KELOWNA, BC,
Feb. 7, 2014 /CNW/ - Cantex Mine
Development Corp. (CD : TSXV) ("Cantex" or the "Company") is
pleased to announce that WCP Resources Ltd ("WCP") has exercised
its option to farm-in to the Al Hariqah Gold Project, a prospective
and potentially large scale gold project located in the Republic of
Yemen.
Introduction
The Al Hariqah Gold Project (Project) is
a near-surface gold deposit located 130km northwest of Sana'a,
Yemen. The Project is currently
100% owned by Cantex and comprises a granted exploration licence
covering an area of approximately 957 square kilometres and is
valid until 16 January 2016 with the
option for two further 4 year extensions (providing 50% area
relinquishments are carried out at the first extension).
On February 6, 2014
WCP exercised its option to earn-in to the Project. By meeting a
series of expenditure commitments, WCP will be able to
progressively earn up to a 70% interest in the Project.
Commercial Terms
In December 2011, WCP
and Cantex entered into an option and earn-in agreement
("Agreement") regarding the Al Hariqah Gold Project which
provides the following:
| (i) |
Upon the exercise of the Earn-in Option ("Commencement
Date"), WCP may earn an interest in the Project by
expending: |
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|
| |
- 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%;
|
| (ii) |
Expenditure by WCP since the execution of the agreement in
December 2011 will be included in calculation of the First Earn-in
Expenditure; |
| |
|
| (iii) |
WCP will manage the Project during the Earn-in period and will
be able to utilise Cantex's existing in-country exploration
team; |
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|
| (iv) |
Force majeure provisions (which include sovereign risk and
conflict issues) may apply to the above time frames; |
| |
|
| (v) |
Prior to earning a 40% interest in the Project, WCP may
withdraw from the Agreement at any time; |
| |
|
| (vi) |
An incorporated joint venture ("JV") will be formed upon
WCP earning an interest in the Project; |
| |
|
| (vii) |
Upon formation of the JV company, WCP's board representation
will reflect its shareholding in that entity; |
| |
|
| (viii) |
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); |
| |
|
| (ix) |
Upon earning a 70% interest in the Project, WCP will loan carry
Cantex to initial production (at an agreed / market interest
rate).In these circumstances, the first 80% of earning from the JV
will be applied to repay WCP's loan to the JV; |
| |
|
| * |
Once the JV is formed, each party has pre-emptive rights over
the other party's interest in the JV; |
| |
|
| (xi) |
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;
and |
| |
|
| (xii) |
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. |
Cantex is pleased to have WCP's continued
involvement in the Al Hariqah project. The recent drill
results released on January 23, 2014
indicate that the gold mineralization which has been defined by
significant drilling in the northern kilometre of the deposit may
extend for up to a further three kilometres to the south.
The technical information and results reported here
have been reviewed by Mr. Chad Ulansky
P.Geol., a Qualified Person under National Instrument
43-101, who is responsible for the technical content of this
release.
Signed,
Charles
Fipke
Charles Fipke
Chairman
About the Company
Beyond the Al Hariqah gold project Cantex has
projects in the Yukon and
Nevada. In the Yukon recent work has identified the potential
for the claims area to host Carlin-style mineralization. In
Nevada the Company has five drill ready properties along known
trends of gold mines and is currently seeking joint venture
partners to advance the projects.
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.
SOURCE Cantex Mine Development Corp.