EXPLORATION – Marchmont moves into Eritrea

Calgary-based Marchmont Gold (MHM-A) has signed a letter-of-intent to purchase, in exchange for shares, a private company that has a majority stake in four gold properties in Eritrea

The contract would give Marchmont a 100% interest in Gold Corp. of Africa (GCA), which in turn owns a 75% interest in Eritrean Minerals Corp. (EMC).

The deal is subject to several conditions, including EMC’s ability to renew 3-year exploration licences on three of the four properties and an independent geological report on the whole land package.

To complete the acquisition, Marchmont must raise $900,000 through a rights offering or private placement and secure shareholder approval of a 2-for-1 share consolidation.

To purchase GMC, Marchmont will issue 4 million units of Marchmont. Each unit will consist of one common share and one warrant that allows the holder to purchase one share for 35 cents within 18 months of the closing date. The deal is valued at about $480,000.