Eloro buys property from KWG in share exchange

2011-09-14 08:10 ET - News Release

See News Release (C-ELO) Eloro Resources Ltd (2)

Mr. Thomas Larsen of Eloro reports

ELORO TO ACQUIRE LOUVICOURT TOWNSHIP GOLD PROPERTY IN A SHARE EXCHANGE WITH A KWG RESOURCES SUBSIDIARY

KWG Resources Inc. has agreed to exchange all of the outstanding shares and warrants of its wholly owned subsidiary, 6949541 Canada Inc. (PQ-Gold), for shares and warrants of Eloro Resources Ltd. PQ-Gold holds 11 contiguous mineral claims in Louvicourt township, adjacent to Eloro's wholly owned Simkar gold property near Val d'Or, Quebec.

The Louvicourt Township property was previously explored by KWG for its gold potential and KWG retains a 1% NSR in the claims (which NSR increases to 2% if gold is valued at more than US$2000 per troy ounce and to 3% if gold is valued at more than US$3000 per troy ounce).

PQ-Gold's 3.2 million outstanding shares will be exchanged for 3.2 million Eloro Units. Each Eloro Unit will consist of one common share and one half of one common share purchase warrant. Each whole warrant will entitle the holder to purchase one Eloro common share at a price of $0.36 per share for a term of 18 months.

PQ-Gold also has issued and outstanding 3.2 million warrants each of which may be exercised to buy one common share from treasury for $1 at any time within 5 years. Under the takeover offer, Eloro will acquire all of these outstanding PQ-Gold warrants in exchange for the issue to KWG of an equal number of Eloro warrants having equivalent exercise terms. It is also a condition of closing that PQ-Gold will have working capital of $300,000 and that Eloro will have partly completed the private placements it recently announced on September 1, 2011. The transactions contemplated herein are subject to the formal completion of all documentation satisfactory to both parties and all required regulatory and board approval, including that of the TSX Venture Exchange.

"The Louvicourt Township property is a very strategically located asset," said Eloro President and C.E.O. Thomas Larsen. "With Eloro's adjacent Simkar property and the exploratory work underway at that project, it is a highly attractive rationalization opportunity. We are very committed to advancing both quality assets, which benefit from being located in one of the world's premier gold camps."