Marlowe Regulatory News (MRL)

13 Jun 2006 07:00

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 PanwestSeas Corporation Ltd., which holds the rights to the Lo Increible 4A & 4Bexploration properties located in the El Callao area of the State of Bolivar,Venezuela. Under the renegotiated terms, Medoro will issue 15,140,000 common sharesto the shareholders of Panwest in consideration of the acquisition of Panwest,a reduction of 2,000,000 shares. As previously agreed, the company will alsopay US$1,000,000 in cash at closing and a royalty of US$15 per ounce of goldon all production from the Lo Increible 4A & 4B mining properties. The sharesto be issued will represent approximately 30.1% of the issued shares of thecompany and will be allocated between two arms-length vendors. The acquisitionof Panwest remains subject to regulatory approval and definitivedocumentation. Prior to the renegotiation, the acquisition was considered a "relatedparty transaction" under Ontario Securities Commission Rule 61-501 due tocertain insiders of Medoro being shareholders of Panwest. Under therenegotiated terms, these insiders will not be shareholders of Panwest norwill they be entitled to any consideration under the proposed acquisition. Asa result, Panwest and its shareholders are entirely at arm's length to thecompany and the acquisition is no longer a related party transaction;therefore, the company advises that the valuation and fairness opinion datedApril 27, 2006 prepared by Haywood Securities Inc. in respect of the previoustransaction and all references to such valuation in the company's ManagementInformation Circular (the "Circular") dated April 27, 2006 are withdrawn. The Circular also included a summary of certain information, includingresource and mineable reserve estimates, that was taken from the TechnicalReport (the "Original Report") entitled "Lo Increible 4A and 4B MiningProperties El Callao Mining District, Bolivar State, Venezuela" prepared byDavid Mayes Consulting Ltd. dated April 24, 2006. The Original TechnicalReport was subsequently amended and re-dated as of May 15, 2006 (the "AmendedReport") and filed on SEDAR on May 16, 2006, after the date of the Circular.The Amended Report clarified that the resource estimates were prepared priorto National Instrument 43-101 and were therefore historical estimates, andalso deleted the references to mineable reserves, as no current economicanalysis has been completed. Accordingly, readers of the Circular arecautioned to rely upon the Amended Report and not the summary of the OriginalReport found in the Circular. The full Amended Report can be viewed on SEDARat www.sedar.com. Medoro Resources is a gold exploration and development company focused onacquiring properties of merit for potential joint ventures with seniorproducers. 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, (416) 603-4653, pvolk(at)medororesources.com (MRS. MRL)ENDMEDORO RESOURCES LTD