Golden Tag Resources Gives ECU Silver Mining Inc. Demand Notice to Cease Unauthorized Removal of Stockpile Material on the San Diego Joint Venture Property
MONTREAL, QUEBEC, Aug 13, 2009 (MARKETWIRE via COMTEX News Network) --
Golden Tag Resources Ltd. (TSX VENTURE: GOG) ("Golden Tag") has today presented a formal notice to ECU Silver Mining Inc. ("ECU") demanding the immediate cessation of the removal of stockpile material on the San Diego Property. Golden Tag has recently learned that ECU commenced unauthorized removal of surface stockpiles on the property at a daily rate of approximately 250 tonnes per day in clear contravention and breach of the ECU and Golden Tag joint venture agreement (the"JVA"). Removal of these stockpiles and transport of the material is continuing on a daily basis with a fleet of seven trucks. The material is being transported to the nearby processing facility of ECU. There are at least 40,000 tonnes of mineralized material grading 1% Lead, 1% Zinc and 100 grams Silver per ton on the property. The stockpiles represent Joint Venture Assets which can not be mined or processed without the authorization and approval of the Joint Venture committee. Such authorization and approval has not been requested or approved.
ECU, the designated operator of the San Diego joint venture has also failed to remedy prior fundamental breaches of the option and JVA, signed on November 2, 2005 in respect of the San Diego property (see press release: June 23rd 2009). The silver zinc rich property is located in the Velardena Mining District, Municipality of Cuencame, Durango State, Mexico (the "Property"). Golden Tag's counsel in a letter dated March 20, 2009 notified ECU of these breaches and Golden Tag subsequently received assurances that the breaches would be rectified within the requested 30 day period. Despite several follow-ups, the breaches have not been remedied. Golden Tag is fully vested in a 50% Property interest under the JVA.
Among prior contract breaches of ECU which Golden Tag believes will be substantiated at arbitration are that ECU:
(A) Allowed a third party charge against the Property contrary to the JVA.
(B) Invoiced Golden Tag for joint-venture expenses but did not remit the funds to pay joint venture suppliers on a timely basis, some suppliers still being unpaid.
Copyright Failed to timely contribute its equivalent pro rata share of funding to the joint venture.
(D) Failed to follow proper procedures and timely financial reporting.
Due to these significant breaches, Golden Tag plans to seek the right to assume operatorship of the Property, dilution of the interest of ECU and/or compensatory damages and other relief.
