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VANCOUVER, BRITISH COLUMBIA–(Marketwire – Nov. 3, 2011) – Harmony Gold Corp. (TSX VENTURE:H) (the “Company” or “Harmony“) is pleased to announce it has signed a Letter of Intent (the “LOI“) with Montauk Mining and Minerals Ltd. (“MMM“) to acquire up to a one hundred percent (100%) interest, subject to a one and a half percent (1.5%) net smelter return (the “NSR“), in the Kafwego-Mufumbwe Copper Property, being 1 copper mining concession covered by 10 year Mining License 8058-HQ-SML Kafwego-Mufumbwe located 100 kilometers north of Kaoma, Zambia (the “Property“).
Option Terms
Pursuant to the LOI and in consideration of the payment of U.S.$25,000, Harmony has been granted the sole and exclusive option to acquire up to a one hundred percent (100%) beneficial interest in and to the Property (the “Option“), free and clear of all encumbrances other than the NSR, in consideration of i) issuing MMM or its designates twenty million (20,000,000) common shares in the capital of Harmony; ii) making cash payments of an aggregate U.S.$1,200,000; and iii) completing a two phase work programme on the Property, all in stages as set out below.
The completion of the transaction is subject to a number of conditions including, but not limited to, TSX Venture Exchange (“TSXV“) approval.
Harmony may exercise the initial Option and earn an undivided 51% interest (the “First Option“) in the Property by: (a) issuing five million (5,000,000) common shares in the capital of Harmony and paying MMM the sum of $75,000 within 5 business days of receiving the acceptance of the TSXV to the transaction; (b) completing a Phase 1 work programme on the Property, such Phase 1 programme to consist of geological and geophysical mapping, trenching, soil sampling and any other necessary work to delineate drill targets; (c) issuing Five Million (5,000,000) common shares in the capital of Harmony and paying MMM the sum of U.S.$150,000 upon completion of the Phase 1 work programme on the Property, which programme recommends a further phase of exploration on the Property.
Provided Harmony exercises the First Option, it may exercise an additional portion of the Option and earn an additional nineteen percent (24%) undivided interest in and to the Property (the “Second Option“), free and clear of all encumbrances other than the NSR, for an aggregate seventy five percent (75%) interest by: (a) conducting a Phase 2 exploration program on the Property, consisting of a minimum of 3,000 metres of drilling; (b) issuing Five Million (5,000,000) common shares in the capital of Harmony and paying MMM the sum of U.S.$200,000 upon completion of the Phase 2 work programme on the Property, which programme recommends a further phase of exploration or development on the Property.
Provided Harmony exercises the Second Option, it may exercise the final portion of the Option and earn an additional twenty five percent (25%) undivided interest in and to the Property (the “Final Option“) free and clear of all encumbrances other than the NSR, for an aggregate one hundred percent (100%) interest by issuing Five Million (5,000,000) common shares in the capital of Harmony and paying MMM the sum of $750,000 within a period of six months from the date of exercise of the Second Option.
In the event Harmony earns a minimum fifty one percent (51%) undivided interest in the Property, it may determine to form a joint venture with MMM, with each party being responsible for its proportionate share of ongoing exploration expenditures.
Harmony has agreed to pay a cash Finder’s fee to West Isle Ventures Ltd. in the amount of $75,000, calculated in accordance with the policies of the TSXV.
This transaction is subject to standard closing conditions including due diligence and analysis by each of the parties, the parties completing a definitive agreement and obtaining TSXV approval.
HARMONY GOLD CORP.
Craig Michael Engelsman, President
Neither 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.
