(Option for Mulgravian Ventures Ltd. to earn 51%)
The Five Star Gold property is located in the northwest area of Guyana and consists of fourteen (14) Medium Scale Prospecting Permits encompassing an area of approximately 13,000 acres near the town of Matthew's Ridge.
Terms of Option Agreement with Mulgravian Ventures Corporation
On November 4, 2009, Shoreham announced that the Company has signed a letter of intent with Mulgravian Ventures Corporation whereby Mulgravian may acquire a 51% working interest in Five Star-Case by investing US$2,000,000 in exploring and advancing the property within four years of TSX-V approval and completing a $210,000 private placement in Shoreham at above market price. The Company announced the completion of the private placement on January 8, 2010. Mulgravian must exercise the warrants issued as part of the private placement on each of the first and second anniversaries of TSX-V approval of the definitive option agreement.,and must exercise all of the warrants as a condition precedent to maintain their rights under the terms of the letter of intent. It is intended that the $420,000 proceeds from the exercise of all of the warrants will be utilized for expenditures directly related to the Guyana exploration properties. The initial placement of $210,000 may be used without specification by Shoreham management for general and administrative costs and exploration.
Mulgravian will be required to invest US$500,000 in qualified exploration expenditures within one year of TSX-V approval of the definitive option agreement and an additional US$500,000 per year in qualified exploration expenditures prior to the second, third and fourth anniversaries of TSX-V approval for a cumulative total of US$2,000,000 in qualified exploration expenditures. Upon completion of this program, Mulgravian will become the beneficial owner of 51% of the capitalized shares of the specific Guyanese holding company with Shoreham holding the remaining 49% of the shares. Upon exercise of the option, Mulgravian and Shoreham, as shareholders of the Guyanese holding company, shall form a management group and appoint a Board of Directors to operate and supervise the ongoing management of the Guyanese holding company.
Previous Operators and Status
The Property has been held and evaluated by Golden Star Resources Ltd. and HGB Ventures Ltd. The Property was recently held for three years by Gold Port Resources Ltd. without documented sampling or other work. The soil and auger geochemical targets in the Whana Package and the adjoining Reis and Yearwood Medium Scale Licenses represent the first priority targets in the SMH-Mulgravian-Guiana Shield Transaction. The corresponding geochemical targets in the Five Stars property are well defined extensions of these targets and will increase the potential for development of a major gold resource in this Project Area.
Mining Activity
Ten to fifteen groups of artisanal miners are working with permission from the proprietor with four and six inch monitors and crude gravity systems. There are no production records but the area has been active for many years. Current activity is stifled by deteriorating access roads which the Company will rehabilitate as part of its program. Examination of the alluvial work areas will be part of initial examinations, since these areas are generally the most accessible mineralized outcrops for sampling.
Target Status and Objective
Three phases of soil and MMI geochemistry by previous operators (Golden Star and HGB Ventures) show gold bearing zones with similar stratigraphic and structural controls as the adjoining targets on the Whana Packages. Combined with the Whana Licenses this package represents a strong assemblage of drill targets (to be refined with deep auger profiles and mapping) with a reasonable expectation of developing multi-million ounce gold resources.
Compilation of geology and geochemical responses Five Stars Property
- Road and access trail development in conjunction with work on the adjoining Whana and Black Banana Properties.
- Detailed deep auger (TRADO) profiles to refine drill target development, with backhoe trenching for structural control as conditions permit.
- Systematic diamond drilling to develop a large tonnage, low-grade gold targets as logical extensions.
- Shoreham will be building and repairing roads, trenching and TRADO drilling on the Five Star property to prepare for diamond drilling.
Airborne magnetic surveys and geochemical responses Whana Project
Area and Five Stars Property
