Dec. 11, 2013 14:00 UTC

Klondike Gold Signs Letter of Intent for Disposition of Portuguese Assets

VANCOUVER, British Columbia--(BUSINESS WIRE)-- Klondike Gold Corp. (TSX.V:KG) (“Klondike”) announces that it has signed a Letter of Intent (“LOI”) with Medgold Resources Corp. (“Medgold”) for the acquisition by Medgold of 100% of Klondike’s Portuguese assets comprised of five gold exploration permits covering 604 square kilometers located in northern Portugal. The terms of the acquisition are subject to approval by the TSX Venture Exchange.

The Portugal project combine five exploration licences (Balazar, Valongo, Legares, Castelo do Paiva and Ponte de Barca), with four covering the majority of the Valongo geological belt and gold occurrences, plus Ponte de Barca which covers orogenic gold occurrences, collectively located in the north of Portugal.

The terms for the acquisition of Klondike’s Portuguese assets are as follows:

  • Payment of $10,000 in cash to Klondike upon signing of the LOI.
  • Medgold will have up to 45 days to complete due diligence and if satisfactory will make a payment of $40,000 in cash and $100,000 in Medgold shares, and complete the acquisition.
  • A final payment in 12 months of $100,000 in cash and $250,000 in cash or shares (to be decided by Medgold).
  • On closing of the purchase, Klondike will retain a 2.0% NSR, which will be re-purchasable for $1.0 million per percentage point.

Dan James, President of Medgold, said, “By significantly increasing our exploration portfolio, this acquisition underpins our objective to become a leading gold explorer and developer in Western Europe. Our land-holding in Portugal now covers over 1,000 sq km of highly prospective ground.”

Peter Tallman, President and CEO of Klondike states “This divestiture focuses Klondike on its substantial core Canadian assets while continuing participation in Portuguese exploration through equity participation in Medgold. Medgold has an established focus and demonstrated expertise in exploration of Portugal and Spain.”

The Company confirms it has received $500,000 in loans from various investors to cover immediate operating expenses and help restructure the company.

ABOUT KLONDIKE GOLD CORP.

Klondike Gold Corp., is a Canadian exploration company with offices in Vancouver, British Columbia, and Dawson City, Yukon. The Company is focused on the development of its Yukon gold properties, and also holds a large portfolio of gold and base metal projects in southeastern British Columbia.

On behalf of Klondike Gold Corp.

“Peter Tallman”

President and CEO
(604) 609-6110

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contacts

Klondike Gold Corp.
Peter Tallman, 604-609-6110
President and CEO


Source: Klondike Gold Corp