Majestic Gold Corp. has provided the following shareholder update.
Majestic's subsidiary, Majestic China Holdings Corp., has entered into a non-binding letter of intent with Yantai Baiheng Gold Mining Co. Ltd. on the Shuang Shan Tun and Xia Yu Cun properties, located in the Muping-Rushan gold belt in Shandong province, China.
The letter of intent is principally a due diligence agreement that allows Majestic China a 12-month detailed due diligence period, after which Majestic China has the option to enter into a definitive agreement for one or both of the properties. During the due diligence period, Majestic China will also hold the right of first refusal over any third party proposal similar in nature to those being contemplated.
Shuang Shan Tun and Xia Yu Cun are both small-tonnage, medium-high-grade underground gold projects that have been developed as small-scale producers. Majestic China intends to determine the economic viability of larger-scale development of either property on a joint venture basis.
The completion of the joint venture is subject to the completion of due diligence on exploration and development work completed on the properties to date, the completion of a scoping-study-level evaluation of the properties, as well as the approval of the TSX Venture Exchange and all other required regulatory, corporate and securityholder approvals. During the due diligence period and prior to entering into a definitive agreement with Baiheng, Majestic China does not have any obligations to Baiheng.
Further to the company's news release on Aug. 6, 2014, Majestic's operating subsidiary, Yantai Zhongjia Mining Co. Ltd., has received final government approval to expand its mining licence at its Songjiagou gold mine from 0.342 square kilometre to 0.594 square kilometre. In advance of this, work in the pit at Songjiagou has included the development of a second access road into the pit to enable increased haulage of waste to two new waste dump areas that have been acquired in close proximity to the pit.
All data contained in this news release have been reviewed and approved by Stephen Kenwood, PGeo, who is a qualified person under the definitions established by National Instrument 43-101.
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