GOLD HILL, Nev., Sept. 25, 2006 (PRIMEZONE) -- GoldSpring, Inc. (OTCBB:GSPG) announced today that it has entered into a ten year lease with a local company, controlled by a former GoldSpring director, for a 10 year lease of all of its mining claims for its Big Mike copper mine. The lease calls for a $50,000 initial payment, which is scheduled to be made at the beginning of this week to cover royalty payments due for the first two years of the lease term. Additionally, the lessee must pay GoldSpring $75,000 when a production permit is awarded, and $125,000 when commercial mining commences. Additionally, the lessee agrees to a work expenditure of $300,000 for environmental and engineering matters in the first twelve months of the lease. During the term of the lease, Gold spring will also receive a production royalty of between 3% and 5% of net returns from copper mining, dependent on the price of copper.
In discussing the new lease arrangement, GoldSpring's CEO, Rob Faber, stated: "The Big Mike Lease is a great deal for the Company as it allows us to generate cash flow from our Big Mike copper mine without utilizing resources and taking away focus from our main business, gold mining. The payment structure yields an initial cash payment, in addition to the potential of adding $300,000 worth of engineering and environmental work in the first twelve months and $200,000 in cash between now and the beginning of actual production. We also have several other transactions in process at least one of which we hope to consummate in the near future, adding possible further immediate cash flow, in addition to long term revenue opportunity."
About GoldSpring, Inc.
GoldSpring, Inc. is a North American precious metals mining company with an operating gold and silver mine in northern Nevada. The Company was formed in mid-2003 and acquired the Plum Mine property in November 2003. In the Company's relatively short history, it secured permits, built an infrastructure and brought the Plum project into production. During 2005, the Company acquired additional properties around the Plum project in northern Nevada, expanding its footprint and creating opportunities for exploration. GoldSpring is an emerging company, looking to build on its success through the acquisition of other mineral properties in North America with reserves and exploration potential that can be efficiently put into near-term production. The Company's objectives are to increase production, increase reserves through exploration and acquisitions, expand its footprint at the Plum mine, and maximize cash flow and return for its shareholders.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain information included in this communication (as well as information included in oral statements or other written statements made or to be made by GoldSpring) contains statements that are "forward-looking," as defined in Section 21E of the Securities Exchange Act, such as statements relating to the future anticipated direction of the high technology and energy industries, plans for future expansion, various business development activities, planned capital expenditures, future funding sources, anticipated sales growth, mining capability and potential contracts. Such forward-looking information involves important risks and uncertainties, which include the risk factors disclosed in our most recent Form 10-KSB filed on April 15, 2005, that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of GoldSpring. These risks and uncertainties include, but are not limited to, those relating to development and expansion activities, dependence on existing management, financial activities, domestic and global economic conditions, changes in federal or state tax laws and market competition factors. These and other factors, which could cause actual results to differ materially, are discussed in more detail in GoldSpring's filings with the Securities and Exchange Commission. Forward-looking statements include statements regarding our expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. We assume no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise.