SGA Samco Gold Ltd

Samco Gold Limited (TSX VENTURE:SGA) ("Samco Gold" or the "Company") announces
that it has entered into a participation and option agreement (the
"Participation Agreement") with Ricardo Auriemma (the "Grantor"), a director of
the Company, under which the Company may acquire the sole and exclusive right to
participate in any benefits arising from enforcement of an Argentinean court
judgment relating to the breach of an agreement between the Grantor and Northern
Orion Resources Inc. (since acquired by Yamana Gold Inc. and renamed 0805346
B.C. Ltd.) ("Northern Orion").


HIGHLIGHTS



--  The Participation Agreement grants Samco Gold the exclusive right to
    participate in the proceeds arising out of the regional alliance
    agreement entered into between the Grantor and Northern Orion; 
    
--  Funds from the Participation Agreement will allow the Company to fund
    further development of its gold and silver assets in Argentina,
    including the core EDM and Corina properties, without equity dilution to
    shareholders; 
    
--  The matter between the Grantor and Northern Orion was determined by the
    Argentinean Commercial Court of Appeals on May 22nd, 2013. An
    extraordinary proceeding filed by Northern Orion seeking referral to the
    Argentinean Supreme Court of Justice filed on June 12th, 2013 was
    rejected by the Commercial Court of Appeals on December 11th, 2013; 
    
--  Pursuant to the decision, the Grantor's interest has been determined to
    be a sum equal to 15% of the proceeds received by and accruing to
    Northern Orion from its interest in the Bajo de la Alumbrera mine
    ("Alumbrera"); 
    
--  The quantum of award is to be determined by an expert arbitrator
    commencing from the date of Northern Orion's acquisition of its interest
    in Alumbrera until the anticipated end of the mine's life; 
    
--  The Company's share of the award is based on a sliding scale of the sum
    determined by the arbitrator. The determination of this amount is laid
    out in the body of the release below; 
    
--  The Participation Agreement was approved by a Special Committee of the
    Samco Gold board ("the Board") and is conditional upon a number of
    items, including the approval of independent shareholders holding over
    50% of the issued shares of the Company. 



Commenting on the transaction, Charles Koppel, Executive Chairman and CEO of
Samco Gold said:


"We are delighted to have secured this unique and exciting opportunity. At a
time when mining companies are finding it difficult to raise finance for
exploration, this transaction is expected to provide the Company with a
substantial capital injection, with potential for a future revenue stream. This
would allow us to accelerate the development of our very exciting portfolio,
notably our two core projects at El Dorado Monserrat and Corina. The Board is
especially pleased to have achieved this without any equity dilution to our
shareholders, particularly relevant given the difficult investment environment
currently facing the industry."


About Samco Gold Limited 

Samco Gold's principal business is the acquisition, exploration and development
of precious metals resource properties in Argentina. The Company's principal
mineral property is the El Dorado Monserrat ("EDM") epithermal gold project,
located in the Deseado Massif region of Santa Cruz Province, Argentina. With an
experienced board and management team including a strong Argentinean compliment,
the Company's goal is to become an Argentinean producer of gold and silver
through the exploration and development of EDM. Samco Gold also owns a portfolio
of other mineral exploration properties in the Deseado Massif. 


Additional details on the Company are available on SEDAR (www.sedar.com). 

BACKGROUND

The Grantor was party to a regional alliance agreement with, among others,
Northern Orion. The agreement provided that the Grantor and Northern Orion had a
right to participate equally in mining opportunities generated by the other
party in Argentina, among other jurisdictions (the "Priority Right"). The
Grantor commenced a legal action in the courts of Buenos Aires, Argentina
against Northern Orion for breach of the Grantor's Priority Right (the "Legal
Action").


The Grantor won the case at the Argentinean Commercial Court of Appeals, which
found on May 22, 2013 that Northern Orion breached the Grantor's Priority Right
(the "Court of Appeals Decision"). With respect to Northern Orion's 12.5%
interest in Alumbrera, the Commercial Court of Appeals awarded damages to the
Grantor representing 15% of Northern Orion's dividends (subject to certain
adjustments) commencing from its original investment in 2003 to the expected end
of the mine life in 2015 (the "Alumbrera Court Awarded Rights"). A court
appointed arbitrator (the "Arbitrator") will assess the monetary value of the
Alumbrera Court Awarded Rights (the "Arbitrator's Decision").


In an extraordinary proceeding on June 12, 2013, Northern Orion presented to the
Commercial Court of Appeals a request that the Supreme Court of Justice consider
the Court of Appeals Decision on the grounds of arbitrariness of judgment. This
request was rejected by the Commercial Court of Appeals on December 11, 2013.


In addition to the dividends received by Northern Orion from Alumbrera, the
Company and the Grantor believe that the Priority Right reflected in the Court
of Appeals Decision could eventually extend to additional revenue streams
("Additional Revenue Streams") beyond the Alumbrera Court Awarded Rights (the
Alumbrera Court Awarded Rights and the Additional Revenue Streams are
collectively referred to as the "Assignable Rights"). 


The Participation Agreement between the Company and the Grantor arises as a
result of the relationship between the parties and joint belief that the
Grantor, the Company and the shareholders of Samco Gold would benefit from
pursuing the potential revenue streams from the Assignable Rights together in
line with the conditions of the Participation Agreement.


THE PARTICIPATION AND OPTION AGREEMENT

The Option Payment 

Under the Participation Agreement, the Company is to pay the Grantor
US$1,400,000 (the "Option Payment") within three (3) business days from when the
Company obtains the necessary approvals for the Participation Agreement and the
transactions contemplated therein, which are: (i) all necessary regulatory and
TSX Venture Exchange approvals, and (ii) approval of the minority shareholders
of the Company.


The Award Payment 

Upon enforcement of or a settlement concerning the Alumbrera Court Awarded
Rights that results in the receipt of consideration (before deducting reasonable
costs and disbursements) set out in the left hand column of the following table
(the "Court Award"), the Grantor is required under the Participation Agreement
to immediately deliver to the Company the amount (whether in cash or, in the
case of a settlement with a third party, if applicable, its equivalent in freely
tradeable securities) set out in the right hand column of the following table
(the "Payment to Samco Gold"): 




Court Award                           Payment to Samco Gold                 
----------------------------------------------------------------------------
Up to US$50 million                   US$1.4 million                        
                                                                            
More than US$50 million to US$100     US$1.4 million + 30% of the amount of 
 million                              the Award in excess of US$50 million  
                                                                            
More than US$100 million              US$16.4 million + 50% of the amount of
                                      the Award in excess of US$100 million 



In lieu of the Payment to Samco Gold, for a prescribed period of time, the
Company will also have the right under the Participation Agreement to acquire
from the Grantor the Assignable Rights (the "Buy-out") by paying the Grantor
US$50 million, provided these purchase funds are not raised through the issue of
shares or convertible securities of the Company or its affiliates. 


In the event that there is a change of control concerning the Company (the
"Acquisition"), the Company must pay US$50 million to the Grantor (the
"Acquisition Payment") concurrently with the completion of such Acquisition,
which is deemed under the Participation Agreement to complete the Company's
acquisition of the Assignable Rights. If the Acquisition Payment is not made
concurrently with completion of the Acquisition, the Participation Agreement
will terminate without the Company acquiring any interest in the Assignable
Rights. The Grantor would then be required to reimburse the Company for the
Option Payment from proceeds received by the Grantor arising from the Legal
Action.


If at any time following the payment of the Award Payment the Grantor were to
seek to secure further rights, interests or other compensation in regards to the
Assignable Rights (i.e. beyond those from a Court Award), any proceeds arising
(less reasonable costs) will be divided equally between the Grantor and the
Company.


The Grantor has a right to terminate the Participation Agreement commencing on
the three hundred and sixty fifth (365th) day following the Arbitrator's
Decision or, if later, the date on which any available appeal therefrom is
exhausted. The Company may terminate the Participation Agreement at any time. 


If the Participation Agreement is terminated before receipt of the Court Award,
Buy-out or Acquisition, and if the Grantor first receives proceeds arising from
enforcement, settlement, sale, assignment or other form of monetization of the
Assignable Rights (the "Proceeds"), the Grantor will forthwith: 




--  reimburse the Option Payment to the Company, 
    
--  reimburse any reasonable costs incurred by the Company in respect of the
    Assignable Rights, and 
    
--  if the Grantor terminates the Participation Agreement as described above
    and if the Proceeds are received by the Grantor within one (1) year of
    termination of the Participation Agreement, pay to the Company an amount
    equal to ten percent (10%) of the Proceeds over US$50 million. 



The Board considers that the funds arising from the Participation Agreement will
allow the Company to continue to focus its attention on the development of its
core EDM and Corina projects which the Company believes to be very promising.
Most significantly, the Participation Agreement allows this to be achieved
without equity dilution to shareholders at a time where capital markets are
proving to be a difficult environment to source capital.


BOARD AND INDEPENDENT SHAREHOLDER APPROVAL

A Special Committee of the Board was constituted to review the Participation
Agreement and report to the Board. The Participation Agreement was recommended
by the Special Committee and approved by the directors of the Company other than
the Grantor. The Grantor declared his interest in the Participation Agreement
and abstained from its approval. 


Under Part 5 of Multilateral Instrument 61-101 - Protection of Minority Security
Holders in Special Transactions ("MI 61-101") the Company is exempt from the
formal valuation requirement as the securities of the Company are not listed or
quoted on a specified market under section 5.5(b). No exemption is available
from the minority approval requirements of Section 5.6 of MI 61-101 in respect
of the Participation Agreement, and, as such, the Company is required to obtain
"minority approval" as defined in MI 61-101 (the "Minority Approval") for the
Participation Agreement from the holders of common shares of the Company at a
meeting of such holders. For the purposes of MI 61-101, such approval must
exclude any votes attached to common shares of Samco Gold which, to the
knowledge of the Company or any "interested party" (as such term is defined in
MI 61-101) or their respective directors or senior officers, after reasonable
inquiry, are beneficially owned or over which control or direction is exercised
by: (a) the Company, (b) an interested party, (c) a related party of an
interested party, unless the related party meets that description solely in its
capacity as a director or senior officer of one or more entities that are
neither interested parties nor issuer insiders of the Company, or (d) a joint
actor with a person or company referred to in (b) or (c) in respect of the
Participation Agreement.


In respect of the above criteria, the Company does not beneficially own, and it
does not exercise control or direction over any common shares of the Company. To
the Company's knowledge, there are no other "interested parties" in respect of
the Participation Agreement other than the Grantor. Pursuant to applicable
securities laws, a total of 14,500,000 common shares of the Company, or
approximately 22.3% of the total issued and outstanding common shares of the
Company as of the date hereof are to be excluded from voting. 


As the holding of a meeting of shareholders is both costly and time-consuming,
the Company will apply to the Ontario Securities Commission for a decision under
Section 9.1 of MI 61-101 exempting the Company from the requirement to call a
meeting of shareholders to consider the Participation Agreement, and to send an
information circular to shareholders in connection with such meeting, and, in
lieu of such requirements, to obtain the Minority Approval for the Participation
Agreement by obtaining the written consent of shareholders representing at least
50% + 1 of the common shares of the Company held by those shareholders whose
votes are not required to be excluded under MI 61-101.


Pursuant to Section 5.14(b) of TSXV Policy 5.3, the TSX-V also requires approval
of the Participation Agreement by the disinterested shareholders of the Company.
The Company has requested that such shareholder approval may be provided by the
written consent of the Company's disinterested shareholders holding at least 50%
+ 1 of the common shares of the Company, as evidenced by the signing of consents
by such shareholders, if permitted by applicable securities laws. 


The Participation Agreement and form of consent to be provided to the Company's
shareholders whose written consent to the Agreement is sought will be filed on
SEDAR as a "Material Document", and will be accessible at www.sedar.com. 


FORWARD LOOKING STATEMENTS 

This press release contains forward-looking statements which can be identified
by the use of words "could", "believe", "potential", "anticipated", "goal", and
phrases or statements that certain actions, events or results "may", "would", or
"will" be taken, occur or be achieved. 


Forward-looking statements involve known and unknown risks, assumptions, future
events, conditions, uncertainties and other factors which may cause the actual
results, performance or achievements to be materially different from any future
results, prediction, projection, forecast, performance or achievements expressed
or implied by the forward-looking statements. Such factors include, among
others, obtaining the necessary regulatory and shareholder approvals under the
Participation Agreement; any reversal or modification of the Court of Appeals
Decision; the monetary value of the Alumbrera Court Awarded Rights as determined
by the Arbitrator in the Arbitrator's Decision; the ability to enforce the
Arbitrator's Decision; the availability of Additional Revenue Streams; the
ability of the Company to exercise its buy-out option under the Participation
Agreement; changes in project parameters as plans continue to be refined; future
prices of gold; possible variations in grade or recovery rates; failure of
equipment or processes to operate as anticipated; labour disputes and other
risks of the mining industry; delays in obtaining governmental approvals or
financing or in the completion of exploration, as well as those factors
disclosed in Samco Gold's disclosure documents publicly available under the
Company's profile on the SEDAR website at www.sedar.com. Although Samco Gold has
attempted to identify important factors that could cause actual actions, events
or results to differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events or results not
to be as anticipated, estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking
statements. The Company does not intend, and does not assume any obligations, to
update forward-looking statements, whether as a result of new information,
future events or otherwise, unless otherwise required by applicable securities
laws.


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 release.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Samco Gold Limited
Charles Koppel
Executive Chairman and Chief Executive Officer
+44 (0) 20 7440 5791
ck@samcogold.com


Bell Pottinger
Daniel Thole
Financial Communications
+44 (0) 20 7861 1606


Bell Pottinger
Marcin Zydowicz
Financial Communications
+44 (0) 20 7861 1606

Samco Gold (TSXV:SGA)
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