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Gold Bullion Development Corp
Symbol GBB
Shares Issued 257,606,874
Close 2014-07-11 C$ 0.065
Market Cap C$ 16,744,447
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Gold Bullion to process ore at Iamgold's Westwood mill

2014-07-14 10:13 ET - News Release

Also News Release (C-IMG) Iamgold Corp

Mr. Frank Basa reports

GOLD BULLION ANNOUNCES SIGNING OF CUSTOM MILLING AGREEMENT WITH IAMGOLD A?? WESTWOOD MILL AND THE FILING OF ITS REQUEST FOR CERTIFICATE OF AUTHORIZATION

Gold Bullion Development Corp. has signed a custom milling agreement with Iamgold Corp. to process ore from the Granada gold property at its Westwood mill facilities. The officers of both companies have approved this agreement.

This agreement is a win-win situation for both companies where Gold Bullion will be able to minimize its initial capital investment and Iamgold will be able to utilize some of the excess mill capacity at Westwood, which is expected to reduce its overall processing costs.

The signing of this agreement is a significant milestone for the company and its shareholders as an efficient, direct, well-defined path to commercial gold production using Granada ore via implementation of the rolling start concept.

The agreement provides for and delineates the terms as follows:

  • Receipt of Gold Bullion ore from the Granada project to be processed in 50,000-to-70,000-tonne batches three times per calendar year at the Westwood site; annual target set at 192,000 tonnes; agreement anticipates that gold dore bars to be poured at the Iamgold mill, then transported by secure service to the Royal Canadian Mint for refining, with the finished product then sold as bullion to Scotia Mocatta, a division of Scotiabank Global Banking and Markets (Bank of Nova Scotia);
  • An initial three-year term with access to additional milling years subject to capex investment in the mill by Gold Bullion;
  • Contract commencement subject to the following:
    • Gold Bullion obtaining its certificate of authorization from the proper Quebec authorities for open-pit mining operations at Granada;
    • Iamgold obtaining its certificate of authorization from the proper Quebec authorities for the processing of Gold Bullion's ore at its Westwood site;
    • Certain capex and opex deposit payments prepaid by Gold Bullion due when both certificates of authorization have been granted;
    • The Gold Bullion operations team first goal to ship a trial-milling batch of 30,000 tonnes for milling in October, 2014, prior to winter freeze-up; subsequent milling to continue in April, 2015.

The gold produced will be sold at Royal Canadian Mint spot pricing in place at the time of delivery. The estimated time frames from shipping ore to cash in the Gold Bullion account could be shortened if Gold Bullion determines the best option is to sell the unrefined gold dore bars. Based on current information, the estimated time period for funds being deposited in Gold Bullion's account after the ore leaves the Granada property is one month.

Gold Bullion also announces the certificate of authorization request was formally submitted to the appropriate Quebec authorities on June 20, 2014. It is anticipated the certificate will be awarded by mid to late September, 2014.

Frank J. Basa, president and chief executive officer, said: "As we advance toward gold production the company begins the transition into an explorer producer. This is a huge positive for the company since anticipated cash flow from the rolling start will give us greater control over our ability to expand the resource and efficiently increase gold production as opportunities to do so present themselves."

Qualified person

Claude Duplessis, PEng, consultant for SGS, is responsible for validating the information described herein and has reviewed and approved the contents of this news release as a qualified person independent of Gold Bullion within the meaning of National Instrument 43-101 regulations.

We seek Safe Harbor.

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