TORONTO, ON, April 26, 2011 – Gowest Gold Ltd. (“Gowest” or the “Company”) (TSX Venture: GWA, OTCBB: GWSAF, Frankfurt: 1GW) is pleased to announce it has entered into an Option and Joint Venture Agreement (the “Option Agreement”) with Transition Metals Corp. (“TMC”) to explore and earn an interest in an additional 3400 hectares (34 square kilometres) in the Porcupine mining district (the “Pipestone Property”). The majority of the
Pipestone Property is located on the Pipestone Fault and along strike from the company’s developing Frankfield Project. Pipestone Fault like structures are critical for controlling gold mineralization in the Abitibi region including that at the Frankfield East deposit and other gold deposits in the area such as Clavos to the southeast. Gowest’s Frankfield East deposit appears to be part of a larger structurally controlled gold-hosting system and will be the subject of an updated resource estimate in the coming weeks. The company will announce a conference call to be held in connection with the release of this estimate.
Further to the Option Agreement, Gowest increases its total exploration property interests to approximately 6000 hectares (60 square kilometres) along the largely undeveloped Pipestone Fault in the Timmins camp. It is the Company’s interpretation that the Pipestone Fault is a splay off the prolific Porcupine-Destor Fault, the source of in excess of 70 million ounces of historic gold production. Through its ongoing work at the Frankfield project, management of Gowest has developed an intimate understanding of the regional geology and effective methods for identifying high priority gold targets. The Company’s land package now includes a contiguous block of claims extending approximately 20km along the Pipestone Fault from the Frankfield East deposit southeast towards the Clavos deposit which contains a NI 43-101* compliant gold resource of 37,000 ounces measured and indicated and 110,000 ounces inferred.
Timmins Area Map – Frankfield Property and Location of New Pipestone Property
Greg Romain, President and CEO of Gowest, commented: “We are excited to be able to announce this transaction along with a working relationship with Transition Metals under this agreement. The members of the management team at Transition Metals have years of experience working in the area and their knowledge will be invaluable in advancing exploration on the properties.” Mr. Romain further commented: ” As Gowest has furthered its understanding of the area geology and has experienced sustained exploration success at Frankfield East other companies have begun to take an interest in exploring within close proximity of our Frankfield Project. The company continues to see this interest as a validation of our own belief in the growing potential of the area. The new acquisition now cements our position as a leading player in the area, the value of which will only be enhanced and accelerated by ongoing success at Frankfield East. The Frankfield East gold deposit has the potential to be one of the most significant new deposits in a long time in a previously unmined area of Timmins.”
Transaction Details
Pursuant to the Option Agreement, Gowest can earn an initial 60% interest in and to the Pipestone Property by expending $1,000,000 on the property over a period of three years. Gowest is also required to pay $100,000 cash ($50,000 immediately and $50,000 within 12 months) and to issue 400,000 common shares (100,000 immediately and 300,000 within three years) to TMC in order to acquire the initial interest. Upon earning an initial 60% interest in the Pipestone Property, Gowest may elect to earn an additional 15% interest in the Pipestone Property (bringing the total interest to 75%) by issuing to TMC an additional 150,000 common shares and expending an additional
$2,000,000 on the Pipestone Property over a period of two years. Upon earning either a 60% or 75% interest, as applicable, a joint venture will automatically be formed between Gowest and TMC, pursuant to which the companies will continue to explore and develop the Pipestone Property as warranted. Should either party’s joint venture interest be diluted below 10%, its interest will converted to a 2% Net Smelter Royalty.
About Gowest
Gowest is a Canadian gold exploration and development company focused on the delineation and development of its 100% owned Frankfield East gold deposit. Gowest is exploring additional gold targets on the Frankfield land package and continuing to evaluate acquisition targets in the vicinity of the Frankfield project area, part of the prolific Timmins, Ontario gold camp.
About Transition Metals
Transition Metals Corp (www.transitionmetalscorp.com) is a private Company focused on the identification, exploration and development of new gold opportunities in established and emerging gold districts in Canada.
*Technical Report on the Taylor, Clavos, Hislop and Stock Projects in The Timmins area Northeastern Ontario, Canada. Prepared for St Andrews Goldfields Ltd. October 2, 2006.
For further information please contact: Greg Romain
President & CEO Tel: (416) 363-1210
Email: [email protected] Or
Rory Quinn Investor Relations
Toll Free: (877) 363-1218
Tel: (416) 363-1210 ext. 208
Forward-looking statements
This news release contains certain “forward looking statements”. Such forward-looking statements involve risks and uncertainties. The results or events depicted in these forward-looking statements may differ materially from actual results or events. Any forward-looking statement speaks only as of the date of this news release and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward- looking statement, whether as a result of new information, future events or results or otherwise.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OF THIS RELEASE.
