Marlowe Regulatory News (MRL)

11 Jul 2006 07:00

Medoro Resources Closes Acquisition of Venezuelan Gold Properties TORONTO, July 10 /CNW/ - Medoro Resources Ltd. (TSX-V: MRS/AIM:MRL)announced today that it has completed the acquisition of all of the shares ofPanwest Seas Corporation Ltd., which holds the rights to the Lo Increible 4A &4B gold exploration properties located in the El Callao area of the State ofBolivar, Venezuela. As previously announced, in consideration for the acquisition of Panwest,Medoro issued 15,140,000 common shares to the shareholders of Panwest, paidUS$1,000,000 in cash and also agreed to pay to the sellers a royalty of US$15per ounce of gold on all production from the Lo Increible 4A & 4B miningproperties. Medoro has also assumed all of Panwest's current liabilities andthe expenses of the acquisition of the purchased shares and the closing of thetransactions, totaling less than US$200,000. The company is planning to commence a 15,000 metre diamond drillingprogram at the La Cruz, La Sofia and El Tapon prospects by the end of July,2006. Risk Factors: The company's exploration and development activities primarily occur inVenezuela and, as such, the company may be affected by political or economicinstability in Venezuela. The risks include, but are not limited to, civilunrest, terrorism, military repression, extreme fluctuations in currencyexchange rates and high rates of inflation. The security situation inVenezuela over the past few years has been highly volatile due to politicalconflict between the Venezuelan government and opposition groups. In 2004, anational referendum ratified the mandate of the President of Venezuela andlater that year, elections of governors and mayors throughout the countryresulted in the ruling group of parties controlling most of such offices.These events have resulted in greater political stability, which is expectedto last for some time. Also, oil revenues have remained high, which hasallowed the government to increase public spending. Violent crime is prevalentthroughout the country. Kidnapping, smuggling and drug trafficking occurfrequently in remote areas, including Bolivar state. Changes in resource development or investment policies or shifts inpolitical attitude in Venezuela may adversely affect the company's business.Operations may be affected in varying degrees by government regulations withrespect to restrictions on production, price controls, export controls, incometaxes, expropriation of property, maintenance of claims, environmentallegislation, land use, small miners' activities, land claims of local people,water use and mine safety. The effect of these factors cannot be accuratelypredicted. In the past, Venezuela has imposed exchange controls that make itdifficult for foreign mining companies to repatriate profits. All foreigncurrency derived from the export of products from Venezuela, including gold,must be sold to the Central Bank at the fixed exchange rate at the time of thetransaction. Foreign investors have the right to apply to the Central Bank forforeign currency at the fixed exchange rate for the purposes of repatriationof capital, dividends and interest. The provisions of the Investment Protection Treaty with Canada, which wasratified by Venezuela on January 20, 1998, should provide certain protectionsto Canadian-based investors (like the company) in Venezuela. Medoro Resources is a gold exploration and development company focused onacquiring properties of merit for potential joint ventures with seniorproducers. The company has acquired a 100% interest in the Lo Increible 4A and4B concessions in Venezuela. Further information is available on our websiteat www.medororesources.com. THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASEFor further information: Robert Doyle, Executive Vice President, (416)603-4653, rdoyle(at)medororesources.com(MRL) ENDMEDORO RESOURCES LTD