Unity to spin out Dickens Lake gold assets

Unity Energy Corp. has approved the implementation of a series of value-enhancing transactions that, subject to applicable regulatory and other approvals, will result in eligible Unity shareholders owning shares in two separate companies, Unity Energy Corp. and Patrone Gold Corp.

Unity Energy Corp. has recently established a new wholly owned subsidiary to which it will transfer its Dickens Lake gold assets. The project consists of four adjoining mineral dispositions and covers an area of over 6,000 hectares in a region that has produced over 600,000 ounces of gold. Unity has a 100-per-cent interest in the Dickens Lake project, subject to a 2-per-cent net smelter royalty, of which 1.5 per cent can be purchased for $1.5-million. More than 100 gold showings and four past producers are documented in the La Ronge gold belt and over $70-million has been spent on gold exploration and development since 1980. Earlier this spring, Unity completed a VTEM survey of the Dickens Lake project and final results and interpretation are expected in the near term. The company expects to undertake an internal reorganization and work with the appropriate authorities to transfer the Dickens Lake assets from Unity Energy to this new wholly owned subsidiary.

Patrone Gold Corp. is to become a gold exploration company focused on Canadian and international exploration and development. Patrone will initially hold Unity's 100-per-cent equity interest in the Dickens Lake gold project in Saskatchewan.

The directors and senior management team of Patrone will consist of current directors and senior officers of Unity.

Upon completion of the proposed internal reorganization and subject to applicable regulatory approvals, Unity Energy Corp. intends to distribute, by way of dividend in kind to current eligible Unity shareholders, all of the shares in Patrone Gold Corp. held by Unity Energy as part of listing the shares of Patrone on the TSX Venture Exchange. Shares of Patrone Gold Corp. will be issued to eligible Unity Energy Corp. shareholders, holding Unity common shares as of the record date, which is yet to be determined, on a 1 (one) for 2 (two) basis.
Immediately following the distribution of the dividend in kind, Patrone intends to conduct a private placement of a minimum of up to $750,000 to raise the balance of funds necessary to conduct their near-term exploration, development activities and general corporate purposes. The private placement will entitle eligible shareholders to acquire additional shares in Patrone.

Anita Algie, BSc, president, chief executive officer and director of Unity, commented: "Positive results indicated at Dickens Lake justify this gold asset creating its own market and raising funds to further exploration and add shareholder value. Unity Energy's roots shall remain grounded in energy through exploration of its significant portfolio of prospective uranium properties in the Athabasca basin."

Unity anticipates completing the transaction in Q1 of 2012, subject to financing and regulatory approvals. As part of the transaction, Unity will file a preliminary prospectus with the Canadian securities regulatory authorities for Patrone which will contain detailed information on the new company as well as the terms of the dividends in kind and rights offerings. Completion of the proposed transaction is subject to a number of conditions including the approval of the TSX Venture Exchange and other applicable securities regulatory authorities.