Solomon Signs Formal Option Agreement on Rwanda Property; Balance of Unit Private Placement to be Completed
VERNON, BRITISH COLUMBIA--(Marketwire - Oct. 26, 2012) - Solomon Resources Limited (TSX VENTURE:SRB) is pleased to report it has signed a definitive agreement whereby it has been granted an option to acquire 100% of the Rurembo Property, a prospecting licence covering approximately 1,000 square kilometers in the Republic of Rwanda.
The Rurembo Mineral Prospecting Licence offers a highly prospective exploration target for tin, tantalum, niobium and tungsten mineralization in Neo-Proterozoic pegmatite dykes, griesens and quartz veins within Meso-Proterozoic granitic massifs and associated metapelites, quartzites and dolerites.
The property is located in the Kibaran Belt of Central Africa, a belt of Mesoproterozoic supracrustal metasediments and minor metavolcanics intruded by coeval S-type granitic massifs and subordinate mafic bodies. The Kibaran Belt trends generally northeast over 1,300 kilometers from the Katanga Region in the Democratic Republic of the Congo to the Ankole Region of southeastern Uganda. The belt hosts a large metallogenic province which contains numerous granite-related ore deposits primarily of tin-tungsten-tantalum which occur as primary mineralization in quartz veins, griesens and pegmatites as well as secondary alluvial or elluvial deposits.
The Rurembo licence area includes mineralized pegmatite swarms immediately peripheral to the cassiterite-columbite-tantalite mineralisation of Gatumba and unexplored strike extensions of that metallogenic district to the north. Solomon is conducting an inventory of the artisanal miners currently working in the licence area.
Exploration targets include an alteration zone identified by aeromagnetics on the northern flank of the Gitarama granitic massif where strong fault deformation is seen in the ENE-WSW striking Satinsyi-Rutongo Shear Zone and an area on the eastern edge of the voluminous Gisenyi granitic massif underlain by Satinsyi metasediments and amphibolites structurally complicated by the Kabaye-Kivuye Shear Zone and North Satinsyi Shear Zone. The North Satinsyi Shear Zone includes a highly altered sequence of Satinsyi Complex metasediments and amphibolites intruded by younger Tertiary volcanics along the length of the shear zone which extends from the northern boundary of the licence area to the Gatumba pegmatite field.
It has been reported that, between 1929 and 1985, the Gatumba area produced 17,600 tonnes of mixed cassiterite and columbite-tantalite concentrate (locally called "coltan") primarily from the exploitation of eluvial and alluvial deposits and from deeply weathered pegmatites. Only limited exploitation of primary pegmatites has been attempted, since mechanical crushing and mineral concentration has to date proven uneconomic. At present, there is mainly sporadic artisanal production including one adit which has been driven into the Gatumba South deposit at Cyemo. Very selective high-grade extraction of enriched "poches-de-griesen" is currently taking place at the Gatumba Mining Concession.
To exercise the option, Solomon must issue 12,000,000 common shares to the optionors: 6,000,000 shares following receipt of TSX Venture Exchange approval (currently pending) and the remaining 6,000,000 common shares upon the prospecting licence being successfully converted to an exploration or production licence prior to its expiry on February 21, 2014. Solomon is required to carry out $1,000,000 in exploration on the Property over two years ($500,000 per year) which exploration expenditure terminates upon the prospecting licence being converted. Concurrently with the second issuance of shares, the optionors will also be repaid loans from them to a company holding the property of approximately $200,000. The optionors may elect to instead receive an equivalent amount of common shares of Solomon at a deemed value of $0.05 each. The optionors will no longer have the right to appoint two nominees to Solomon's board of directors.
The option also remains subject to the completion of a private placement raising at least $500,000.
Solomon has closed the first tranche of a private placement for proceeds of $328,200 by the issuance of 6,564,000 units at $0.05 per unit. Each unit consisted of one common share and one non-transferable share purchase warrant to purchase a further common share at $0.10 for two years. The expiry date of all warrants may be reduced to 25 trading days from notice thereof if the closing price of Solomon's shares equals or exceeds $0.25 for 20 consecutive trading days after the expiry of the four month restricted resale period on January 24, 2013.
Solomon has received subscriptions for a further $404,000 in respect of, and is expecting to shortly close, its second and final tranche of the private placement. To facilitate such closing, it has obtained an extension to November 2, 2012 of the filing deadline with the TSX Venture Exchange for the private placement.
The private placement remains subject to TSX Venture Exchange approval.
About Solomon Resources Ltd.:
Solomon Resources Ltd. is a Canadian public company focused on the acquisition, exploration and development of quality mineral properties worldwide. Solomon is managed by a proven team of exploration geologists involved with the discovery and development of a number of significant mineral deposits including the Snip and Eskay Creek deposits in British Columbia and the Brewery Creek deposit in the Yukon Territory.
Solomon's business model is that of a Project Generator. To build shareholder value, the Company intends to acquire highly prospective mineral tenures in stable jurisdictions with the objective of adding value through grassroots exploration and target refinement and then seeking option or joint venture partners through to production.
FOR FURTHER INFORMATION PLEASE CONTACT:
Solomon Resources Limited
Randall S. Rogers, M.Sc., P.Geo.
President and Chief Executive Officer
(866) 831-6666 or (778) 475-5551
(778) 475-5541 (FAX)