September 26, 2011 – Vancouver, Canada. Next Gen Metals Inc. (TSX.V:N, OTCQX: NXTTF, FSE: M5B) (“Next Gen” or the “Company”) is pleased to announce that the Company has today delivered a notice of option commencement (“Option Commencement”) as required under the letter agreement (“LA”) with Pacific North West Capital Corp. (“PFN”) pursuant to which Next Gen will acquire a 60% option interest (“Option Interest”) in the Destiny Gold Project, which Option Interest was in turn acquired by PFN under an option agreement with Alto Ventures Ltd. (“Alto”) (“Initial Option”).
ABOUT DESTINY GOLD PROJECT
The Destiny Gold Project has a National Instrument 43-101, Standards of Disclosure for Mineral Projects (“NI43-101”) compliant mineral resource with approximately 364,000 ounces gold “indicated” and 247,000 ounces gold “inferred” (see press release dated 07 March 2011). By acquiring a project with a significant gold resource identified, and with tremendous exploration potential for further increasing the resource, Next Gen is well-positioned to take advantage of a rising gold market and investor interest. The project has a strong history of funding with a multi-phase exploration program currently underway (see press release dated 19 July 2011). A fall and winter drill program, to expand the known resource, is scheduled to begin in November 2011.
The Destiny Gold Project is located adjacent to Next Gen’s Fate Gold Project in the Abitibi-Témiscamingue region of Québec, which is a highly favourable mining jurisdiction. Next Gen will benefit from historical money and time spent by both Alto and PFN. Alto Ventures is a very experienced explorer and is the operator for the Destiny Gold Project.
TERMS OF LETTER AGREEMENT
Under the terms of the LA, PFN has granted to Next Gen an irrevocable right and option to acquire all right, title and interest of PFN in and to the Option Interest in the Destiny Gold Project, for an aggregate purchase price of (i) a total of $675,000 in cash; (ii) 15,000,000 Next Gen common shares (“Shares”); and (iii) 4,000,000 Next Gen share purchase warrants (“Warrants”) exercisable into 4,000,000 common shares of Next Gen at varying prices for four years from the date of issuance; all of which is due as follows:
Cash: Next Gen paid $50,000 to PFN on signing the LA and will make additional cash payments to PFN in tranches of: (i) $75,000 on or before the first anniversary of the LA; (ii) $200,000 on or before the second anniversary of the LA; and (iii) $350,000 on or before the third anniversary of the LA.
Next Gen Shares: Of the 15,000,000 Shares of Next Gen issuable in tranches to PFN as fully paid and non-assessable common shares: (i) 4,550,000 Shares were issued to PFN today with the notice of Option Commencement and are subject to regulatory hold periods until January 27, 2012; (ii) 5,225,000 Shares are issuable on or before the first anniversary of the LA; and (iii) 5,225,000 Shares are issuable on or before the second anniversary of the LA.
Warrants: The 4,000,000 Warrants, were issued to PFN today with the notice of Option Commencement and are exercisable until September 26, 2015, as follows: (i) 1,000,000 Warrants are exercisable at $0.25 per share; (ii) 1,000,000 Warrants are exercisable at $0.30 per share; (iii) 1,000,000 Warrants are exercisable at $0.35 per share; and (iv) 1,000,000 Warrants are exercisable at $0.50 per share.
The Warrants and any shares exercisable under the Warrants are subject to regulatory hold periods until January 27, 2012.
In addition to the cash, Shares and Warrants payable by Next Gen, Next Gen shall also be responsible for all remaining cash payments and exploration expenditures due to be paid or incurred, as the case may be, under the Initial Option, along with any costs and expenditures associated with any resultant joint venture that arises between Next Gen and Alto. PFN will continue to be responsible for issuances of common shares to Alto under the Initial Option until the date of exercise of the Initial Option and the transfer and registration of the Option Interest from PFN to Next Gen in accordance with the terms of the LA.
Under the terms of the Initial Option, PFN would earn a 60% interest in the Destiny Gold Project by paying to Alto $200,000 in cash (of which $50,000 has been paid); issuing to Alto an aggregate of 250,000 common shares of PFN (of which 75,000 common shares have been issued); and incurring an aggregate of $3,500,000 in exploration expenditures over a four-year period (of which $1,557,000 has been incurred). Subsequent to the vesting of its Option Interest, PFN would form a joint venture with Alto to further develop the Destiny Gold Project. Certain claims comprising the property are subject to underlying net smelter return royalties ranging from 1% to 3.5%, with varying buy-back provisions.
The LA has been filed by Next Gen on SEDAR and may be accessed at www.sedar.com.
Qualified Person Statement
This news release has been reviewed and approved for technical content by Ali Hassan Alizadeh M.Sc. P.Geo, a qualified person under the provisions of NI43-101.
About Pacific North West Capital Corp
Pacific North West Capital Corp. is a mineral exploration company whose corporate philosophy is to be a project generator, explorer and project operator with the objective of option / joint venturing its projects through to production. In January 2011, PFN successfully negotiated the 100% acquisition of the River Valley PGM Project from Anglo Platinum Limited, making Anglo Platinum the largest shareholder of PFN holding approximately 9% of the Company (as of July 2011). In special situations, like PFN’s 100% owned River Valley PGM Project, PFN is prepared to fund the project through to feasibility and into production. The River Valley PGM Project is one of North America’s newest and largest primary platinum group metals (PGM) deposits. The project has excellent infrastructure support and is located only 60 miles (100 km) from Sudbury, Ontario, one of Canada’s largest mining centres with two large mineral processing facilities that have available capacity for production.
Pacific North West Capital Corp. is an International Metals Group Company.
About Next Gen Metals Inc.
Next Gen is a mineral exploration company whose current focus is on silver, gold and base metals projects in North America. The Company has acquired a 60% option interest (TSX.V: ALT) on the Destiny Gold Project (600,000 oz Gold). In addition, Next Gen is presently advancing the Silver Chalice Project, located in Alaska, and the Fate Gold Project adjacent to the Destiny Gold Project, both of which are located in the Abitibi Greenstone Belt of Northwest Québec, one of the most famous gold and base metals regions in the world. Next Gen continues to aggressively negotiate for additional advanced-stage silver, gold and base metal projects on an international scale.
Next Gen (www.nextgenmetalsinc.com) is the newest company to join the International Metals Group (“IMG”) (www.internationalmetalsgroup.com). The Board of Directors is comprised in part with directors from other companies within the IMG who, along with management, have a combined 150 years or more of experience in all aspects of managing public companies related to the resource industry.