PINNACLE BUYS GOLD ASSETS FROM TENAJON; ACQUIRES BALANCE OF KANSAS & PAST PRODUCER SUMMIT LAKE
Vancouver, BC - Pinnacle Mines Ltd. (PNL-TSX.V) (“Pinnacle”) is pleased to announce that it has entered into a binding letter agreement (the “Letter Agreement”) whereby Pinnacle will purchase Tenajon Resources Corp.’s (“Tenajon”) wholly owned subsidiary, 0781639 B.C. Ltd. (the “Corporation”), which holds an undivided 40% ownership interest in and to the Kansas Claim and a 100% ownership interest in and to the Summit Lake property. Pinnacle has agreed to purchase the Corporation for an aggregate deemed purchase price of approximately $3,015,000 (the “Acquisition”), subject to an adjustment as a result of certain events occurring before December 31, 2008. The Kansas Claim and the Summit Lake property are both located near Stewart, British Columbia. Upon completion of the Acquisition, Pinnacle will own an undivided [70.6%] interest in and to the Kansas Claim and 100% of the Summit Lake Property. The remaining [29.4%] undivided interest in the Kansas Claim is owned by Mountain Boy Minerals Ltd.
Based on a NI 43-101 compliant Technical Report on the Silver Coin Property (which encompasses the Kansas Claim) prepared by Minefill Services, Inc. of Seattle, WA in April 2007, upon completion of the purchase, Pinnacle will have control over 70.6% of 364,307 ounces of gold resources in the measured and indicated category plus 719,599 ounces of gold resources in the inferred category on the Kansas Claim alone and now own 100% of the past producing Summit Lake gold property.
On the entire Silver Coin property, upon completion of the purchase, Pinnacle will control approximately 67.8% of 423,003 ounces of gold resources in the measured and indicated category plus approximately 65.8% of 947,988 ounces gold resources in the inferred category. “This acquisition makes Pinnacle one of the most dominant gold exploration companies in the prolific Stewart Camp,” said Paul Saxton, President and CEO of Pinnacle.
Tenajon shareholders shall receive approximately one share of Pinnacle for each 4.13 shares of Tenajon which they hold based on the current number of Tenajon shares issued and outstanding. The number of shares to be distributed will be subject to an adjustment based on the actual share structure at the record date. “The sale of the Corporation will allow Tenajon to focus on its molybdenum projects and will benefit its shareholders by allowing them to participate in a gold focussed entity which will have consolidated several significant gold deposits in the Stewart Camp,” said D. Bruce McLeod, president and CEO of Tenajon.
On closing of the Acquisition, Pinnacle will issue 13,500,000 fully paid shares of Pinnacle (“Pinnacle Shares”) and reimburse Tenajon up to $200,000 in cash in respect of reclamation deposits, exploration costs incurred by Tenajon on the Summit Lake property and certain other expenses. Under the terms of the Acquisition, Tenajon is required to distribute the Pinnacle Shares to its shareholders on a pro-rata basis by way of a plan of arrangement (the “Arrangement”). The Pinnacle Shares are subject to a four month hold period from the date of issuance under applicable securities laws and the rules and policies of the TSX Venture Exchange and will be subject to further contractual trading restrictions until completion of the Arrangement. Tenajon has also agreed to grant to the management of Pinnacle a voting proxy on all of the Pinnacle Shares, the proxy shall expire on completion of the Arrangement. Tenajon has also granted Pinnacle an option to purchase the 3% net smelter royalty held by Tenajon on the Summit Lake property by payment to Tenajon of $115,000 in cash. Closing of the Acquisition is subject to satisfaction of certain conditions including regulatory approvals, confirmatory due diligence, and satisfaction of all covenants and conditions required to be performed by each of Pinnacle and Tenajon. The Acquisition is scheduled to close on or about May 16, 2008.
The technical information in this news release has been prepared in accordance with Canadian regulatory requirements set out in National Instrument 43-101 and reviewed by A. Alex Walus, M. Sc., P. Geo. of Pinnacle Mines Ltd., a Qualified Person as defined by NI 43-101.
Pinnacle Mines Ltd. is a Canadian based mineral exploration company with assets in Canada and Mexico. In Canada, Pinnacle holds properties in Northwestern British Columbia in proximity to numerous past and producing mines including the Silbak-Premier Mine and Barrick Gold’s famed Eskay Creek Mine. In Mexico, Pinnacle has an option with Chesapeake Gold Corp. to acquire 70% of its La Calavera and Rio Minas projects in the state of Oaxaca.
For further information about this news release contact John Van Duzen at 604-688-7377. For more information on Silver Coin and the Kansas Claim or to view the entire April 27, 2007 Technical Report on the Silver Coin Property, visit Pinnacle’s website at www.pinnaclemines.com .
On Behalf of the Board of Directors
“Paul Saxton”
President & CEO
The TSX Venture Exchange has not reviewed and does not accept responsibility
for the adequacy or the accuracy of the content of this news release.