GOLD HILL, Nev., Feb. 23, 2006 (PRIMEZONE) -- GoldSpring, Inc. (OTCBB:GSPG) announced today that it has entered into an agreement to sell its Canadian subsidiaries, Clear Hills Iron Ltd. and Peace River Energy Ltd. to CaNev Resources Corporation, a Nevada Corporation. The assets of the Canadian subsidiaries include 43 industrial (non-energy) mineral permits covering approximately 800 square miles in northern Alberta, Canada. GoldSpring acquired the Canadian mineral permits during the second quarter of 2004. GoldSpring did not disclose the details of the transaction, but the company's president and CEO, Rob Faber, said, "The structure of the sale will include cash up front with the balance to be paid through a net smelter return royalty on non-energy mineral production from the property." The sale is scheduled to close on March 15, 2006.
Commenting on the motivation for the sale, Faber said, "The Clear Hills Iron project was an early-stage project that would have required extensive capital to pursue. Since March 2005, we have been seeking to enter a joint venture to develop the project or to sell the project." The terms of the mineral permits required GoldSpring to invest a minimum of CDN$1 million in exploration on the property prior to May 2006 in order to retain ownership of the permits. Faber commented that, "The timing of the transaction will provide the company with needed cash, while allowing us to share in future production through a net smelter return royalty."
GoldSpring, Inc. is a North American precious metals mining company with an operating gold and silver mine in northern Nevada. The company was formed in mid-2003 and acquired the Plum Mine property in November 2003. In the company's relatively short history, it secured permits, built an infrastructure and brought the Plum project into production. During 2005, the company acquired additional properties around the Plum project in northern Nevada, expanding its footprint and creating opportunities for exploration. GoldSpring is an emerging company, looking to build on its success through the acquisition of other mineral properties in North America with reserves and exploration potential that can be efficiently put into near-term production. The company's objectives are to increase production, increase reserves through exploration and acquisitions, expand its footprint at the Plum mine, and maximize cash flow and return for its shareholders.
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