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Carlin To Spinout Yukon JV Properties, Stock Up

2/27/2012 1:07 PM ET

Carlin Gold Corp. (CGD.V: Quote) Monday announced the signing of a Letter of Intent among Carlin, Constantine Metal Resources and Urban Select Capital Corporation (CH.V: Quote), to spin-out the Carlin-Constantine Yukon joint venture assets into a subsidiary of Urban Select.

The Carlin-Constantine Yukon joint venture is a 50/50 joint venture which currently controls approximately 4,300 claims (90,000 hectares) in the Selwyn Basin of southeastern Yukon.

Carlin said the joint venture completed a very successful initial field program in 2011 that resulted in the identification of promising gold geochemical anomalies in prospective geological terrain on several properties.

Surrey, Canada-based Carlin said the spin-out would consolidate the joint venture ownership of the Yukon Properties into one company and provide funding to advance the 2012 exploration program, which would allow Carlin to focus its efforts on its Nevada assets. The company's primary focus is on its Cortez Summit property which consists of 142 claims located on the Cortez Trend in Nevada.

Under the terms of the LOI, Carlin will receive C$500,000 in cash and approximately 14.2 million shares in the subsidiary of Urban Select, as well as future share payments as and when mineral resources are defined on the Yukon Properties.

Urban Select is a global investment management, financial advisory and private equity firm focused on investing growth capital into private and public companies in a broad range of sectors including renewable energy, natural resources, chemicals, agriculture and consumer retail services.

The transaction is subject to a number of conditions, including completion of a C$4,000,000 subscription receipt financing by the subsidiary of Urban Select, satisfactory due diligence, preparation of a National Instrument 43-101 compliant technical report on one of the properties comprising the Yukon Properties, Carlin and Constantine Board of Directors approval of the final structure and the terms of a definitive agreement and other regulatory approvals including the TSX Venture Exchange.

Carlin's anticipated pro forma ownership of the new company will be 28.7 percent, with an estimated market value of C$3.5 million. Carlin will have Board representation and provide technical advisory services.

Upon completion of the Acquisition and financing, it is anticipated that the ownership of the Urban Select subsidiary will be as follows: Carlin as to 28.7%; Constantine 28.7%; Urban Select as to 3.2%; Urban Select's current shareholders as to 2.9%; and 36.5% to investors in the subsidiary's public financings.

As per the LOI, the Urban Select subsidiary would acquire 100 percent of the Vendors' interest in the Yukon Properties no later than April 15, in consideration for the issuance of 28,333,333 common shares of the subsidiar and payment of C$1,000,000 to the Vendors.

CGD.V is currently trading at C$0.1150, up C$0.02 or 21.05%, on the TSX Venture Exchange. Over the past year, the stock traded in a range of C$0.07 - C$0.30.

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by RTT Staff Writer

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