TORONTO, ONTARIO--(Oct. 30, 2008) - Garrison International Ltd. (TSX VENTURE:GAU) (the "Company" or "Garrison") is pleased to announce that, further to the Company's plan to move the Tovshiir gold project into production at the earliest possible date, the Company confirms has received approval from the Mongolian government for construction of ore processing facilities on the Tovshiir property. The Company has also applied to the Mongolian government for a production permit, which is required prior to the commencement of production.
About the Tovshiir Gold Property
Garrison's Tovshiir gold project consists of a 75% interest in six Mongolian mineral-related licenses. The Company, through its wholly owned Mongolian subsidiary, Garrison Asia LLC, purchased its interest in this project from Asia Intercept Mongolia LLC ("AIM"). AIM retains a 25% interest in the project. Once the Company has spent US$1,800,000 on exploration of this project, all further expenditures are to be funded on a pro rata basis between Garrison and AIM.
The Tovshiir gold project lies about 550 km southwest of Ulaan Baatar. Present on the Tovshiir property are gold quartz veins and stockworks, which are hosted in the diorites and granodiorites of the Arvayhaar Ingneous complex. These veins parallel a regional N-S sheer zone, pinching and swelling along strike and depth. Garrison has completed a geophysical survey of the Tovshiir gold project.
Prior to the Company's acquisition of its interest in the Tovshiir gold project, a Chinese-Mongolian joint venture operated a gold mine on the property. Although no significant equipment was left on the site of the Tovshiir gold project, the previous operator left behind a small open cut with exposed mineralization and many large sample pits that could be used to define the near surface mineralization. Ore grade was discovered remaining in the pits and open cut and has been extended by the Company's diamond drill program.
Tovshiir Gold Property Update
During the past few months and in anticipation of receiving permits from the Mongolian government, the Company has commenced construction to prepare the Tovshiir property for production. Earthworks have been completed, and the Company is building the concrete foundation and other supporting concrete structures for the facility. The ball mill to be used at the Tovshiir property is scheduled to be delivered to the site this quarter. A heated building on the plant site is under construction and is expected to be completed in the 4th quarter of 2008. The heated building will facilitate continued work at Tovshiir during the coming winter. JPCM Ltd., an Australian quarry group, has been selected as the contractor to undertake mining and to perform primary and secondary crushing at the Tovshiir property.
Prior to the commencement of production, the Company must acquire additional equipment, including a Knelson concentrator and tanks, and complete the tailings dam. The Company estimates that an additional $1,000,000 will be required to be expended on the Tovshiir property prior to commencement of production. Of the $1,000,000 required, approximately $400,000 would be used to purchase and install a lining for the tailings dam, $300,000 would be used to purchase the Knelson concentrator and tanks, and $300,000 would be used as working capital. Until the Tovshiir project is able to generate significant working capital for the Company, it will also be necessary for the Company to raise additional financing to fund its general, administrative and other expenses.
Management of the Company is pleased by the level of activity at the Tovshiir property and is confident that, building upon the work that has been completed at this site over the past few months and assuming the remaining financing can be obtained, the Tovshiir property will be brought into production early in 2009.
Garrison is currently looking to secure private financing to complete the process of bringing the Tovshiir gold project into production. Further to discussions with AIM, management of Garrison anticipates that a portion of the funds required would be contributed by AIM in order to preserve AIM's 25% interest.
Purchase of Exploration Licence
The Company's wholly-owned subsidiary, Garrison Asia LLC, has entered into an agreement with Bigerkhairkhan, a limited liability company registered under the laws of Mongolia, to purchase exploration license 13839X for cash consideration of US$350,000. Payment of US$315,000 of the purchase price has been made to Bigerkhairkhan, with the balance of the purchase price to be paid in due course. Title to this exploration license has been transferred to Garrison Asia LLC. This exploration license covers property that is adjacent to the Tovshiir property, providing the Company with the possibility of expanding its exploration activities onto neighbouring additional land that may have production potential.
Termination of Third Tranche of Private Placement
The Company is also announcing that, with the mutual consent of Asia Goldworks Limited ("AGL"), the parties will not proceed with the third and final closing of its previously announced private placement with AGL. As discussed in greater detail further in this release, AGL has invested a total of $3,000,000 in the Company (out of the total $5,000,000 AGL had committed to invest in the Company) through two closings that occurred on March 27, 2008 and May 30, 2008.
The third and final closing, for gross proceeds of $2,000,000, was to occur pursuant to a share purchase agreement that provided that AGL would invest an aggregate of $5,000,000 in the Company by acquiring up to 50,000,000 common shares units ("Units") of the Company in three closings. Pursuant to that agreement, each Unit, priced at $0.10, was to consist of one common share and one purchase warrant exercisable at a price of $0.12 for one common share of the Company for 18 months from the date of issue. Further details of the share purchase agreement may be found in the Company's press release dated March 18, 2008.
Two closings have occurred pursuant to the share purchase agreement between AGL and the Company, and a total of $3,000,000 was invested by AGL in exchange for 30,000,000 Units. The Company received final acceptance from the TSX Venture Exchange for the first and second closings of the private placement. In a press release dated June 19, 2008, management of the Company advised that the third closing would be postponed.
About the Company
Garrison is a junior mineral exploration company focused on acquiring and developing advanced stage gold properties in Mongolia. For complete details on Garrison International Ltd. and its partners, management encourages investors and interested parties to view its public documents filed on SEDAR at www.sedar.com.
For all Garrison International Ltd. investor relations needs, investors are asked to visit the Garrison International IR Hub at http://www.agoracom.com/ir/garrison where they can post questions and receive answers within the same day, or simply review questions and answers posted by other investors. Alternatively, investors are able to e-mail all questions and correspondence to gau@agoracom.com where they can also request to be added to the investor e-mail list to receive all future press releases and updates in real time.
CAUTIONARY STATEMENT
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. All statements in this news release, other than statements of historical fact, are forward-looking statements that involve various risks and uncertainties, including, without limitation, statements regarding the future plans and objectives of Garrison International Ltd. There can be no assurance that such statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. These and all subsequent written and oral forward-looking statements are based on the estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Garrison International Ltd. assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.
Shares Outstanding - 97,738,057
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. |
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