VANCOUVER, BRITISH COLUMBIA, Oct. 5, 2009 (Marketwire) -- Central Resources Corp., (TSX VENTURE:CBC) ("Central" or the "Company") is pleased to announce that it has entered into a letter of intent ("LOI") with Redstar Gold Corp. (TSX-V: RGC) setting forth the proposed terms and conditions of a transaction whereby Central can earn a 60 percent undivided interest in the Newman Todd property in Ontario. Central also announces a non-brokered private placement offering of up to 5.5 million Units at $0.10 per Unit to raise proceeds of up to $550,000.
Newman Todd Property
The Newman Todd Project is located in the Red Lake gold mining camp in Northwestern Ontario. Previous work by Redstar on the Newman Todd property has outlined gold values within a silicified breccia zone that can be traced for at least two kilometres. Redstar has intersected values up to 61.02 g/t gold over 1.0 meter within a wider zone of 14.22 g/t gold over 5.0 metres or 60.0 metres of 1.72 g/t gold in previous drill programs. The Newman Todd property has a very similar geologic setting to many of the major mines in the Red Lake camp such as Goldcorp's Campbell and Red Lake mines. Similarities include proximity to a major structure, secondary northwest-southeast trending structures, proximity to a folded ultramafic body and association with a large Fe-carbonate alteration zone.
Stephen Kenwood, P. Geo., a "Qualified Person" as defined by National Instrument 43-101, has reviewed and approved the technical disclosure in this news release.
Letter of Intent
Pursuant to the LOI, the parties have agreed to negotiate a binding option agreement. Under the terms of LOI, Central can earn a 50 percent interest in the project over a four year period by funding $4.5 million in exploration and development work and issuing 500,000 shares to Redstar. In addition, Central must spend $1,000,000 in exploration expenses by September 30, 2010 and an additional $500,000 by December 31, 2010. Central can earn an additional 10 percent interest in the project by funding an additional $2 million in exploration and development work and issuing 750,000 shares by December 31, 2014.
The negotiation of the binding agreement is subject to satisfactory due diligence by Central, acceptance for filing by the TSX Venture Exchange and Central raising a minimum of $400,000.
Private Placement
Central is offering, on a non-brokered, private placement basis, up to 5.5 million Units, each Unit to consist of one common share and one share purchase warrant. Each warrant will entitle the holder to purchase an additional share for a period of two years at a price of $0.20 per share in the first year and $0.40 per share in the second year.
The proceeds of the private placement will be used to conduct exploration on the Newman Todd property and for general working capital.
