Adit Resources Completes Private Placement and Signs Letter of Intent to Option Picacho Gold and Silver Property
CHICAGO, IL -- (Marketwire) -- 02/02/11 -- Tara Minerals Corp. (OTCBB: TARM) (BERLIN: 6T3) is pleased to announce that its subsidiary, Adit Resources Corp., has closed an equity financing for $500,000. The $500,000 investment into Adit is through a private placement with Yamana Gold Inc. of 500,000 units exchangeable for 500,000 common shares and 250,000 common share purchase warrants, each exercisable for one common share for a term of three years at an exercise price of $1.50 per share.
Adit has also signed a letter of intent with Yamana Gold Inc. (the 'Investor') that grants an option to acquire up to a 70% interest in the Picacho gold/silver project. A definitive agreement is expected to be completed within 45 days. Upon completion of the definitive agreement, Adit anticipates receipt of an additional investment of $2.5 million to be completed on the same terms. From this initial total equity investment of $3 million, Adit will be required to spend $2 million advancing exploration work on the Picacho project. The definitive agreement will allow the Investor the right to maintain or increase its pro rata Adit ownership interest up to 19.9% by participating in any form of future equity financing of Adit.
Terms of the agreement also allow the Investor to earn an initial 51% by spending $5 million on the project within 30 months of the execution of the definitive agreement. In addition to these expenditures, Adit will receive payments totaling $1 million as expenditure milestones are achieved. Upon earning 51%, the title and rights to Picacho will be transferred into a joint venture owned 51% by the Investor and 49% by Adit.
The Investor will then have the option to increase its interest to 70% by spending an additional $9 million within 66 months of the execution of the definitive agreement. In addition to these expenditures, Adit will receive payments totaling $2 million as expenditure milestones are achieved. Upon the Investor earning 70%, Adit has the right to request funding for 100% of Adit's shareholder commitments, in the form of a carried funding loan advance, to the joint venture in connection with the completion of a feasibility study.
Work to date on Picacho has identified nine gold-bearing veins over four mineralized target areas with an aggregate strike length of over 10.8 km. Drilling of approximately 5,300 meters has been completed along only 600 meters of the vein system, with true width intercepts including 11.3 m of 15.6 g/t gold, 6.1 m of 4.7 g/t gold, and 9.4 m of 7.8 g/t gold.
The Picacho project area consists of 7,060 ha and is located in Sonora, Mexico, 100 km south of the U.S.A border. The area has a high level of exploration activity, is close to a national paved highway, power grid, and a 1,200 m airstrip.
Robert Wheatley, President of Adit, commented, 'We are honored to have a proven explorer and operator invest in the potential shown by Picacho. I would like to thank our geologists and local technicians for their efforts in advancing the project as well as our shareholders for their patience and their faith in the project.'
'We are pleased with Adit's new opportunity and continue to focus on the advancement of Tara Minerals' tremendous property portfolio,' said Mr. Francis Biscan Jr., President of Tara Minerals.
About Tara Minerals Corp. (http://www.TaraMinerals.com)
Tara Minerals Corp. is progressing towards advancing development of its Don Roman mine and mill, located in Choix, Mexico. Management is focused on creating long-term shareholder value and deploying its capital to advance its projects by enhancing resources, further outlining new discoveries/targets, and acquiring additional strategic assets. Tara's strength in recognizing value early and strategy of reducing risk through a foundation of cash flow, positions it for low-risk value creation. Tara Gold Resources Corp. (PINKSHEETS: TRGD) (FRANKFURT: T8N) owns 40,898,190 shares of Tara Minerals.
About Adit Resources Corp. (http://www.AditResources.com)
Adit Resources Corp. is a growth-oriented precious metals exploration and development company with an objective to become a significant precious metals producer by exploring, developing, and reinitiating production at the Picacho project in Mexico and other North American exploration/advanced-stage projects.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained herein which are not historical are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, certain delays beyond the company's control with respect to market acceptance of new technologies or products, delays in testing and evaluation of products, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.
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