Regal Goldfields Limited
Suite 915 - 20 Adelaide Street East
Toronto, Ontario
Canada M5C 2T6
Tel (416) 364-11630, Fax (416) 364-6745
PRESS RELEASE
CDN: REGL For Immediate Release
June 12, 1998
Toronto, Ontario......Regal Goldfields Limited ("Regal")(CDN-REGL) announces
that it has agreed to purchase $500,000 of a non-brokered private placement
of $650,000 principal amount of convertible debentures of Excellon Resources
Inc. ("Excellon") (VSE-EXN) subject to final approval by the Regal Board of
Directors, finalization of financing arrangements and approval by regulatory
authorities.
The debentures will be issued at par and bear interest at 10% per annum from
the issuance until conversion. The debentures are convertible into units of
Excellon on the basis of one unit for each $0.15 of principal in the first
year and $0.1725 of principal in the second year. Each unit consists of one
common share and one common share purchase warrant. Each whole common share
purchase warrant will be exercisable to purchase one additional common share
for two years from the closing at a price of $0.25 per common share in the
first year and $0.35 per common share in the second year.
The conversion of the debentures requires the approval of the shareholders
of Excellon. Excellon will be calling an extraordinary general meeting as
soon as possible to request shareholder approval to the full conversion of the
debentures. Upon conversion of the debentures Regal would own 23.1% of the
then outstanding common shares of Excellon (32.1% on a fully diluted basis).
Excellon is a mineral exploration company which has concentrated its
exploration efforts in Mexico. Excellon currently has two properties in
Mexico, namely the Platosa property and the Descubridora and Rod property.
The Platosa property (approximately 20,000 acres) is located 5 kms northwest
of the town of Bermijillo, Durango State, Mexico and lies 1.5 kms from a
major paved highway, railroad and electric supply. An initial
reconnaissance program was carried out in October, 1997 by Excellon's
geological consultants which included geochemistry, geological
interpretation, mapping and sampling (47 samples). The following summary is
taken from their report.
Mineralization observed at Platosa is typical of that seen throughout the
2,200 km long belt of replacement-skarn deposits that crosses northern
Mexico. Platosa lies centrally within this belt and offers attractive
possibilities for containing additional economic base and precious metals
rich skarn-replacement ores. The area lies only 25 km from the Ojuela Mine
at Mapimi which produced 5-6 million tons of ore grading in excess of 3.5
g/T Au, 475 g/T Ag, 15% Pb, 10% Zn and .2% Cu (Penoles Company data, 1986).
There has been previous mining at Platosa where more than 75,000 tons of
high grade ores were recovered from the old workings. Five selected samples
were taken from the existing underground workings. Assays from the samples
ranged from 5.1% to 39% Zn, 12% to 19% Pb, 960 g/T to 1600 g/T Ag, 0.3g/T to
9.6g/T Au and 1% to 3% Cu. Furthermore 1970's vintage smelter liquidation
sheets for the Platosa Mine ores show 0.35-1.75 g/T Au, 3,000-3,750 g/T Ag,
30-40% Pb, and 2.0-12% Zn. The fact that these grades, and the style of
mineralization, are very similar to those at Mapimi, strongly indicates the
Mapimi-like orebodies and/or metals contents might be expected at Platosa.
The property has been owned by a Mexican family and, until Excellon's recent
involvement, has never had modern geological techniques applied to it nor
has it ever been drilled.
In March 1998, Excellon entered into a letter of intent with Apex Silver
Mines Corporation ("Apex") with respect to its Platosa property. Apex is a
world wide mining, exploration and development company with a primary focus
on silver. Its shares are listed on the American Stock Exchange (Symbol SIL).
Under the terms of the agreement, which is subject to completion of formal
documentation, Apex can earn a 65% direct interest in the property with
Excellon retaining a 35% interest. At that point a joint venture would be
formed with Apex. Should Apex decide to bring the property into production
it would provide Excellon with a bankable feasibility study. Apex has
advised that it has commenced an exploration program consisting of
geological mapping with the objective of developing drill targets over the
next several months.
The agreement provides for property expenditures by Apex to Excellon of
US$1.35 million over 5 years and minimum exploration expenditures of US$1.5
million by Apex over the same time period. Excellon is responsible for
making all property payments (totaling US$973,000 over 4.5 years) to the
underlying property owner during the option period. The agreement with Apex
is subject to acceptance for filing by the Vancouver Stock Exchange.
The Descubridora/Rod property (98,000 acres) is located approximately 35 km
southwest of the Platosa property. Subsequent to the acquiring of the
Descubridora/Rod property an initial reconnaissance program was carried out
by Excellon's geological consultants. This program included sampling (269
samples), mapping and geological interpretation.
The principal objective f the reconnaissance work was to outline general
areas within the overall Descubridora/Rod Project with sufficient
mineralization potential to justify increasingly detailed exploration.
Three areas were delineated for follow-up work and an additional
mineralization style that should be evaluated was recognized. Given the
geology and ore deposits of the region, the potential targets include:
Cu-Zn-Pb-Ag-Au skarns and replacements in limestone; sediment-hosted
stockwork or disseminated Au, Ag deposits in clastic sediments; and
intrusive-related, sediment-hosted Ag-Zn-Pb disseminations or stockworks.
Three immediate target zones have been outlined that can be brought to drill
readiness within 3-4 months of field work. These areas are probable
mesothermal Cu-Zn-Pb-Ag-Au replacements and skarns hosted in Cretaceous
carbonate rocks. They are characterized by well-developed and distinctive
alteration, strong geochemical signatures, nearby known mineralization, and
geophysical anomalies.
Regal presently has 14,290,054 common shares and 2,000,000 special warrants
outstanding. The special warrants are exercisable into 2,000,000 common
shares and 1,000,000 common share purchase warrants within six business days
after a receipt is issued by the Ontario Securities Commission for a final
prospectus qualifying such common shares and warrants, or on June 23, 1999,
whichever is earlier. Each common share purchase warrant entitles the
holder to acquire one common share in the capital of Regal at an exercise
price of $0.20 per common share at any time on or before December 23, 1999.
Regal is engaged in exploration for and development of mineral properties in
Canada. It currently has active exploration programs in northwestern Cape
Breton Island, Nova Scotia, and in Kidd Township near Timmins, Ontario.
For further information, please contact:
Richard Brissenden
President, Regal Goldfields Limited
Tel: (416) 364-1130
Fax: (416) 364-6745
E-mail: regalgld@interlog.com
NO REGULATORY AUTHORITIES OR SIMILAR BODIES HAVE APPROVED OR DISAPPROVED THE
INFORMATION CONTAINED HEREIN. |
