, in order to provide a reference to assist in the interpretation of survey results. The orientation AMT survey successfully identified known mineralization and results from the orientation TEM survey are currently being processed. These test lines are being conducted on grounds not associated with this Agreement.
The first area of the geophysical survey will be in the Paphos District, where a 2011 Versatile Time-Domain Electromagnetic Survey conducted by Geotech Airborne Malta, Ltd. (reported February 7, 2012), discovered a number of geophysical targets in this area. Five of these targets have been selected by Centerra for this follow-up ground survey.
Centerra and the Company have also selected the Pano Lefkara permit for the second phase of the AMT survey. Pano Lefkara was previously drilled by the Company in 2012. Auriferous massive sulfides were encountered in three drill holes and assays of up to 3 metres of 4.98 grams per tonne ("g/t") gold, 29.60 g/t silver, 3.75% copper, and 2.47% zinc were returned (reported July 17, 2012).
The Company's field activities in Cyprus are under the direction of Robert Johnston, P.Geo. (BC), a consultant to the Company and "qualified person", as defined by National Instrument 43-101. Mr. Johnston is responsible for the technical content of this news release.
The Company also announces that the Board of Directors will be asking shareholders for the option to consolidate its common shares. Shareholders permission for this option will be requested at the upcoming annual general and special meeting of shareholders scheduled to be held on June 13, 2013.
Due to current difficult market conditions the Company proposes to have the option available to consolidate its share capital of one (1) new share for up to every ten (10) old shares. If a consolidation takes place, no name change of the Company would occur. The Board of Directors of the Company at any time in its absolute discretion will determine the exact ratio of the consolidation, up to 10 common shares.
As at the date hereof, there are an aggregate 45,847,094 issued and outstanding common shares. Assuming no other change to the issued and outstanding common shares, if approved by the shareholders, and then enacted by the Board of Directors, the maximum share consolidation would result in an aggregate of approximately 4,584,709 common shares issued and outstanding.
A proposed share consolidation is subject to the approval, by resolution, of the shareholders of the Company and to the approval of the TSX Venture Exchange. Full details regarding the possible consolidation will be included in the information circular that can be viewed on SEDAR at www.sedar.com.
Company President and CEO, John Lando, commented: "The Board of Directors has decided to ask shareholders for this approval at the current time in order to give the Company further flexibility over the coming year as it looks for further funding. The Agreement with Centerra will provide some exploration funding, however more funding may be required for corporate overhead and to advance our other projects in the Republic of Cyprus."
About Northern Lion
Northern Lion is committed to building a strong portfolio of projects within mining-friendly and infrastructure-rich areas of Europe. Northern Lion currently has a number of exploration permits in the Republic of Cyprus and is actively pursuing other opportunities within the region.
Centerra is a gold mining company focused on operating, developing, exploring and acquiring gold and gold-copper properties in Asia, the former Soviet Union, Turkey and other emerging markets worldwide. Centerra is a leading North American-based gold producer and is the largest Western-based gold producer in Central Asia. Centerra's shares trade on the Toronto Stock Exchange (TSX) under the symbol CG. The Company is headquartered in Toronto, Ontario, Canada.
NORTHERN LION GOLD CORP.
John Lando, President
For information with respect to Northern Lion or the contents of this news release, please contact John Lando or Ian Mitchell at (604) 669-2701, toll free at 1 800 663 0510, or email to or visit the web site at www.northernliongold.com.
This news release includes "forward-looking information", as such term is defined in applicable securities laws. The forward-looking information includes, without limitation, exploration plans of the Company, including the time thereof, the success of exploration activities and other similar statements concerning anticipated future events, conditions or results that are not historical facts. These statements reflect management's current estimates, beliefs, intentions and expectations; they are not guarantees of future performance. The Company cautions that all forward-looking information is inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond the Company's control. Such factors include, among others, risks and uncertainties relating to exploration and development; risks arising as a result of the Company operating in Cyprus; the ability of the Company to obtain additional financing; including through Centerra funding exploration and development activities pursuant to the Agreement; the Company's limited operating history; the need to comply with environmental and governmental regulations; potential defects in title to the Company's properties; fluctuations in currency exchange rates; fluctuating prices of commodities; operating hazards and risks; competition; and other risks and uncertainties. Accordingly, actual future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. All statements are made as of the date of this news release and, except as required by law, the Company is under no obligation to update or alter any forward-looking information.
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