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Last updated on April 20, 2014 at 14:04 EDT

Maudore Acquires Sleeping Giant Processing Facility and Gold Assets from North American Palladium

March 23, 2013
        --  Owning production facility advances strategy of becoming
            dominant consolidator in prime Quebec mining region

        --  Experienced workforce and fully operational mill with tailings
            facility

        --  $18 million cash consideration, funded by borrowings under a
            $22 million secured credit facility by FBC Holdings Sarl, plus
            1,500,000 common shares

MONTREAL, March 23, 2013 /CNW Telbec/ – Maudore Minerals Ltd. (“Maudore”
or the “Company”) (TSX : MAO) (US OTC : MAOMF) (Frankfurt Exchange : M6L) is pleased to announce that it has purchased the Sleeping Giant
Mill and an adjacent Tailings Facility (together, the “Processing
Facility”) from North American Palladium Ltd. (“NAP”) (TSX: PDL; AMEX: 
PDL) through its acquisition of all of the outstanding shares of NAP
Quebec Mines Ltd. (“NAP Quebec”) in accordance with a Purchase
Agreement entered into on March 22, 2013 between Maudore and NAP.  The
Processing Facility is strategically located 60 km west of Maudore’s
Osbell Deposit and 150 km north of Val-d’Or, Quebec, along Highway 109,
a route which continues north to Matagami, Quebec.

As a result of its acquisition of NAP Quebec, Maudore has also acquired
all of NAP’s Quebec-based gold assets.

In consideration for the shares of NAP Quebec, Maudore has paid to NAP a
cash consideration of $18 million, which has been funded through the
credit facility described below, and has issued to NAP 1,500,000 common
shares. These common shares will be subject to a four-month hold period
in accordance with Canadian securities laws. Neither NAP, NAP Quebec
nor any of their insiders shall become an insider of Maudore as a
result of the acquisition. The TSX Venture Exchange (the “TSXV”) has
approved the acquisition.

The consummation of this transaction allows Maudore to further advance
its strategy of consolidating its position in a highly prospective yet
grossly under-explored region within a globally competitive mining
jurisdiction, and provides the Company with a degree of optionality as
regards the development of its resources.  Moreover, in addition to
having a strategically important land position of 144,000 ha (1,440 km(2)) in the Northern Volcanic Zone of the Abitibi Greenstone Belt of
Quebec, Maudore is also inheriting a highly talented workforce capable
of developing its resources.

“The acquisition of the Sleeping Giant Mill and Tailings Facility run by
its highly skilled and experienced work force is truly the most
transformative event in the history of our Company,” said Kevin
Tomlinson, Chairman of Maudore. “With new mining facilities and advanced stage exploration properties contiguous to our existing
properties, we now have a total land package of 144,000 ha. This
represents the first in a series of planned steps for Maudore to
consolidate significant holdings in the prolific Northern Abitibi
region of Quebec and positions the Company to become a leading Canadian
gold producer capable of delivering shareholder value through the
exploration, development and production of our properties.”

The Processing Facility is designed to operate at a rate of 900 tonnes
per day (tpd), and is currently processing between 400-600 tpd with +/-
92% gold recovery, five days per week, treating underground ore  from
the Vezza gold project as it continues to ramp up to a production
footing.  Ore is fed through a grizzly into a crushing plant with a
primary jaw crusher and two cone crushers with screening, then to a rod
mill and two ball mills to produce a pulp that undergoes conventional
leaching followed by a CIP (carbon in pulp) circuit, stripping
facilities, electrowinning and an induction furnace to produce gold
dore.  In 2010, NAP determined that the Processing Facility could be
upgraded in two phases from 900 to 1,250 tpd, and then from 1,250 to
1,750 tpd.  NAP initiated the upgrade and later put the expansion on
hold in order to focus on their palladium assets.  It is expected that
the adjacent Tailings Facility could last approximately 10 years at
this higher throughput rate with additional expansion work within the
facility and the underground operations, as indicated in a NAP Quebec
internal report completed in 2012 by AMEC Amériques Ltée.

Mr. Tomlinson affirmed that “it has been our vision, since assuming
responsibility for Maudore’s future in July of 2012, to become the
dominant consolidator in the Region, and owning our own production
facility was an integral component for executing that strategy. The
location of the facility, within 60 kilometers of our Osbell deposit,
provides us with the opportunity to become a cost effective producer. 
It also fits well with our efforts to arrange a merger with Eagle Hill
Exploration Corporation, whose Windfall Lake resource is well within
trucking distance of the Sleeping Giant Processing Facility.” Mr.
Tomlinson further remarked that “we fully intend to continue to explore
one of the largest continuous land packages in the Northern Abitibi and
welcome our new employees and partners in the Region.”

The table below sets forth current resources of Maudore after giving
effect to the acquisition of NAP Quebec:

     _____________________________________________________________________
    |Project|     Mineral Resource Estimates  |Gold Resource|             |
    |       |                                 | (x1000 oz)  |   Category  |
    |_______|_________________________________|_____________|_____________|
    |Osbell |8,463,800 tonnes at 2.0 g/t gold |       546   |   Indicated |
    |       |(Au) for 546,299                 |             |             |
    |       |ounces indicated and 8,115,800   |      1,259  |   Inferred  |
    |       |tonnes at 4.8 g/t Au for         |             |             |
    |       |1,258,990 ounces inferred        |             |             |
    |       |(Maudore press release of        |             |             |
    |       |October 29, 2012).               |             |             |
    |_______|_________________________________|_____________|_____________|
    | Vezza |A 2010 measured and indicated    |       288   |  Measured   |
    |       |resource of 1,510,000            |             |and Indicated|
    |       |tonnes grading 5.9 g/t Au for    |             |             |
    |       |287,500 ounces and an            |       122   |  Inferred   |
    |       |inferred resource of 754,000     |             |             |
    |       |tonnes grading 5.0 g/t Au        |             |             |
    |       |for 121,500 ounces Au.           |             |             |
    |_______|_________________________________|_____________|_____________|

    Note:  Totals do not add up due to rounding. Osbell Resource Estimate
    for Maudore Minerals Ltd. Nov 30, 2012 by Alain Carrier, PGeo
    (InnovExplo Inc.), Pierre-Luc Richard, PGeo (InnovExplo Inc.),
    Christian D'Amours, PGeo (GeoPointCom), and Alain Dorval, Eng.
    (InnovExplo Inc.); Vezza Resource Estimate for North American Palladium
    Ltd. by Scott Wilson Roscoe Postle Associates Inc., 2010 prepared by
    Bernard Salmon, PEng and Petr Pelz, PGeo.

In compliance with National Instrument 43-101 Standards for Mineral Projects (“NI 43-101″), a NI 43-101 compliant technical report in respect of the
Vezza project will be prepared by the Company within the next 45 days.
The Company has retained Christian D’Amours, PGeo (GeoPointCom) to
prepare such report.

The table below sets forth the historical mineral resource estimates
acquired with the purchase of NAP Quebec.  A qualified person has not performed sufficient work to classify the
historical estimates as current mineral resources; and Maudore is not
treating the table of historical mineral resource estimates as current
mineral resource estimates.

     _____________________________________________________________________
    | Project |   Historical Mineral Resource |Gold Resource|   Category  |
    |         |            Estimates          | (x1000 oz)  |             |
    |_________|_______________________________|_____________|_____________|
    |Discovery|2008 measured resources of     |        1    |   Measured  |
    |         |3,109 tonnes grading 8.95      |             |             |
    |         |g/t for 895 ounces, indicated  |       236   |   Indicated |
    |         |resource of 1,278,973          |             |             |
    |         |tonnes grading 5.74 g/t Au for |       294   |   Inferred  |
    |         |236,180 ounces and an          |             |             |
    |         |inferred resource of 1,545,500 |             |             |
    |         |tonnes grading 5.93 g/t        |             |             |
    |         |Au for 294,473 ounces.         |             |             |
    |_________|_______________________________|_____________|_____________|
    | Flordin |A 2011 measured resource of    |       166   |  Measured   |
    |         |116,000 tonnes grading         |             |and Indicated|
    |         |3.25 g/t Au for 12,133 ounces  |             |             |
    |         |Au, indicated resource of      |       137   |  Inferred   |
    |         |2,707,000 tonnes grading 1.77  |             |             |
    |         |g/t Au for 153,998             |             |             |
    |         |ounces Au, and 2,199,000 tonnes|             |             |
    |         |grading 1.95 g/t Au            |             |             |
    |         |for 137,561 ounces Au.         |             |             |
    |_________|_______________________________|_____________|_____________|
    |Sleeping |A 2008 measured and indicated  |       153   |  Measured   |
    |  Giant  |resource of 489,200            |             |and Indicated|
    |         |tonnes grading 9.7 g/t Au for  |             |             |
    |         |152,743 ounces Au.             |             |             |
    |_________|_______________________________|_____________|_____________|

    Note: Totals do not add up due to rounding.  The subsequent section
    cautions readers on the relevance and reliability of historical mineral
    resource estimates presented in this table. Historical mineral reserves
    are not included.

The Discovery historical resource estimate is sourced from “Technical
Report on the Scoping Study and Mineral Resource Estimate for the
Discovery Project (according to Regulation 43-101 and Form 43-101F1)”
by InnovExplo Inc., prepared by Carl Pelletier, PGeo for Cadiscor
Resources Inc. in 2008.  The historical estimate is not relevant today
because additional diamond drilling completed by NAP Quebec since 2008
must be included, and the cut-off grade applied to the resource
estimate must be re-evaluated in light of present market conditions
(gold price, exchange rate, and mining cost).  Maudore believes that
the historical estimate is reliable because Maudore has worked
extensively with InnovExplo and the author since 2006, and believes
that all work was completed at a high professional standard.  Resource
categories used in the historical estimate are in compliance with CIM
Definition Standards on Mineral Resources and Mineral Reserves. 
Parameters used are minimum mining width of 1.6 m (horizontal
thickness), cut-off grade of 3 g/t Au, capping grade of 35 g/t Au, and
specific gravity of 2.82 g/cm(3). Polygonal on longitudinal method used cross sections to confirm grade
and thickness, which were located on a longitudinal section, where
polygons were traced and the volume and grade calculated (using AutoCAD
and Promine software).  In order to upgrade the historical estimate new
drilling must be digitized, validated, and quality control protocols
checked, prior to appending to the current drill database which will
then be imported to GEMs software to generate a block model and
estimate a mineral resource.  All work must be completed by qualified
persons and evaluated to the current 43-101 Standards for Mineral
Projects.  A qualified person has not performed sufficient work to classify the
Discovery historical estimate as a current mineral resource; and
Maudore is not treating the Discovery historical mineral resource
estimate as a current mineral resource estimate.

The Flordin historical resource estimate is sourced from “43-101
Technical Report and Resource Estimate on the Flordin Property
(according to Regulation 43-101 and Form 43-101F1)” by InnovExplo Inc.
and prepared by Pierre-Luc Richard, PGeo and Carl Pelletier, PGeo for
North American Palladium Ltd in 2011, which was filed on SEDAR.  The
historical estimate is not relevant today because additional diamond
drilling completed by NAP Quebec since 2011 must be included, and the
cut-off grade applied to the resource estimate must be re-evaluated in
light of present market conditions (gold price, exchange rate, and
mining cost).  Maudore believes that the historical estimate is
reliable because Maudore has worked extensively with InnovExplo and the
authors since 2006, and believes that all work was completed at a high
professional standard.  Resource categories used in the historical
estimate are in compliance with CIM Definition Standards on Mineral
Resources and Mineral Reserves.  InnovExplo used the squared inverse
distance method to interpolate gold grades in a block model, and a
pit-shell confined portions of the model.  A minimum cut-off grade of
0.5 g/t Au was used for the open pit portion of the Mineral Resource
Estimate and a minimum cut-off grade of 3.50 g/t Au was used for the
underground model.  Drill hole intercepts were calculated to a 3.0
meter minimum true thickness and specific gravity of 2.8 t/m(3) was used.  In order to upgrade the historical estimate new drilling
must be added to the database, validated and quality control protocols
checked, prior to being appended to the current dataset for a
subsequent block model, mineral resource estimate, and possible Whittle
pit shell model.  All work must be completed by qualified persons and
evaluated to the current 43-101 Standards for Mineral Projects.  A qualified person has not performed sufficient work to classify the
Flordin historical estimate as a current mineral resource; and Maudore
is not treating the Flordin historical mineral resource estimate as a
current mineral resource estimate.

The Sleeping Giant historical resource estimate is sourced from
“Technical Report, The Sleeping Giant Mine Northwestern Quebec” by
Genivar LP, and prepared by Tyson Birkett, PEng, Josée Couture, PEng,
and Christian Bézy, PGeo for Cadiscor Resources Inc. in 2008.  The
historical estimate is not relevant today for several reasons: 1)
additional drilling completed by NAP Quebec since 2008 must be
included; 2) material mined by NAP Quebec since 2008 must be subtracted
from the historical resource estimate (prior reserve estimates are not
included for this reason); 3) cut-off grade applied to the resource
estimate must also be re-evaluated in light of present market
conditions (gold price, exchange rate, and mining cost); 4) recent work
and subsequent reporting by NAP Quebec not available to the public have
demonstrated the historical estimate is out of date.  Maudore believes
that the historical estimate can be relied on because much of it is
based on mining experience at Sleeping Giant and believes that work was
conducted at a high technical standard and the author is an employee of
NAP Quebec and is known to Maudore.  Resource categories used in the
historical estimate are in compliance with CIM Definition Standards on
Mineral Resources and Mineral Reserves.  Mineral resources were
calculated using the polygon method on inclined longitudinal sections,
which has been used in the past to yield reliable results.  Capping
varied from 60-250 g/t Au depending on the vein;  grades, tonnage and
costs derived from actual mining were integrated, and minimum mining
width 1.6m applied to stopes with dip greater than 50° and minimum
mining width 1.8m applied to stopes with dip less than 50°.  Nominal
dilution of 15% was applied, and mining recovery varied from 75-100%. 
In order to upgrade the historical estimate, a massive project of
digitization of paper records is required, then new drilling must be
added to the database, validated, and quality control protocols
checked.  Underground workings must be digitized and subtracted from a
block model, likely generated using GEMs software, followed by a
resource calculation.  All work must be completed by qualified persons
and evaluated to the current 43-101 Standards for Mineral Projects.  A qualified person has not performed sufficient work to classify the
Sleeping Giant historical estimate as a current mineral resource; and
Maudore is not treating the Sleeping Giant historical mineral resource
estimate as a current mineral resource estimate.

NAP QUEBEC FINANCIAL INFORMATION

The following tables set out certain financial information in respect of
NAP Quebec prepared by management for the fiscal years ended December
31, 2012 and 2011. Such information has been prepared in accordance
with International Financial Reporting Standards and was included in
the notes to the financial statements filed by NAP on Sedar.


    The carrying values of the major classes of assets and liabilities
    of NAP Quebec are as follows:

                                                            December 31,

                                                                  2012

                                                                $000's

    Assets                                                              

    Cash and cash equivalents                                        553

    Taxes receivable                                               4,522

    Inventories                                                    7,257

    Other current assets                                             770

    Mining interests                                              16,712

    Total assets                                                  29,814

    Liabilities                                                         

    Accounts payable and accrued liabilities                       5,908

    Obligations under finance leases                                  58

    Asset retirement obligation                                    6,105

    Total liabilities                                             12,071

    The results of operations of NAP Quebec are as
    follows:                                                            

                                                      2012        2011

                                                    $000's      $000's

    Revenue                                           3,004       26,813

    Mining operating expenses                                           

    Production costs                                  2,153       31,601

    Smelting, refining and freight costs                 16           54

    Depreciation and amortization                       199        7,460

    Gold assets impairment charge                    56,023       49,210

    Gain on disposal of equipment                     (435)         (27)

    Gold mine closure, care and maintenance costs     1,463            -

    Total mining operating expenses                  59,419       88,298

    Loss from mining operations                    (56,415)     (61,485)

    Other expenses                                                      

    Exploration                                       2,768        6,728

    General and administration                           62           82

    Other income                                       (37)         (34)

    Interest expenses and other costs                   130          111

    Total other expenses                              2,923        6,887

    Loss before taxes                              (59,338)     (68,372)

    Income and mining tax recovery (expense)          4,704      (1,174)

    Loss and comprehensive loss for the year       (54,634)     (69,546)

$22 MILLION CREDIT FACILITY

The $18 million purchase price for the shares of NAP Quebec is fully
funded by a senior secured credit facility in the amount of $22 million
provided to Maudore by FBC Holdings Sarl (“FBC”), an arm’s length
party, on March 22, 2013 (the “Credit Facility”). The Credit Facility
bears interest at the rate of 15% per annum, payable quarterly in
arrears, with a maturity date of March 22, 2016. In order to secure repayment of the Credit Facility, Maudore has granted
to FBC a first-ranking charge over all of its and its subsidiaries’
present and future personal property and material real property,
including specified mining rights.

In consideration of the commitment made by FBC under the Credit Facility
and in lieu of further structuring fees, Maudore has issued to FBC
1,760,000 common shares and 880,000 common share purchase warrants.
Each warrant shall entitle FBC to subscribe for one common share during
a period of 2 years following the date of its issuance, at a price
equal to $1.08, being the closing price of common shares of Maudore on
the TSXV on March 22, 2013. The foregoing securities will be subject to
a four-month hold period in accordance with Canadian securities laws.
The TSXV has approved the issuance of the common shares and warrants to
FBC.

EQUITY PRIVATE PLACEMENT OF UP TO $25 MILLION

The Company intends to proceed with a private placement of units on a
“best efforts” basis for gross proceeds of up to $25 million (the
“Private Placement”), at a price per unit to be determined in the
context of the market, subject to TSXV requirements. Each unit shall be
comprised of one common share of Maudore and one-half of a common share
purchase warrant. Each whole warrant shall entitle its holder to
subscribe for one common share during a period of two years following
the date of its issuance, at a price to be determined in the context of
the market, subject to TSXV requirements. The securities issued under
the Private Placement will be subject to a four-month hold period in
accordance with Canadian securities laws. The net proceeds of the
Private Placement shall be used to explore, develop and expand existing
projects and operations, to fund corporate activities with respect to
growth initiatives, and for other general and corporate purposes.

A total of $13 million has been committed to the Private Placement by
certain investors, including FBC for the amount of $5 million and the
following related parties to Maudore (the “Related Parties”) for the
following amounts:

        --  Approximately $4 million by City Securities Limited, a
            corporation owned by Mr. Seager Rex Harbour, a shareholder of
            Maudore who controls or directs more than 10% of the total
            issued and outstanding common shares of Maudore; and

        --  Approximately $1 million by Kevin Tomlinson, the Chairman and
            CEO of Maudore.

This portion of the Private Placement is expected to close on or about
April 11, 2013, subject to the receipt of all requisite regulatory
approvals.

The Company has retained GMP Securities L.P. to act as its lead agent,
together with a syndicate of agents, including Clarus Securities Inc.
and Mirabaud Securities LLP, in connection with the Private Placement.

The Private Placement to the Related Parties shall constitute a “related
party transaction” within the meaning of Multilateral Instrument 61-101
(“MI 61-101″), which is incorporated into TSXV Policy 5.9. In its
consideration and approval of the Private Placement, the board of
directors of Maudore determined that the Private Placement to the
Related Parties will be exempt from the formal valuation and minority
approval requirements of MI 61-101 on the basis that the fair market
value of the Private Placement to the Related Parties is not expected
to exceed 25% of the market capitalization of Maudore, in accordance
with sections 5.5 and 5.7 of MI 61-101.

PRIVATE PLACEMENT OF CONVERTIBLE NOTES OF UP TO $2 MILLION

The Company may determine to proceed as well with the issuance of up to
$2 million in aggregate principal amount of convertible secured notes
by way of a private placement, the terms of which would be determined
in the context of the market, subject to TSXV requirements. If such
were to occur, FBC has committed to subscribe for the entire amount of
the placement.

Qualified Persons

Kevin R. Kivi, P.Geo., of KIVI Geoscience Inc., who is Maudore’s Chief
Consulting Geologist, approves the technical content of this press
release.

About Maudore Minerals Ltd.

Maudore is a Quebec junior gold company with more than 23 exploration
projects, of which five are at an advanced stage of exploration with
reported current and historical resources.  The Company’s projects span
some 120 kilometers, east-west, of the underexplored Northern Volcanic
Zone of the Abitibi Greenstone Belt and cover a total area of 144,000
hectares (1,440 km(2)) with the Sleeping Giant Processing Facility within trucking distance
of all projects.

Quebec is consistently ranked amongst the best locations worldwide for
mineral exploration and development, with low cost power, proper
infrastructure, mining-oriented local communities and a skilled
workforce.

Cautionary Statement Regarding Forward-Looking Statements and Third
Party Information

This release and other documents filed by the Company contain
forward-looking statements. All statements that are not clearly
historical in nature or that necessarily depend on future events are
forward-looking, and the words “anticipate”, “believe”, “expect”,
“estimate”, “plan” and similar expressions are generally intended to
identify forward-looking statements. These forward-looking statements
include, without limitation, statements regarding the integration of
the properties, assets and employees of NAP Quebec with those of the
Company, the closing of the Private Placement, the potential merger
with Eagle Hill Exploration Corporation, future results of operations,
performance and achievements of the Company, including potential
property acquisitions, the timing, content, cost and results of
proposed work programs, the discovery and delineation of mineral
deposits/resources/reserves, geological interpretations, potential
mineral recovery processes and rates, business and financing plans,
business trends and future operating revenues. These statements are
inherently uncertain and actual achievements of the Company or other
future events or conditions may differ materially from those reflected
in the forward-looking statements due to a variety of risks,
uncertainties and other factors, including, without limitation,
financial related risks, unstable gold and metal prices, operational
risks including those related to title, significant uncertainty related
to inferred mineral resources, operational hazards, unexpected
geological situations, unfavourable mining conditions, changing
regulations and governmental policies, failure to obtain required
permits and approvals from government authorities, failure to obtain
any required approvals of the TSXV, failure to obtain any required
shareholder approvals, failure to obtain any required financing,
failure to complete any of the transactions described herein, increased
competition from other companies many of which have greater financial
resources, dependence on key personnel and environmental risks and the
other risks described in the Company’s annual information forms and
other continuous disclosure filings with securities regulators
available under the Company’s profile at www.sedar.com. It is recommended not to place undue reliance on forward-looking
statements as the plans, intentions or expectations upon which they are
based might not occur. The Company does not assume any obligation to
update any forward-looking statements contained in this release, except
as required by applicable law.

Certain information appearing in this press release pertaining to NAP,
NAP Quebec, Cadiscor Resources Inc. and their respective assets and
operations has been obtained by the Company from information made
publicly available by NAP and Cadiscor Resources Inc. and the Company
assumes no responsibility for the completeness or accuracy of such
information.

Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.

 

SOURCE Maudore Minerals Ltd.


Source: PR Newswire