Golden Reign Signs US$15 Million Gold Streaming Arrangement Letter Of Intent

Golden Reign Resources Ltd. (the "Company" or "Golden Reign")(TSX-V: GRR) is pleased to announce that it has entered into a binding Letter of Intent ("LOI") with Marlin Gold Mining Ltd. ("Marlin")(TSX-V: MLN) for a US$15.0 million gold streaming arrangement at its San Albino Gold Deposit and surrounding area, located in Nueva Segovia, Nicaragua.

Stream Transaction Details

  • - Marlin will provide US$15.0 million (the "Purchase Price") to be used for construction and development at the San Albino Gold Deposit and surrounding area. The designated area comprises a total of 3.5 square kilometres

    - Marlin's wholly-owned subsidiary, Sailfish, will be entitled to purchase 40% of gold production at US$700 per troy ounce1 until an amount of US$19.6 million2 is recovered by Sailfish, and 20% of gold production at US$700 per troy ounce3 thereafter

    - Prior to commercial production Sailfish will be entitled to receive an 8% semi-annual coupon payment on the Purchase Price

  1. 1Subject to a 1% per year cost escalation beginning three years from commercial production.

  2. 2Golden Reign will be required to make minimum monthly payments of US$282,800 per month when commercial production commences.

  3. 3Subject to a 1% per year cost escalation beginning three years from commercial production, plus 50% of the price differential above US$1,200 per troy ounce subject to certain adjustments.

"We are extremely pleased to announce the signing of the LOI with Marlin. Marlin shares our vision for the continued expedited advancement of our high-grade San Albino gold asset in Nicaragua. The San Albino Deposit has been the Company's priority focus for the past four years. Covering a 3.5 square kilometre area within the Company's highly prospective 138 square kilometre landholdings, it will be the first target moved towards production. Once operations are successfully established, the Company anticipates that cash flows will enable it to progress exploration targets at Las Conchitas, Murra and the El Jicaro Concession, with the strategy of adding significant value to the Company while minimizing dilution to our shareholders. We look forward and are excited to be transitioning from an explorer to producer", commented Kim Evans, President and Chief Executive Officer of Golden Reign.

Summary of Gold Stream Arrangement

For a purchase price of US$15.0 million Marlin's wholly-owned subsidiary, Sailfish Royalty Corp. ("Sailfish") will be entitled to purchase 40% of gold production from the San Albino Gold Deposit and surrounding area, comprising a total 3.5 square kilometres, at US$700 per troy ounce1 until Sailfish recovers US$19.6 million2. Thereafter, Sailfish will be entitled to purchase 20% of gold production at US$700 per troy ounce3. Prior to commercial production, Sailfish will be entitled to receive an 8% semi-annual coupon payment on the purchase price from Golden Reign.

Closing of the transaction is subject to the completion of due diligence, including geological, geotechnical and metallurgical review, by Marlin and the execution of definitive agreements.

Sonoran Resources, LLC ("Sonoran") will be the nominated engineering, procurement and construction management ("EPCM") firm that will be responsible for permitting and building the San Albino project. Marlin and Golden Reign shall jointly oversee Sonoran's activities. Sonoran has the technical expertise and significant experience in building small scale assets in the Americas cheaply and efficiently. Additionally, Sonoran is one of the few engineering firms that have senior engineers with direct operating experience in Nicaragua.

Upon closing of the transaction, John Brownlie (CEO and Director of Marlin) and Akiba Leisman (Director of Marlin) will each be appointed to the Board of Directors of Golden Reign.

Marlin $3.2 Million Equity Investment

Concurrent with the closing of the transaction, Marlin will take a 19.9% interest in Golden Reign by purchasing 21.3 million common shares for approximately $3.2 million, subject to regulatory approvals.

About Marlin

Marlin Gold Mining Ltd., a publicly listed company on the TSX Venture Exchange, has significant experience at a board and management level in developing profitable gold mines in Mexico and throughout the Americas. Production at its La Trinidad property, an open-pit heap-leach gold project located in Sinaloa, Mexico, is expected to commence within a few days.

Sailfish is a newly created wholly-owned subsidiary of Marlin to be domiciled in the British Virgin Islands. It is anticipated that Sailfish's shares will eventually be distributed to Marlin shareholders, with Sailfish becoming a separate publicly traded entity. Sailfish will initially be populated with a gold stream entitling it to purchase 25% of the gold production from La Trinidad over the next 40 years. Golden Reign's San Albino project will be Sailfish's second gold streaming asset.

Funds managed by Wexford Capital LP are the majority shareholders of Marlin.

On behalf of the Board,

"Kim Evans"

Kim Evans, CGA

President & CEO

For additional information please visit our website at and SEDAR

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Forward-Looking Statements: Some of the statements contained herein may be forward-looking statements which involve known and unknown risks and uncertainties. Such forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking statements, including, without limitation, risks and uncertainties relating to political risks involving the Company's exploration and development of mineral properties interests, the inherent uncertainty of cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations, the inability or failure to obtain adequate financing on a timely basis and other risks and uncertainties. Such information contained herein represents management's best judgment as of the date hereof, based on information currently available.

Release ID: 34423