Vaaldiam Reduces Costs and Defers Brauna Payment
TORONTO, ONTARIO -- (Marketwire) -- 08/04/11 -- Vaaldiam Mining Inc. ('Vaaldiam' or 'the Company') (TSX: VAA) reports that it did not make the installment of US$1.5 million which became due today under the previously announced March 2011 agreement with its joint venture partners in the Brauna project under which the Company increased its interests in the Brauna project from 20% to 51%. Vaaldiam is in discussions with its partners to seek a mutually acceptable arrangement for addressing this payment.
In March 2011, Vaaldiam agreed with its joint venture partners in the Brauna project that it would undertake to make three installments totalling approximately US$6.5 million as part of the transaction consideration to acquire the additional interest. The first installment of approximately US$0.9 million was paid on execution of the agreement; a second installment of US$1.5 million was due on August 4, 2011, and the remainder is due on June 4, 2012.
In the second quarter of 2011, global events have combined to reduce investors' appetites for risk: the earthquake in Japan, the European debt crisis, slowing growth in the U.S. and China, and now increasing uncertainty about downgrades to the United States debt rating, all contributed to increased risk aversion. As such, the Company is reducing costs where possible and also delaying expenditures until the markets for junior resource equities and its non-core assets improve.
Vaaldiam CEO Robert Jackson said, 'The junior resource sector is characterized by periods of extreme variability in terms of capital availability and the key success factor for junior companies in periods such as this is to reduce costs and survive until capital is available again. Vaaldiam is currently pursuing this strategy.'
The Company has cash on hand of approximately $4 million, owns marketable securities valued at approximately $1.7 million, owns 18.55% of Flemish Gold Corp. (a private company with gold properties in eastern Africa) and royalty rights in the Kwale project in Kenya and the Pukaqaqa project in Peru.
For additional information regarding Vaaldiam please visit www.vaaldiam.com.
Certain of the information contained in this news release constitutes 'forward-looking statements' within the meaning of securities laws. Such forward-looking statements, including but not limited to those with respect to the prices of metals and minerals, purchase payments, royalty payments, estimated future production and estimated costs of future production involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any forecast results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the actual prices of metals and minerals, the actual results of current exploration, development and mining activities, changes in project parameters as plans continue to be evaluated, as well as those factors disclosed in the documents of the Company filed from time to time with the Ontario Securities Commission.
Contacts:
Vaaldiam Mining Inc.
Robert Jackson
President and Chief Executive Officer
rjackson@vaaldiam.com
www.vaaldiam.com