VVC Exploration Obtains Option to Increase Its Ownership in Samalayuca Cobre, Owner of the Kaity Claim, Also Known as the Samalayuca Copper Project
TORONTO, ONTARIO--(Marketwired - Sep 11, 2015) - VVC Exploration Corp. ("VVC" or the "Company") (TSX VENTURE:VVC) is pleased to report that the Company has entered into option agreements with two arm-length parties to acquire an additional 45,000 common shares of Samalayuca Cobre S.A. de C.V. ("SC") over a period of 36 months by making aggregate cash payments of US$850,000, issuing an aggregate of 32,500,000 units of VVC ("Unit"), each unit comprising one common share ("Share") of VVC and one share purchase warrant ("Warrant") exercisable at CA$0.06 per Share over five years (the "Options"). If the Options are fully exercised then VVC would beneficially own 90,000 shares of SC representing 67.5% of the total outstanding shares of SC. The option agreements and the issuance of Shares and Warrants thereunder are subject to obtaining the approval of the TSX Venture Exchange. The transactions also requires the approval of the Board of Directors of SC in order to effect the transfer of the SC shares.
The option agreements were entered into with (a) Ressources Orford Inc. ("Orford"), a company incorporated in the Province of Québec, and (b) Inversiones Agrofinacieras de Panama, S.A. ("IAP"), a company incorporated in Panama. If the Options are fully exercised by VVC, (a) Orford will receive an aggregate of US$750,000, 20 million Units, and (b) IAP will receive an aggregate of US$100,000, 12.5 million Units. The first payment will commence three months after SC has obtained the required approvals for the rezoning on the Kaity Claim (the "Zoning Approvals"), as evidenced by the publication on the Government website. The option payments will be US$85,000 and 4,725,000 Units in Year 1, US$265,000 and 9,525,000 Units in Year 2, and US$500,000 and 18,250,000 Units in Year 3.
CONANP, a Mexican Government agency, approved a revised zoning plan for the area which includes Samalayuca Cobre's Kaity claim with a new designation, "Mining Exploration and Exploitation" for the Kaity Claims. This revised plan was approved by CONANP on June 25, 2015. The agency then held three days of "Public Consultation" on these revisions on August 26, 27, and 28 in Juarez, Samalayuca, and Chihuahua. A summary of the results of those three Public Consultations is being prepared for review by SEMARNAT (parent agency of CONANP) and COFEMER (the agency that reviews all regulations for conflicts with existing regulations and between agencies), and submission to House of Deputies. The zoning change when approved by CONANP is then published on the Government website, at which time it is final.
Jim Culver President of VVC said, "This transaction has been an objective of VVC for some time and we are pleased to have an agreement in hand. As the Samalayuca Copper Project gets closer to the start of an environmentally sustainable mining project, it is important that VVC be able to exercise control of the project to drive it forward." The property rezoning and the option to purchase additional shares of Samalayuca Cobre are major milestones for VVC.
It should be noted that while there has been previous copper production on the property, there has been no feasibility study, prefeasibility study or preliminary economic analysis, relating to production from the property, done on the Samalayuca project and in addition no NI 43-101 compliant reserves have yet been defined and as such the project has not been shown to be economic through these studies. Inferred Mineral Resource of 4,100,281 T grading 0.47 % Cu and 5.8 g/t Ag, were defined in a report dated April 20, 2013 by Dr. Michel Boily (PhD., P.Geo.), an independent qualified person (QP) under NI 43-101 which report was filed on SEDAR on October 7, 2013. One of the partners in the project, Firex S.A. de C.V., has committed to finance the production startup of the Samalayuca Copper Project on the Kaity Claim without the requirement of the above noted studies, once all permits are in place.
The technical aspects of this news release were reviewed by Peter Dimmell, P.Geo (NL, ON, SK, QC Temp), who is a director of VVC and a Qualified Person (QP) as defined in National Instrument 43‐101.
About VVC Exploration Corporation
VVC is a Canadian exploration and mining company with projects in Mexico and Canada, which includes a near production copper prospect in Chihuahua State, and gold and silver prospects in Sonora and Sinaloa States of Mexico. The Company also has grass-roots gold prospects in the Timmins area of northern Ontario. VVC is aggressively seeking to convert its near production copper project, Samalayuca, to pilot, then full, production.
On behalf of the Board of Directors
Michel J. Lafrance, Secretary-Treasurer
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release contains "forward-looking information" (within the meaning of applicable Canadian securities laws) and "forward -looking statements" (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995). Such statements or information are identified with words such as "anticipate", "believe", "expect", "plan", "intend", "potential", "estimate", "propose", "project", "outlook", "foresee" or similar words suggesting future outcomes or statements regarding an outlook. Such statements include, among others, those concerning the Zoning Approvals for the Kaity Claims and the start of an environmentally sustainable mining project at Samalayuca.
Such forward-looking information or statements are based on a number of risks, uncertainties and assumptions which may cause actual results or other expectations to differ materially from those anticipated and which may prove to be incorrect. Assumptions have been made regarding, among other things, management's expectations regarding Zoning Changes, future development and growth, plans for and completion of projects by Company's third party relationships, availability of capital, and the necessity to incur capital and other expenditures. Actual results could differ materially due to a number of factors, including, without limitation, operational risks in the completion of Company's anticipated projects, delays or changes in plans with respect to the development of Company's anticipated projects by Company's third party relationships, risks affecting the ability to develop projects, risks inherent in operating in foreign jurisdictions, the ability to attract key personnel, and the inability to raise additional capital. No assurances can be given that the efforts by Company will be successful. Additional assumptions and risks are set out in detail in the Company's MD&A, available on SEDAR at www.sedar.com.
Although the Company believes that the expectations reflected in the forward-looking information or statements are reasonable, prospective investors in the Company's securities should not place undue reliance on forward-looking statements because the Company can provide no assurance that such expectations will prove to be correct. Forward-looking information and statements contained in this news release are as of the date of this news release and the Company assumes no obligation to update or revise this forward-looking information and statements except as required by law.
Investors are cautioned that notwithstanding the expectations described herein, there can be no assurance that the Zoning Approvals will be obtained as proposed. Trading in the securities of VVC should be considered highly speculative. All forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement.