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General Metals announces transaction that will generate $2.350 million in new funding

Monday, Feb 04, 2013

RENO, Nev., Jan. 31, 2013 /PRNewswire/ -- General Metals Corporation (OTCQB: GNMT) (www.nevada-goldmine.com) announced today that it has entered into a Letter of Intent with Open Gold Corp, a Canadian junior mining company listed on the TSX Venture Exchange, to raise capital and provide better access for future capital needs.   Per the terms of the Letter of Intent, $2.350 million will be raised to advance the development work on the General Metals Independence gold and silver mining project located near Battle Mountain, Nevada, initiate exploration of Open Gold's Mitchell Project and provide working capital.

The transaction is subject to completion of due diligence by both General Metals and Open Gold and the execution of a definitive agreement between the two companies.  Under the terms of the proposed transaction, Open Gold will issue shares of its common stock to General Metals so that General Metals and its shareholders will own 64% of Open Gold's issued and outstanding shares including the shares issued to raise the capital.   After the close of the transaction, the shares will be distributed to the General Metal's shareholders of record after all regulatory requirements and registrations are completed. In exchange, General Metals will transfer its interest in the Independence gold and silver mining Project to Open Gold.

Following the close of the transaction, the new board of Open Gold will consist of two Directors appointed by General Metals, two Directors appointed by Open Gold and a fifth independent director who is acceptable to both companies. The transaction will close once all of the conditions of the definitive agreement have been met. The most critical of these is that the $2.350 million dollar financing is closed and the money is in escrow.

Commenting on the transaction, Daniel J. Forbush, President and CEO of General Metals, stated: "I am very pleased to have finally been able to raise the money we have needed to advance the Independence Project. The most satisfying aspect of the transaction is that it proves definitively that the market is undervaluing General Metals. As we approach the closing date we should see more of the undervaluation being reflected in the market. As a result of this transaction, General Metals' stockholders will own the majority interest in Open Gold with a much larger combined asset base consisting of the Independence Project, Open Gold's Mitchell Project and $2.35 million in new capital with which to advance both projects."

"As shareholders should see from the structure of the Board, current GNMT management will play a significant role in the future development and commercialization of the assets of Open Gold," continued Forbush.

Approximately $2 million of the new capital will be used to improve and increase the Independence Project's resource base, identify drill site placements to increase the size and quality of the gold and silver resource in the initial pit area, make significant progress towards production, demonstrate additional gold and silver mineralization on other areas of the property that are unexplored or underexplored and provide general working capital.

"Because we believe the Independence Project has tremendous upside potential that will significantly enhance the value of the company, the priority is completing additional geological, metallurgical and economic evaluations of the property," said Bryson Goodwin, President and CEO of Open Gold. "By the time we're done, we anticipate the Independence Project will have expanded the resource and be much further down the road to production"

About General Metals CorporationGeneral Metals Corporation

(www.nevada-goldmine.com) is an aggressive junior mining exploration and development company, based in Reno, Nevada. The company is actively pursuing the re-opening of its Independence gold and silver mining project strategically located in the prolific Battle Mountain Mining District of Nevada.

Cautionary Note to U.S. Investors - The U.S. Securities and Exchange Commission permits U. S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms in this presentation, such as "measured", "indicated", and "inferred" "resources", which the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. investors are urged to consider closely the disclosure in our form 10-K which may be secured from us or the SEC website at: http://www.sec.gov/edgar.html.

Source: General Metals Corporation 

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