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I'd love some feedback here...just caught this on the wire. Is this as big as i'm reading it to be? Any insight would be appreciated...i pasted the PR below.
Paramount Gold Signs Agreement to Create Gold Alliance in Argentina, Chile and Peru
Tuesday, May 16, 2006, 4:00 pm EST
Lima, Peru – (BUSINESS WIRE) – May 16, 2006 – Paramount Gold Mining Corp. (OTC:PGDP, Frankfurt:P6G) (“Paramount”) is proud to announce the signing of an agreement to create the Andean Gold Alliance (“AGA”) with Teck Cominco Limited (TSX: TEK.MV.A and TEK.SV.B) (“Teck Cominco”) and its subsidiaries in Chile, Peru and Argentina. The AGA, initially consisting of 21 properties (10 in Argentina, 7 in Chile and 4 in Peru), creates a strategic alliance between Paramount and Teck Cominco for gold exploration in these three countries. The AGA also provides for a mutual Right of First Offer with respect to the divestiture of new and existing gold exploration properties over significant parts of Argentina, Chile and Peru.
Commenting on the Alliance, Alain Vachon, Paramount’s Manager of Exploration, South America stated, "I am very excited to be heading up exploration on such a high quality property portfolio. Over the last three years, Teck Cominco has staked more than 100 targets using the latest technical exploration tools. In particular, Teck Cominco is one of the larger mineral claim owners in Argentina with more than 500,000 hectares and I believe that Argentina is the most under-explored country in South America." The newest member of the Paramount team, geologist Mark Slauenwhite, formerly with Barrick Gold, will be working directly with Alain Vachon on the AGA.
Under the terms of the agreement, Paramount can vest in the AGA by incurring a minimum expenditure of US$3,000,000 over 3 years, with US$1,000,000 in expenditures (including a minimum of 3,000 metres of drilling on 3 properties) per year. In addition Paramount must issue Teck Cominco 210,000 units on signing and another 50,000 units a year for a total of 360,000 units. Each share will include a common share and a 2 year stock purchase warrant that shall be priced at a 30% premium to the 20 day trading average prior to issue.
Upon Vesting in the AGA, Paramount may earn a 100% interest in individual properties (with separate option for each property), subject to a retained 2% NSR Royalty and back-in right (as outlined below) to Teck Cominco, by incurring an aggregate expenditure (from the initial date of this agreement) of US$250,000 (including a US$50,000 minimum annual commitment) with respect to an individual property.
Teck Cominco may exercise its back-in right on each AGA property at any time up to 60 days after Paramount delivers notice that Paramount has spent US$3,000,000 on the individual property. Teck Cominco may earn a 60% interest by incurring 2 times the expenditures incurred by Paramount to a maximum requirement of US$6,000,000. Upon earning back a 60% interest, Teck Cominco shall extinguish the retained NSR Royalty and may elect to earn an additional 10% interest by completing, at its sole cost, a feasibility study on the property.
Teck Cominco has also agreed to participate in a private placement financing in Paramount by way of the purchase of 117,750 units at a price of $4.25 each for a total value of approximately US$500,000, where each unit shall include one common share and one 2 year stock purchase warrant exercisable at $5.00.
Chris Crupi, President of Paramount Gold stated, "This is an exceptional opportunity for Paramount shareholders and fits perfectly with our strategy of acquiring properties in the most prolific metals districts in the world. The agreement will give Paramount access to a steady flow of quality projects, generated by a very strong project evaluation group. I believe this opportunity will result in the discovery of numerous economic deposits, thus creating long-term shareholder value."
About Paramount Gold
Paramount Gold Mining Corp. is a precious metals exploration and development company. It is management's objective to grow Paramount into a significant gold and precious metals producer by developing the San Miguel and Linda projects in Mexico and Peru, and the Andean Gold Alliance in South America and by acquiring other advanced-stage projects and/or producing mines in the most prolific precious metal districts in the world. The Company trades on the OTC market under the symbol “PGDP” and on the Frankfurt Exchange under the symbol “P6G”. For more information, please visit the Company’s web site at: www.paramountgold.com (now available in the following languages: English, German, French, Spanish, and Mandarin).
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained herein which are not historical are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, certain delays beyond the company's control with respect to market acceptance of new technologies or products, delays in testing and evaluation of products, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.
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