JOINT NEWS RELEASE
ECUADORIAN MINERALS CORPORATION
and
BEMA GOLD CORPORATION
November 1, 1999
Trading: TSE.EMC
ECUADORIAN COMMENCES DRILLING AT VETASPATA, PERU
VANCOUVER — Bema Gold Corporation ("Bema") and Ecuadorian Minerals Corporation ("EMC") are pleased to announce that the two companies have formed a strategic alliance to advance EMC's exploration for high grade gold-silver deposits in Ecuador and Peru.
As the first step in establishing the strategic alliance, Bema will subscribe for 3.8 million units of EMC at a price of C$1.33 per unit for a total consideration of C$5.05 million. Each unit will consist of one common share and one-half of a common share purchase warrant. One common share purchase warrant will entitle Bema to purchase one EMC common share at $2.00 for two years. Following completion of this investment and for a period of three years Bema will have the right to nominate one director to EMC's board of directors and a first right of refusal on any joint venture or other disposition of any of EMC's properties and on any EMC financings. Bema will issue to EMC 3.28 million common shares as consideration.
The transaction remains subject to regulatory approvals and approval of the respective Board of Directors. EMC views the Bema common shares that it will receive upon completion of this transaction as an investment and has no near-term plans to dispose of such shares. If EMC elects to sell all or part of the Bema shares, EMC will coordinate the disposition of such shares with Bema. The resulting proceeds will be added to working capital and used primarily to fund EMC's exploration program on its principal mineral properties in Ecuador and Peru and for new acquisitions. Bema's subscription for EMC shares is for long-term investment purposes and will result in an ownership of EMC of 7.0% on an issued and outstanding basis and 9.1% on a fully diluted basis.
EMC is a Toronto Stock Exchange listed company with, among its portfolio of properties, an exciting gold-silver exploration property located in Ecuador (Beroen) on which EMC has completed a first phase diamond drill program and a high grade gold property in Peru (Vetaspata) where EMC has recently commenced a diamond drill program.
The Beroen Project in south central Ecuador hosts an extensive, low sulfidation precious metal epithermal system with a surface expression of mineralization over an approximate 4 km x 1 km area with a vertical extent spanning about 1,000 meters. EMC's diamond drill program, which consisted of 21 holes totaling about 2,000 meters, tested only a small portion of the property and confirmed that the surface mineralization continued to depth. In a September 1, 1999 press release, EMC calculated an internal preliminary resource estimate based on the drill program and previous work of approximately 1.6 million ounces of gold and 13 million ounces of silver based on 9.4 million tonnes grading 5.3 grams per tonne of gold and 43 grams per tonne of silver. Mineralizaton remains open in several directions. Prior to the end of the year, EMC intends to complete two underground adits to collect additional geological, sampling and metallurgical data and will also carry out a CSAMT geophysical survey, a technique successfully used at Meridian Gold's geologically similar El Peñon deposit in Chile. A second phase of drilling (approximately 3,000 meters) is expected to commence in early 2000.
At the Vetaspata property in south eastern Peru, EMC has reported 87 rock panel samples with results averaging 17 grams per tonne of gold from a series of flat-lying mineralized sedimentary horizons or "mantos". Two principal underground workings averaged 54 meters at 18 grams per tonne of gold and 32 meters at 40 grams per tonne of gold (both uncut values). EMC recently commenced a 1,500 meter diamond drill program comprising of 18 drill holes which should be completed by the end of November or early December with results available shortly thereafter.
In addition to Beroen and Vetaspata, EMC has other properties in Ecuador, including the Gaby gold porphyry deposit. The Gaby deposit, on which independent prefeasibility studies have been completed, contains a preliminary reserve estimate of 107 million tonnes grading approximately 0.9 grams per tonne gold or 3 million ounces of gold. Currently the project is on hold pending higher gold prices.
The securities which may be issued pursuant to this transaction have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the U.S. or to a U.S. person in the absence of such registration or an exemption therefrom.
Bema Gold Corporation produces gold in Chile, and explores for gold in Canada, Chile, Russia, the United States and Venezuela. The common shares of Bema are listed for trading in Canada on The Toronto Stock Exchange and the Vancouver Stock Exchange and in the United States on the American Stock Exchange under the symbol "BGO". Ecuadorian Minerals Corporation is an exploration company and trades on The Toronto Stock Exchange under the symbol "EMC".
Stephen J. Kay, President and CEO,
Ecuadorian Minerals Corporation
Clive T. Johnson, Chairman, President and CEO,
Bema Gold Corporation
The Toronto Stock Exchange neither approves nor disapproves the information contained in this News Release.
For additional information, contact Linda North at Tel: (480) 483-9932 or Fax: (480) 483-9926.