News

TONOGOLD TO ACQUIRE 100% OF IRON ORE PROJECT, MEXICO

Tonogold Resources Inc. (OTC: TNGL) (the “Company”) is pleased to announce it has agreed terms with the owners of Mil-ler Resources and Energy SA de CV (“Mil-ler”), owner of the Nevmex producing iron ore project located near Hermosillo, Sonora in Mexico, to merge the companies in a non-cash transaction as an alternative to the previous arrangements.

This new deal will result in the existing iron ore operations being 100% owned by Tonogold upon the issue of 541 million Tonogold shares to the shareholders of Mil-ler (subject to Tonogold shareholders approving a 1 for 10 reverse share split and an adjustment to the authorized capital to enable the shares to be issued).

The shareholders of Mil-ler have mutually agreed to a self-imposed trading restriction (in excess to those imposed by the SEC) with 75% of the shares issued being subject to at least a 12-month hold period, 50% an 18-month hold, and 25% subject to a 24-month hold, reflecting the long-term investment strategy of the current owners of Mil-ler.

On April 1, 2014, Tonogold announced that it had mandated EAS Advisors, LLC (“EAS”) to provide equity capital market advice and through Merriman Capital Inc. to assist the Company in its capital raising requirements in order to fund the acquisition of Mil-ler.

EAS undertook a site visit to evaluate the Mil-ler operations and meet with its stakeholders and subsequently recommended that the companies merge in order to align shareholders’ interests and make the investment more attractive to US investors. EAS reviewed the entire operations from the mine to port for the benefit of the shareholders of the Company.

As a consequence of Tonogold securing 100% of Mil-ler, the capital raising has increased from that previously announced (of $6 million) to $14 million to more rapidly advance the expansion and exploration of the Nevmex projects. The Company and EAS have received encouraging feedback in early discussions.

The increased offering will enable Tonogold to fund significant opportunities that have been identified not only on the project’s 135-square miles of prospective tenements but also to fund a number of regional consolidation opportunities as part of Tonogold’s significant growth objectives. Tonogold has an initial target to produce over 700,000 tonnes per year of Iron Ore within a 6-month time frame.

Tonogold has recently completed a $600,000 short-term loan note, convertible into shares at 5 cents per share or repaid (at the holders election following completion of the capital raising) to provide Tonogold with working capital in the short-term.

The Company expects to approve the issue of shares to Mil-ler and complete the 1:10 reverse share split at a Meeting of Shareholders in June 2014. Shareholders will be duly notified of this meeting in accordance with Notice of Meetings requirements.

The Company is continuing to work with its advisors in a bid to become a fully reporting entity as soon as possible. Additionally, we expect the reverse share split share price will provide Tonogold the opportunity to list on secondary exchanges in the near-term, as well attract a broader investor base.

Mr. Travis Miller, Mil-ler’s largest shareholder and general manager, will become Tonogold’s largest shareholder with him holding approximately 26% of the enlarged share capital of the Company. Mr. Miller has agreed to join the board of Tonogold as an executive director. Further details of Mr. Miller are provided as an appendix to this announcement.

Mr. Ashley, Tonogold’s CEO stated “The extremely professional and positive discussions between Tonogold and Mil-ler over the past months has provided increased confidence from both sides of the significant benefits that will result in consolidating 100% of this asset into Tonogold immediately. EAS’s extremely professional and diligent assessment of Tonogold and the project being acquired, coupled with their understanding of the US capital markets, particularly in the natural resource sector, has been invaluable and the revised structure, I believe, establishes an extremely sound foundation for Tonogold and paves the way for substantial growth with significant and real shareholder returns in the future. I am extremely happy with the relationship that has developed between Tonogold and the management and owners of Mil-ler and particularly look forward to working with Travis Miller and his team to build Tonogold into a significant and highly profitable iron ore producer.

Mr. Miller said “I am very excited to become an integral part of Tonogold. I believe that the synergies of our asset base and management team together with the experience and track record of Tonogold’s management in building substantial growth though fundamentally driven objectives and strategies in the resource sector will ensure that the full potential of our iron ore project will be realized in a professional and timely manner for the benefit of all shareholders.”

Mr. Eddie Sugar (the principle of EAS) said, “Although we were initially skeptical about the investment given the recent publicity in Mexico regarding iron ore, we were very pleasantly surprised to subsequently find a situation almost completely opposite of what we expected. Not only are the Mil-ler and Tonogold teams extremely professional and experienced, our understanding of Mexican iron ore and our skepticism were completely unfounded. We found the state of Sonora to be an extremely friendly place for mining and the supporting infrastructure to be of great quality, which even producers and developers in Australia and America would envy. We are very excited to be part of Tonogold’s future and believe they are well on their way to creating a considerable business with a combination of characteristics that are rare in iron ore; strong cash flow generation off of a very small capital expenditure base with the added benefit of very significant production growth potential.”

 

APPENDIX 1.

 Background of Mr. Travis Miller.

Mr. Miller is a US citizen but has lived in Mexico for the past 7 years and is fluent in Spanish. In 2008, Mr. Miller arranged the consolidated of the tenement package that is now the Nevmex project owned by Mil-Ler (a private Mexican entity). During 2011, through Mil-ler, Mr. Miller funded an exploration program over two areas in close proximity to the access road leading onto the tenements and established the Ponderosa and Vito 3 deposits. In 2012 Mr. Miller arranged for a large construction group in Mexico to take a 50% equity interest in Mil-ler by providing the mining fleet and process facilities to enable the commencement of production at Ponderosa. Under Mr. Miller’s management, production commenced in early 2013. Subsequent drilling has resulted in Ponderosa becoming much larger, with current expectations that it will provide the feed necessary to sustain a production rate of 360,000 tonnes of iron ore per annum for at least 5 years. Mr. Miller has significant mining and Mexican business experience.

 

Safe Harbor Statement.

This press release contains certain forward-looking information about Tonogold Resources, Inc. (“Tonogold”) which is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Words such as “expect(s),” “feel(s),” “believe(s),” “will,” “may,” “anticipate(s),” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of Tonogold Resources, Inc. that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include: our lack of operating revenue and earnings history, our need for additional capital to pursue our business strategy, some of our managers lack formal training in the mining business, the grade and quantity of minerals in our projects may not be economic, we do not have fee title to our properties, but derive our rights through leases and the Mining Law, changes to the Mining Law may increase the cost of doing business, we are a non-reporting company and as such do not make periodic filings with the Securities and Exchange Commission, we trade on the Pink Sheets and there can be no assurances that a liquid market will develop in our securities, mining is subject to extensive environmental regulations and can create substantial environmental liabilities, gold, silver and other metals are commodities which have substantial price fluctuations, a drop in prices could adversely affect future profitability and capital raising efforts, and mining can be dangerous and present operational hazards for employees and contractors. Readers are cautioned not to place undue reliance on these forward-looking statements. Tonogold does not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

 

For further information please contact:

Mark Ashley (mjashley3@gmail.com)

T: 858 456 1273

TONOGOLD RESOURCES SECURES OPTION TO ACQUIRE 51% OF MIL-LER RESOURCES AND ENERGY SA

La Jolla, California. February 19, 2014. Tonogold Resources, Inc. (OTC: TNGL) wishes to provide the market with an update with regard to the agreement that was reached with Mil-ler Resources and Energy SA (“Mil-ler”), a private Mexican company and owner of the Nevmex Iron Ore project in Mexico, details of which were announced late last year. The principal terms of the agreement provided Tonogold with the exclusive right to subscribe for 51,515 new shares in Mil-ler (increasing Mil-ler’s issued capital to 151,515 shares) representing a 34% equity interest in Mil-ler by investing $10 million in two tranches of $5 million each.

Subsequently, Tonogold announced a proposed Private Placement Offering of 120 million new shares in Tonogold at 5-cents per share to raise $6 million (before costs), in order to fund the initial investment in Mil-ler.

Tonogold believes that having the ability to take a controlling interest (+50%) in Mil-ler will substantially enhance the investor appeal of Tonogold.

 

New Agreements.

Tonogold, Mil-ler and Mil-ler’s current shareholders initiated discussions in this regard, and as a result Tonogold is pleased to advise the following:

1. Mil-ler has formally agreed to extend the term of the original option such that:
2. Tonogold’s ability to elect to invest the initial $5 million (to secure a 17% interest in Mil-ler) has been extended to March 28th 2014 (requiring the payment of $50,000 before February 28th 2014).
3. Tonogold’s right to invest a further $5 million to bring it’s interest in Mil-ler to 34% will expire 6 months from the date that the initial option is exercised (the “Second Option”).
4. The current shareholders in Mil-ler have today executed an agreement with Tonogold that provides Tonogold with an exclusive right (not obligation) to acquire from them, 25,758 existing Mil-ler shares (“Existing Shares”), representing 17% of Mil-ler’s enlarged issued capital, which if acquired, would result in Tonogold owning 77,273 Mil-ler shares (i.e. 51% equity interest). The principal terms of this agreement provide for the following:
5. Tonogold’s right to acquire the Existing Shares shall expire on the same day that the Second Option expires as described in paragraph 1b above (just over 7 months from now).
6. In the event that Tonogold elects to acquire the Existing Shares, the consideration payable shall be $6.0 million cash plus 59 million Tonogold shares. The number of Tonogold shares to be issued is subject to an adjustment formula in the event that Tonogold’s share price is above 10-cents per share at the time of the election. Further details are provided in Schedule 1 below.

Investment opportunity.

Three strong and significant magnetic anomalies (shown as the darker areas in the diagram) have recently been identified on tenements held by Mil-ler. At least one of these anomalies is coincidental with major iron ore outcropping. Each anomaly is over 5 kms (3.1 miles) long and up to 2 km (1.2 miles) – each having the potential to transform this project into a world-class iron ore producer.

The initial $5 million investment contemplated by Tonogold will be used to fund a 4 month, major drill program to test one of these anomalies.

The diagram shows the three strong and significant magnetic signature over tenements held by Mil-Ler (covering some 350 square kilometers – 135 square miles) as well as the more subtle anomalies over the two open pits that represent the current mining activities (Ponderosa and Fito). Note the darker shading highlights high magnetic signatures.

Ponderosa and Fito, were drilled in 2011 on a 25 by 25 meter pattern over an area of approximately 130,000 square meters, and is the basis of a mine plan that will provide 550,000 tonnes of ore per year, which after beneficiation will yield ~360,000 tonnes pa of final Iron Ore product which is shipped and sold to China.

A ground geophysical program will be undertaken followed by a drill program to test one of the three major anomalies immediately following Tonogold’s initial $5 million investment in Mil-ler. Drilling will be mainly core (diamond), employing 3-4 rigs for approximately 43,000 meters (~450 holes) down to a depth of around 100 meters on an initial grid pattern of 100 meters by 100 meters covering an area 5.0 kilometers by 0.9 kilometers. The area covered by this forthcoming drill program, (4,500,000 square meters), is some 33 times larger than that which hosts the deposits currently being mined, providing an order-of-magnitude of the potential for a quantum increase in iron ore production in the future.

 

Comments.

Tonogold’s CEO Mr. Ashley said “Tonogold’s decision to increase its investment in Mil-Ler from 17% to 51% will be made with the benefit of the results from the major drill program which is expected to confirm the magnitude of one of the three major magnetic anomalies and the ability to transform this project, and in turn, Tonogold, into a substantial profitable iron ore producer”. He added that he remains totally committed and extremely excited with the potential that this opportunity provides, and offered his appreciation for the commitment and flexibility of the management and shareholders of Mil-Ler in aiding Tonogold’s participation.

Mr. Travis Miller, the CEO and 50% shareholder in Mil-Ler stated “I am confident that the strength, experience and commitment of Tonogold’s management team will provide the necessary complimentary skills and disciplines required to optimize and unlock the significant value that we have already identified this project undoubtedly holds and to ensure a smooth transition to becoming a major iron ore producer”.

Tonogold expects that the re-structured arrangement will enable the successful completion of the capital raising expeditiously.

 

How to participate in Tonogold’s Private Placement Offering.

 Current shareholders and accredited Investors wishing to participate in Tonogold’s private placement by subscribing for shares at 5-cents per share, may do so by completing the Subscription Agreement (located at the back of The Private Placement Memorandum) and returning it, together with the subscription funds, to Tonogold in accordance with the instructions contained therein. The Private Placement Memorandum is available from the company by sending an email requesting same to mjashley3@gmail.com or by telephoning the Company on 858-456-1273 ext. 101.

 

Further information on Mil-ler.

• Production from the Ponderosa and Fito open pits commenced early 2013 and ramped up to a rate of 180,000 tonnes pa of final iron ore product grading around 57% Iron (Fe) by mid 2013.
• Mil-ler owns its own mining fleet and process facility, which was originally funded from shareholder equity and more recently from funds generated from operation. Toward the end of 2013, Mil-ler acquired additional mining equipment that will enable production to double to 360,000 tpa of final iron ore product in early 2014.
• Mining fleet owned by Mil-ler includes:
• 5 x Caterpillar Excavators
• 2 x Caterpillar front-end loaders
• 5 x 40 tonne trucks (2 Caterpillar and 2 Volvo)
• 2 x Caterpillar Bulldozers
• Grader, water truck, light towers
• Mil-ler’s un-audited balance sheet at December 31st 2013 highlights:
• Current assets of $0.6 million
• Net book value of Mining fleet and Process facilities – $3.4 million
• Net book value (other assets) – $0.3 million
• Current Liabilities – $0.2 million
• Long Term Assets and Long term liabilities – Zero
• Equity – $4.1 million
• Exploration and capital development costs are written off in the year that they are incurred.
• Mil-ler is debt free.
• Additional mining fleet was delivered at the end of 2013 and early 2014. Mining activities have been focused on advanced pre-strip in preparation for both open pits to be able to sustain a mining rate supporting the planned 360,000tonnes per annum of final iron ore product.
• In-situ iron grade of ~45% is upgraded to ~57% in the final product via a simple beneficiation process that involves 2-stage crushing followed by dry magnetic separation. Recovery of iron is estimated at 84% with 65% of tonnage recovered.
• Mil-ler made three shipments to China during 2013, totaling 80,000 WMT of Iron Ore at an average grade of 57% Fe, and received about $100 per tonne (gross). Costs of around $61/t include mining, processing, road transport to the Port of Guaymas, port fees and cost of shipping to China.

 

Schedule 1.

Consideration for the Existing Shares.

1. If the 30-day volume weighted average share price for Tonogold shares (“30-day VWAP”) at the time of Tonogold’s election to acquire the Existing Shares is 10-cents or less, the number of Tonogold shares to be issued to satisfy the share component of the consideration will be 59 million
2. If the 30-day VWAP of Tonogold’s shares is above 10-cents per share at the time of Tonogold’s election to acquire the Existing Shares, the number of Tonogold shares to be issued to satisfy the share component of the consideration will be the adjusted share component valuation (as described in 3 below) divided by the 30-day VWAP of Tonogold’s shares.
3. The value of the share component of the consideration payable in respect of the Existing Shares will increase by $0.77 million (from a base of $5.9 million) for each 1-cent increase above 10-cents per share calculated by using the 30-day volume weighted average share price for Tonogold at the time of Tonogold’s election to acquire the Existing Shares. This formula is designed to provide the current owners of the Existing Shares a share of the implied increase value of Mil-ler as reflected in Tonogold’s share price.

 

Safe Harbor Statement.

This press release contains certain forward-looking information about Tonogold Resources, Inc. (“Tonogold”) which is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Words such as “expect(s),” “feel(s),” “believe(s),” “will,” “may,” “anticipate(s),” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of Tonogold Resources, Inc. that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include: our lack of operating revenue and earnings history, our need for additional capital to pursue our business strategy, some of our managers lack formal training in the mining business, the grade and quantity of minerals in our projects may not be economic, we do not have fee title to our properties, but derive our rights through leases and the Mining Law, changes to the Mining Law may increase the cost of doing business, we are a non-reporting company and as such do not make periodic filings with the Securities and Exchange Commission, we trade on the Pink Sheets and there can be no assurances that a liquid market will develop in our securities, mining is subject to extensive environmental regulations and can create substantial environmental liabilities, gold, silver and other metals are commodities which have substantial price fluctuations, a drop in prices could adversely affect future profitability and capital raising efforts, and mining can be dangerous and present operational hazards for employees and contractors. Readers are cautioned not to place undue reliance on these forward-looking statements. Tonogold does not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

 

For further information please contact:

 

Mark Ashley, mjashley3@gmail.com

Phone: (858) 456-1273

TONOGOLD RESOURCES, INC. ENGAGES RM CORPORATE FINANCE FOR $6M CAPITAL RAISE

La Jolla, California. November 6, 2013. Tonogold Resources Inc. (the “Company”) (OTC: TNGL) is pleased to update shareholders with regard to the proposed capital raising as contemplated in our announcement to the market on October 18, 2013. The Company has today entered into agreement with RM Corporate Finance Pty Ltd (“RM Corporate Finance”) (a West Australian based corporate advisory firm), to lead and manage, on a “best endeavors” basis, the placement of 120,000,000 new shares in Tonogold at 5 cents per share to raise $6 million (before costs) primarily to fund the initial investment of $5 million in Mil-Ler Resources and Energy SA (“Mil-Ler”). Tonogold will, as a result of this initial investment, have a 17% equity interest in Mil-Ler with an option to increase its interest to 34% by investing a further $5 million within 6 months from the initial investment.

The price of the proposed placement represents a 23% discount to the last price traded at the close of business on November 4, 2013, being immediately prior to the commencement of pricing discussions.

The new issue of shares will be by way of units of 100,000 shares ($5,000 per unit) with a minimum subscription of 1 unit. Subject to the planned allocation for current shareholders described below, in the event of an oversubscription, the Company shall have the right (not the obligation) to scale back applications at is sole discretion, although priority will generally be given to applications received first.

The Company plans to offer each current shareholder a preferential allocation of shares, representing up to 30% of such shareholders total shares held at the close of business on Monday November 18, 2013 subject to confirmation of each participating shareholder’s being an “accredited investor” pursuant to SEC and in compliance with other applicable securities regulations. Participating shareholders will be required to complete the Subscription Agreement, Investor Questionnaire and other documents as will be detailed in the final offering document and return them to arrive no later than December 2, 2013. This priority allocation will not be affected in the event that a participating shareholder applies for more than their preferential allocation of shares.

The Company expects formal subscription documents to be completed shortly.

Tonogold’s CEO, Mark Ashley stated that he was very pleased with the response that the Company had received following it’s announcement on October 18th, 2013 and looks forward to working with RM Corporate Finance in further building the foundation for the Company’s significant growth aspirations.

RM Corporate will receive a fee of 7% of funds raised plus the issue of 2 million shares in Tonogold based on raising the $6 million.

A link to the Company’s announcement on October 18th 2013 and to a PowerPoint presentation relating to the Iron Ore project in Mexico is provided below for ease of reference.

Tonogold also wishes to advise investors that it has appointed Hamilton & Associates Law Group P.A. (Corporate Attorney) to assist the Company in its application to become Reporting Issuer under the Securities Exchange Act of 1934, as amended. Tonogold’s objective is to become fully reporting and quoted on the OTC Bulletin Board as soon as possible.

 

Announcement.

http://www.tonogold.com/s/NewsReleases.asp?ReportID=608105&_Type=News-Releases&_Title=Tonogold-Resources-Inc.-Secures-Option-On-Producing-Iron-Ore-Mining-Entity

October 18, 2013.

Tonogold Resources, Inc. Secures Option On Producing Iron Ore Mining Entity In Mexico

 

PowerPoint Presentation.

http://www.tonogold.com/i/pdf/Presentation_Iron_Ore_2013_10.pdf

Tonogold Resources, Inc. is a minerals exploration company based in La Jolla, California. For more information on the company visit their website www.tonogold.com.

 

Safe Harbor Statement.

This press release contains certain forward-looking information about Tonogold Resources, Inc. (“Tonogold”) which is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Words such as “expect(s),” “feel(s),” “believe(s),” “will,” “may,” “anticipate(s),” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of Tonogold Resources, Inc. that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include: our lack of operating revenue and earnings history, our need for additional capital to pursue our business strategy, some of our managers lack formal training in the mining business, the grade and quantity of minerals in our projects may not be economic, we do not have fee title to our properties, but derive our rights through leases and the Mining Law, changes to the Mining Law may increase the cost of doing business, we are a non-reporting company and as such do not make periodic filings with the Securities and Exchange Commission, we trade on the Pink Sheets and there can be no assurances that a liquid market will develop in our securities, mining is subject to extensive environmental regulations and can create substantial environmental liabilities, commodities have substantial price fluctuations, a drop in prices could adversely affect future profitability and capital raising efforts, and mining can be dangerous and present operational hazards for employees and contractors. Readers are cautioned not to place undue reliance on these forward-looking statements. Tonogold does not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Not an Offer to Purchase or Sell Securities. This press release is for informational purposes and is not an offer to sell or a solicitation of an offer to buy any securities in Tonogold Resources, Inc., and may not be relied upon in connection with the purchase or sale of any security. The Company shares planned to be offered, if offered, will only be available to parties who are “accredited investors” (as defined in Rule 501 promulgated pursuant to the Securities Act of 1933, as amended) and who are interested in investing in the Fund on their own behalf. Any offering or solicitation will be made only to qualified prospective investors pursuant to a confidential offering memorandum, and the subscription documents, all of which should be read in their entirety.

 

For further information please contact:

Mark Ashley, mjashley@tonogold.com

Jeff Janda, jeff@tonogold.com

Phone: +1 (858) 456-1273

 

RM Corporate Finance.

Guy T Le Page.

+61 (0)8 9488 0800

TONOGOLD RESOURCES, INC. SECURES OPTION ON PRODUCING IRON ORE MINING ENTITY IN MEXICO

La Jolla, California. October 18, 2013. Tonogold Resources, Inc. (OTC: TNGL) is pleased to announce that it has today entered into an exclusive option agreement with Mil-Ler Resources and Energy SA (“MIL-LER”) a private Mexican mining and exploration company to acquire up to 34% equity interest in MIL-LER in two tranches of $5 million each for a total investment of up to $10 million.

MIL-LER is currently owned by two groups, each having 50% ownership, the first being a small group of US investors led by Travis Miller who first acquired the land package and who has lived in Hermosillo for three years and manages the project, and the other 50% by two Mexican individuals who control a large Mexican construction company.

MIL-LER owns mineral rights over approximately 135 square miles (350 square kilometers) 40 kilometers north of Hermosillo (the capital of Sonora), Mexico. Exploration drilling over a small area of the total claims during 2011 confirmed the presence of iron ore mineralization. MIL-LER commenced a small scale operation in January 2013 and is currently mining ore (both hematite and magnetite) which is beneficiated via a simple two stage crushing and dry magnetic separation process producing approximately 15,000 tonnes of iron ore product which is transported by road to main port at Guaymas (180 kilometers from site) where the product is shipped and sold to China under an off-take agreement.

The final iron ore product containing approximately 59% iron, contains certain impurities (as a result of the simple processing method) and a fixed penalty of 18% is applied to the spot price by the Chinese buyer pursuant to the off-take agreement. MIL-LER is paid 95% once product has been loaded on the ship at Guaymas with the remaining 5% being paid on arrival in China. At the current spot price of iron ore, MIL-LER receives approximately $100 per tonne after penalties.

Total costs (including shipping) are estimated to be running at around US$60 per dry tonne of final product, which are internationally competitive, providing a US$40 per tonne of final product cash margin.

The processing facility is capable of producing at least 50,000 tonnes of final product per month. Additional mining equipment has been recently acquired by MIL-LER which is expected to arrive on site and be operational in the next few weeks. This will enable production to be doubled from the current levels, to around 30,000 tonnes of final product per month by early next year.

Significant cost benefits accrue to the project mainly from the low wage cost, which in Mexico is about $20,000 per person per annum. It is estimated that a saving of over $30 per tonne of final product is achieved compared to a similar operation in Australia (the world’s second largest producer of Iron ore). Shipping costs are about $20 per tonne higher than Australia due to the latter’s favorable proximity to China. Overall, net cost savings compensate for the higher product penalty.

MIL-LER produces power from diesel generators as adequate grid power isn’t available for the operations. However MIL-LER has secured access to a property some 20 kilometers from the mining site that has main grid power and a main rail line just 20 meters from the property boundary that currently rails concentrates from Arizona to the port of Guaymas. This property also has significant water. Detailed metallurgical test work and an economic/financial assessment will be required to confirm the feasibility of establishing an additional beneficiation facility to improve the quality of the final product. It is currently expected that the additional beneficiation process is likely to substantially increase the price received (by reducing the impurities) but is also expected to reduce costs as a result of railing the final product to the port of Guaymas compared to trucking.

Aero-Magnetic surveys flown by the government highlight significant magnetic anomalies over the company’s property which, although have yet to be drill tested, are coincidental with substantial iron ore outcropping.

Travis Miller, President of Mil-Ler said that “our objectives of significantly increasing our production from their current levels and improving our margins coupled with our debt free strategy highlighted the benefits of bringing in an industry partner that can not only provide capital but also offers the benefits of further strengthening our financial and mining experience and expertise”.

The agreement reached today between Tonogold and MIL-LER provides for the following:

• Tonogold has been granted an exclusive free 6 week option (the “Initial Option”) extendable (if necessary) at Tonogold’s election by a further 30 days (at a cost to Tonogold of $50,000) to subscribe for new shares in MIL-LER that would result in Tonogold having a 17% interest in MIL-LER by investing $5 million. Tonogold would nominate one director to MIL-LER’s board (which currently totals 4).
• In the event that Tonogold exercises the Initial Option, it will be granted (at a cost to Tonogold of $100,000) a second 6 month option (the “Second Option”) to subscribe for additional shares in MIL-LER such that if exercised would provide Tonogold with a 34% equity interest in MIL-LER on a diluted basis. To exercise the Second Option, Tonogold will invest a further $5 million into MIL-LER. Tonogold would nominate an additional director to MIL-LER’s board.
• As part of the Second Option, Tonogold granted MIL-LER has the right to have $1 million of the Second Option subscription satisfied by the issue of 20 million shares in Tonogold to MIL-LER.

All funds and/or shares provided under this agreement will go directly into MIL-LER (and not to its current shareholders). Funds received by MIL-LER from the Initial Option will be used to undertake a significant drilling program to test and prove up some priority targets already identified. Funds will also be assigned to commence detailed metallurgical test work, to be carried out in Australia (to include ore characterization, optimal grind size, gravity and magnetic separation).

Funds from the Second Option together with funds generated from current operations will be focused on upgrading the processing facilities, further exploration/evaluation and establishing new opportunities in the region.

Tonogold believes that the project has the potential to substantially increase production and increase margins to approximately $70 per tonne in the medium term.

An investment by Tonogold of $10 million for a 34% equity interest implies a value for MIL-LER of $29 million (which includes the $10 million cash to be invested) and therefore a value for the project of just $19 million. An investment in MIL-LER would result in Tonogold owning a strategic interest in a producing, debt free company with significant assets and substantial growth potential.

MIL-LER has made two shipments so far this year, with a third scheduled to leave port in the next few days.

MIL-LER acquired its mining fleet and process plant via its own equity and is debt free.

No formal NI 43-101 compliant reserves or resources have been calculated for the project at this stage.

A PowerPoint presentation on the project is available from Tonogold’s website which provides further information and data as it relates to this transaction, the project, its location and the iron ore industry in general.

Tonogold will be seeking to undertake a capital raising program immediately to raise approximately $6 million required in order to exercise the Initial Option and to provide additional working capital in order for Tonogold to assess other opportunities, which it continues to actively pursue. It is also Tonogold’s intention to become a fully reporting entity concurrent with the capital raising. Tonogold will make the details of the capital raising available to the market as soon as practical.

Tonogold Resources, Inc. is a minerals exploration company based in La Jolla, California. For more information on the company visit their website www.tonogold.com.

 

Safe Harbor Statement.

This press release contains certain forward-looking information about Tonogold Resources, Inc. (“Tonogold”) which is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Words such as “expect(s),” “feel(s),” “believe(s),” “will,” “may,” “anticipate(s),” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of Tonogold Resources, Inc. that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include: our lack of operating revenue and earnings history, our need for additional capital to pursue our business strategy, some of our managers lack formal training in the mining business, the grade and quantity of minerals in our projects may not be economic, we do not have fee title to our properties, but derive our rights through leases and the Mining Law, changes to the Mining Law may increase the cost of doing business, we are a non-reporting company and as such do not make periodic filings with the Securities and Exchange Commission, we trade on the Pink Sheets and there can be no assurances that a liquid market will develop in our securities, mining is subject to extensive environmental regulations and can create substantial environmental liabilities, gold, silver and other metals are commodities which have substantial price fluctuations, a drop in prices could adversely affect future profitability and capital raising efforts, and mining can be dangerous and present operational hazards for employees and contractors. Readers are cautioned not to place undue reliance on these forward-looking statements. Tonogold does not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

 

For further information please contact:

Mark Ashley, mark@tonogold.com

Jeff Janda, jeff@tonogold.com

Phone: (858) 456-1273

TONOGOLD RESOURCES, INC. ANNOUNCES ANNUAL SHAREHOLDER MEETING

La Jolla, California. August 23, 2013. Tonogold Resources, Inc. (PINK OTC: TNGL) announces the annual shareholder meeting will be held Friday, October 18, 2013 from 11:00 am to 1:00 pm at the Museum of Contemporary Art San Diego, Coast Room, located at 700 Prospect Street, La Jolla, California 92037.

Shareholders of Tonogold Resources can expect to receive the official notice of the meeting and a proxy statement by mail. The notices will be mailed to the address of record as of August 23, 2013. Please notify the corporate office if there has been a recent change of address.

The proxy statement can also be downloaded on the Company website at https://tonogold.com/en/investors/legal-notices/

Tonogold Resources, Inc. is a minerals exploration company based in La Jolla, California. For more information on the company visit their website www.tonogold.com.

 

Contact:

Mark Ashley, mark@tonogold.com

Jeff Janda, jeff@tonogold.com

Phone: (858) 456-1273

TONOGOLD RESOURCES, INC. CONFIRMS APPOINTMENT OF NEW CEO

Tonogold Resources, Inc. (OTC: TNGL) is pleased to announce that the formal appointment of Mark Ashley as CEO of the company, as contemplated in our announcement of April 3rd, 2013 has today been confirmed. This follows the completion of a capital raising which has generated $706,500 fromthe issue of 78.5 million new shares to a number of strategic sophisticated and accredited shareholders in Australia and the US.

The new shares were issued at a small discount to the last trading price prior to the announcement on April 3rd. These shares will have a 12 months trading restriction, which highlights the long-term investment strategy of these new investors.

The company is pleased to welcome these new cornerstone investors to the company and to Mr. Ashley as its new CEO.

Mr. Ashley said that he was excited about the potential that the Company’s significant land holding in Tonopah, Nevada holds — a region that boasts historic production of over 1.8 million ounces of gold and some 178 million ounces of silver.

Mr. Ashley added that Tonogold intends, in addition to advancing the potential of its current patents, to focus on developing corporate opportunities in the region and throughout Nevada in a bid to becoming a substantial profitable gold producer.

Mr. Ashley has over 30 years as a senior executive with a number of successful mining and exploration companies, having spent the last 20 years in Australia. Mr. Ashley stated the significant appreciation of the Australian dollar over the past four years from a low of 64 cents to the US$ in 2009 to its current parity, has had a significant negative impact of the profitability of Australian gold producers.

Mr. Ashley moved to the US a year ago, as he believed that the US mining industry offered significant opportunities for consolidation and operational development in the mining industry. Mr. Ashley stated that he believed that the Tonogold capital raising has helped initiate interest from Australian resource investors in recognizing the US resource sector as offering potentially superior investment returns in a resource rich and politically safe environment.

Tonogold believes that with Mr. Ashley’s significant experience and expertise in building significant resource groups mainly in Australia and the recognition and support from the international investment community, the Company is well positioned to take advantage of the numerous opportunities that are likely to arise from the predicted shake up and realignment of the global resource sector.

The capital raising was led by Australian based Pareto Capital as announced by the Company on May 2nd, 2013.Pareto Capital stated that they are very pleased to be working with Tonogold following the successful completion of the recent capital raising. We strongly support the strategy of newly appointed CEO, Mark Ashley and look forward to participating in this new, exciting chapter in the Company’s activities.

The 3.3 million 8-cent warrants to be issued to Mr. Ashley as provided in our April 3rd announcement and 3 million 1-cent warrants to be issued to Pareto Capital (as part of their fee for managing the capital raising) are both subject to receiving shareholder approval for an increase in the authorized capital of the company. In this regard, the Company expects to announce the date of its Annual Shareholders meeting in the next few weeks.

The funds raised from the capital raising will enable the settlement of the outstanding creditors and to provide working capital over the coming year to allow the assembling the significant geological and technical data the company owns with the objective of bringing a new industry partner to fund the advancement of the Company’s gold and silver projects at Tonopah, Nevada.

Note 1. The current directors have agreed that 25% of their unpaid salary as at December 31st 2102 which amounted to $165,000 (before tax) will be settled by the issue of 3.7 million new shares with 25% to be paid in 12 months time. The remaining 50% will be paid from the funds generated from the capital raising.

Note 2. It has been agreed that 50% of accrued interest liability of $21,934 as at December 31st, 2012 will be settled by the issue of shares.

Tonogold Resources, Inc. is a minerals exploration company based in La Jolla, California. For more information on the Company visit their website www.tonogold.com.

 

Safe Harbor Statement.

This press release contains certain forward-looking information about Tonogold Resources, Inc. (“Tonogold”) which is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Words such as “expect(s),” “feel(s),” “believe(s),” “will,” “may,” “anticipate(s),” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of Tonogold Resources, Inc. that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include: our lack of operating revenue and earnings history, our need for additional capital to pursue our business strategy, some of our managers lack formal training in the mining business, the grade and quantity of minerals in our projects may not be economic, we do not have fee title to our properties, but derive our rights through leases and the Mining Law, changes to the Mining Law may increase the cost of doing business, we are a non-reporting company and as such do not make periodic filings with the Securities and Exchange Commission, we trade on the Pink Sheets and there can be no assurances that a liquid market will develop in our securities, mining is subject to extensive environmental regulations and can create substantial environmental liabilities, gold and silver are commodities which have substantial price fluctuations, a drop in gold and/or silver prices could adversely affect future profitability and/or capital raising efforts, and mining can be dangerous and present operational hazards for employees and contractors. Readers are cautioned not to place undue reliance on these forward-looking statements. Tonogold does not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

 

Contact:

 

Mark Ashley, mark@tonogold.com

Jeff Janda, jeff@tonogold.com

858-456-1273

TONOGOLD RESOURCES, INC. ANNOUNCES AGREEMENT WITH PARETO CAPITAL

Tonogold Resources, Inc. (OTC: TNGL) is pleased to announce that it has signed an agreement with Pareto Capital Pty Ltd. (“Pareto”), a West Australian based boutique venture capital and investment firm specializing in raising capital for the micro-cap and junior mining sector.

Under the terms of the agreement, Pareto will serve as lead manager for a private capital raise and provide general corporate advice and services.

Pareto is a privately owned enterprise whose key executives have raised over $200 million for companies associated with Mr. Mark Ashley, Tonogold’s CEO elect. Further details of the capital raising and the formal appointment of Mr. Ashley will be announced in approximately two weeks.

For more information on Pareto Capital Pty Ltd. please visit their website www.paretocapital.com.au.

Tonogold Resources, Inc. is a minerals exploration company based in La Jolla, California. For more information on the Company visit their website www.tonogold.com.

 

Safe Harbor Statement.

This press release contains certain forward-looking information about Tonogold Resources, Inc. (“Tonogold”) which is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Words such as “expect(s),” “feel(s),” “believe(s),” “will,” “may,” “anticipate(s),” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of Tonogold Resources, Inc. that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include: our lack of operating revenue and earnings history, our need for additional capital to pursue our business strategy, some of our managers lack formal training in the mining business, the grade and quantity of minerals in our projects may not be economic, we do not have fee title to our properties, but derive our rights through leases and the Mining Law, changes to the Mining Law may increase the cost of doing business, we are a non-reporting company and as such do not make periodic filings with the Securities and Exchange Commission, we trade on the Pink Sheets and there can be no assurances that a liquid market will develop in our securities, mining is subject to extensive environmental regulations and can create substantial environmental liabilities, gold and silver are commodities which have substantial price fluctuations, a drop in gold and/or silver prices could adversely affect future profitability and/or capital raising efforts, and mining can be dangerous and present operational hazards for employees and contractors. Readers are cautioned not to place undue reliance on these forward-looking statements. Tonogold does not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

 

Contact:

 

Mark Ashley

Jeff Janda

858-456-1273

jeff@tonogold.com