Here is the news:
23 October 1997 FOR IMMEDIATE RELEASE
Loan Agreements
The Company has entered into agreements with two directors of the Company for loans totalling $385,000. The loans have a 90 day term and bear interest at 10 per cent The agreements contain a provision for repayment in cash, or, at the lenders' option, in shares of the Company. If paid in shares, the shares will be issued at the price of $0.55. If the entire face value of the loans was to be repaid in shares, 700,000 shares would be issued. In accordance with the policies of the Vancouver Stock Exchange, as additional consideration for the loans, the lenders will be issued non-transferable warrants for the purchase of 280,000 shares for a one year term, exercisable at the price of $0.55 per share. Any shares issuable on conversion of the loan or on exercise of the warrants will be subject to a one year hold period from the agreement date. These agreements are subject to regulatory approval. The loan proceeds will be used primarily to fund drilling and exploration costs on the Company's gold exploration project at San Jose de Gracia, Sinaloa State, Mexico.
Shares for Debt Agreements
The Company has entered into agreements with two major creditors of its Mexican subsidiary to settle debts totalling $US558,496 (translated as $Cdn775,655) by the issue of a total of 1,388,500 shares. 918,100 shares are to be issued at the price of $0.563 and will not be subject to a hold period when issued. 470,400 shares are to be issued at the price of $0.55 and will be subject to hold period of one year from the dates incurred, which are between June 30, 1997 and October 14, 1997. These shares for debt agreements are subject to regulatory approval.
Project Finance
Further to the news release of October 2, 1997, the Company advises that certain major mining companies continue to show interest in participating in the ongoing development of the San Jose de Gracia gold project. Technical and corporate due diligence is ongoing. No agreements have been reached to date. Material developments will be advised as they arise.
On Behalf of the Board
"Ian D. Brown"
Ian D. Brown, Secretary
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