Cantex Announces Al Hariqah Option Agreement with WCP Resources Ltd
December 16 2011 - 10:10AM
PR Newswire (Canada)
KELOWNA, BC, Dec. 16, 2011 /CNW/ - Cantex Mine Development Corp.
("Cantex" or the "Company") is pleased to announce the signing of
an agreement with WCP Resources Ltd ("WCP") wherein WCP can earn up
to a 70% interest in the Al Hariqah gold project by funding
advanced exploration and mine development to commercial
production. Cantex also announces the end of the Vale option
agreement. Vale Option Agreement Pursuant to the terms of the
November 2008 letter agreement entered into with Vale, the Company
has received notification that Vale has decided not to pursue the
Suwar Option and accordingly has elected to terminate the letter
agreement effective immediately. WCP Commercial Terms WCP and
Cantex have entered into an earn-in agreement ("Agreement")
regarding the Al Hariqah Gold project ("Project") which provides
the following: (i) WCP will have up to
2 years to exercise an option to commence the earn-in to the
Project ("Earn-in Option");
(ii) During the Earn-in Option period,
Cantex will continue to manage the Project, and WCP will be
responsible for all agreed or budgeted costs of the Project;
(iii) Upon the exercise of the Earn-in
Option ("Commencement Date"), WCP may earn an interest in the
Project by expending: -- five million dollars (US$5,000,000)
("First Earn-in Expenditure") within 2 years of the Commencement
Date to acquire a 40% interest in the Project; -- ten million
dollars (US$10,000,000) ("Second Earn-in Expenditure") within the
following 2 years to increase its interest in the Project to 50%;
and -- fifteen million dollars (US$15,000,000) ("Third Earn-in
Expenditure") within the following 3 years to increase its interest
in the Project to 70%;
(iv) Expenditure by WCP during the
Earn-in Option period will be included in calculation of the First
Earn-in Expenditure; (v) WCP will
manage the Project during the Earn-in period and will be able to
utilise Cantex's existing in-country exploration team;
(vi) Force majeure provisions (which
include sovereign risk and conflict issues) may apply to the above
time frames; (vii) Prior to earning a
40% interest in the Project, WCP may withdraw from the Agreement at
any time; (viii) An incorporated joint
venture ("JV") will be formed upon WCP earning an interest in the
Project; (ix) Upon formation of the
JV, WCP's representation on the board of directors ("Board") of the
new company will be proportional to its shareholding in that
entity; * Most matters of the JV will
require a simple Board majority (including decision to mine).
However, some matters will require a unanimous decision of the
Board (including sale of the Project and surrender of the license);
(xi) In circumstances where WCP earn a
70% interest in the Project and a decision to mine the project is
reached, WCP will carry Cantex's portion of mine construction costs
to initial production via a loan at an agreed/market interest rate.
The loan would be repaid from the first 80% of profits earned by
Cantex; (xii) Once the JV is formed,
each party has pre-emptive rights over the other party's interest
in the JV; (xiii) If WCP only earns a
40% or 50% interest in the Project (i.e. does not earn a 70%
interest in the Project), then each party must fund its own
proportion to reach initial production. If a party does not do so,
then its interest in the JV will be diluted;
(xiv) Upon initial production by the
JV (whether solely funded by WCP or not), dilution will apply to a
parties' interest in the JV if it does not continue to contribute
in accordance with its interest at that time;
(xv) Should the Government of the
Republic of Yemen acquire an interest in the Project, then the
parties will dilute their interest in the Project on a pro rata
basis; (xvi) The Agreement is subject
to the following conditions precedent: -- each party obtaining all
necessary regulatory approvals necessary to effect to the
transactions contemplated by the Agreement; and -- WCP completing
due diligence to its sole satisfaction on the Project within 60
days of execution of the Agreement. WCP Resources WCP Resources
Limited is a gold exploration company listed on the Australian
Securities Exchange and is chaired by the highly regarded mining
executive Mr. Ian Middlemas, with geologist Mr. Peter Woodman as
Managing Director and CEO. Mr. Middlemas is an experienced mining
executive and has been in commerce for over twenty years. A
Chartered Accountant and member of the Financial Services Institute
of Australasia, Mr. Middlemas has held senior executive positions
and directorships with a number of public companies: -- Senior
Group Executive with the Normandy Mining Group for approximately
ten years, during which time it became Australia's largest gold
producer. -- Chairman of Mantra Resources Limited from its IPO
until its recent takeover by JSC Atomredmetzoloto for an all-cash
consideration of A$1.02 billion. -- Chairman of Coalspur Mines
Limited , which grew to a market capitalization of over A$1 billion
during his involvement. -- Currently Chairman of a number of
resource companies including African Gold exploration company;
Papillon Resources Limited ; and Philippines gold exploration
Company Sierra Mining Limited . Mr. Woodman is a geologist with
over 20 years' experience in exploration, development and
operations in the mining industry - primarily in the gold
sector. He has direct experience with gold project
development in the region having held a senior operational position
at the Sukari Gold Project in Egypt. Prior to joining WCP, Mr.
Woodman held a number of senior executive and operational positions
where he was responsible for exploration and development
programmes, including Wedgetail Mining Limited where, as CEO, he
oversaw the successful completion of the bankable feasibility study
and funding for the Nullagine Gold Project in Western Australia.
Prior to his role with Wedgetail Mining Ltd, he held positions with
Samantha Gold NL (Western Australian Gold Projects, Ranger Minerals
NL (Damang Gold Project in Ghana), Hellman & Schofield Pty Ltd
(Resources Consultancy), Centamin Egypt Ltd (at the Sukari Gold
Project in Egypt) and Kingsgate Consolidated Ltd (at the Chatree
Gold Silver Mine in Thailand). His background is in management,
exploration planning and execution, resource development and mining
operations both in Australia and overseas. He is a graduate of the
Australian National University and is a corporate member of the
Australian Institute of Mining and Metallurgy. Summary Cantex looks
forward to WCP's involvement in the Al Hariqah project. The
addition of their technical expertise and financial backing has the
potential to, not only define a substantial gold reserve, but also
to take the project through to commercial production. This press
release has been prepared by Chad Ulansky P.Geol, a Qualified
Person. Signed, Charles Fipke Charles Fipke Chairman Neither 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. Cantex
Mine Development Corp. CONTACT: Cantex Mine Development Corp.,
203-1634 Harvey Ave., Kelowna, BC,V1Y6G2, Tel (250) 860 8582, Fax
(250) 860 1362, Email info@cantex.ca
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