TORONTO, Jan. 8, 2003 (PRIMEZONE) -- Condor Gold Corp. (Pink Sheets:CDRGF) (CUB:FGRL) (the "Corporation") announces that on January 7, 2003 it arranged for senior secured debt financing from Treelawn Investment Corp. ("Treelawn"), in the gross aggregate amount of CDN $1,500,000.00 (the "Loan") to be advanced in three tranches commencing January 7 and ending February 15, 2003 and will is repayable out of production over a term of two years. The proceeds of the financing are to be utilized (i) in the completion of a drilling program on the Corporation's Young-Shannon Property located in the Chester Township, southwest of Gogama, Ontario; (ii) to commence production from surface stockpile and open pit operations of the Corporation; and (iii) for general working capital and contingency purposes.
As partial consideration for the Loan, the Corporation issued to Treelawn 20,000,000 two-year common share purchase warrants exercisable at CDN. $0.10 per common share and 20,000,000 three-year common share purchase warrants exercisable at CDN. $0.20 per common share. As a result of such transaction, Treelawn beneficially owns and has control over securities convertible into voting shares of the Corporation which, if fully exercised, would result in Treelawn holding approximately 39% of the current issued and outstanding voting securities of the Corporation. Subject to applicable securities legislation, Treelawn may, depending on market and other conditions, increase or decrease its beneficial ownership, control or direction over the common shares or other securities of the Corporation. As compensation for acting as a finder in relation to arranging the Loan, an outstanding gold option of the Corporation was partially assigned to and exercised by Dharmony Strategies Limited ("Dharmony") resulting in the issuance of 4,500,000 common shares of the Corporation to Dharmony for no additional consideration. Conditional on the Loan first being repaid, Treelawn was also granted an option to enter into, upon the payment of CDN. $100,000.00 to the Corporation to exercise such option, a royalty agreement with the Corporation entitling Treelawn to royalties from the Corporation of (i) CDN.$100.00 per ounce of gold produced from the surface stockpile until 70,000 ounces of gold are produced (less the amount of production in the process of repaying the Loan) and (ii) CDN.$50.00 per ounce of gold produced from the ramp of the Murgold Property located in the Chester Township to a maximum of 68,000 ounces of gold. In addition, Treelawn has been granted nomination rights in relation to the board of directors for the 2003 annual meeting of shareholders of the Corporation.
CONDOR GOLD CORP.
The Corporation is a public company incorporated under the laws of Ontario, which is quoted on the Pink Sheets under the quotation symbol: CDRGF. The Corporation, through its subsidiaries, owns or controls interests in gold properties in the townships of Chester, Benneweis and Yeo, with a total strike length of eighteen miles (collectively, the "Northville Properties"). The Northville Properties are located adjacent to a paved main highway just south of the town of Gogama, Ontario, or about 200 kilometers north of Sudbury. For more information on the Northville Properties, see the Corporation's press release dated October 10, 2002, and the Qualifying Report on the Chester Township Property for Northville dated June 8, 2002, all of which can be found at www.sedar.com. Through its subsidiary, Condor Diamond Corp., a corporation involved in diamond exploration, the Corporation controls approximately 125,000 acres of mining claims in the James Bay lowlands of northern Ontario.
For further information, contact:
Alexander Stewart: Chairman and Chief Executive Officer,
Condor Gold Corp.
Telephone: (416) 368-6161
Facsimile: (416) 368-7805
Address: 390 Bay Street, Suite 1620
Toronto, Ontario
M5H 2Y2
This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities of the Corporation in any jurisdiction. The purchase warrants and the underlying common shares described above were not registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent an applicable exemption from the registration requirement.