Mediterranean Resources signs Letter of Intent with Turkish Group to Sell a 20% Stake in its Turkish Project and Advance EIA
VANCOUVER, Dec. 5, 2011 /CNW/ - Mediterranean Resources
(''Mediterranean'') wishes to advise that it has entered into a Letter of Intent with Lovet Tekstil Gida Turizm Org Ins. Sanayi ve Dis Ticaret A.S. ('Lovet'), a private Turkish company, whereby Lovet may purchase a 20% interest in Mediterranean's Red Mountain (Kizildag) Project in north eastern Turkey. The Red Mountain Project includes the Tac and Corak associated licenses, but does not include the Company's Celtik project. Lovet is a construction company based in Istanbul. It belongs to a larger economic grouping that includes interests in oil & gas exploration, textiles, hotels and property development.Under the terms of the agreement, Lovet will undertake an Environmental Impact Assessment (EIA) for the Red Mountain project at its cost on behalf of Akdeniz Madencilik AS, Mediterranean's wholly owned Turkish subsidiary, over the coming months. An EIA is a necessary step in the Turkish permitting process for progressing mining projects through to approval for mine construction. Lovet is also required to obtain the requisite Forestry permits and the Unsanitary Enterprise (GSM) permits.
Once approval for mine construction of the Red Mountain Project is received Lovet will have the right to subscribe for 20% of the expanded capital of Akdeniz in exchange for US$6.6m. On approval for mine construction Akdeniz will reimburse the technical cost of the EIA to Lovet.
In commenting upon the transaction, Mediterranean's Chairman, Dr. John Clarke noted 'This is an ideal outcome for both parties as our new Turkish partner commits to the project at the point that it is known that permitting is in place with their risk being only the cost of the EIA. Meanwhile Mediterranean obtains an important Turkish investor as a partner, a long-held goal of the company. The deal brings substantial future funding for Akdeniz whilst managing the mine permitting with experienced local operators.''
Mediterranean's CEO, Christopher Ecclestone added, 'this transaction is reflective of the company's commitment to moving the Red Mountain project towards production as rapidly as possible, while minimizing dilution to existing shareholders, through innovative agreements such as that with Lovet. We look forward to working with our new Turkish partners on Red Mountain, and possibly on other projects, in Turkey.'
Signed on behalf of the Board of Directors.
Neither Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities of the Company in any jurisdiction. The securities to be issued pursuant to the Unit Offering by the Company have not and will not be registered under the United States Securities Act of 1933, as amended (the '1933 Act'), or the securities laws of any state of the United States, and may not be offered or sold in the United States absent registration or an applicable exemption therefrom under the 1933 Act and the securities laws of all applicable states.
Certain information set out in this News Release constitutes forward-looking information, which may include information relating to the exploration and development of the Company's properties. Forward-looking statements (often, but not always, identified by the use of words such as 'expect', 'may', 'could', 'anticipate' or 'will' and similar expressions) may describe expectations, opinions or guidance that are not statements of fact and which may be based upon information provided by third parties. Forward-looking statements are based upon the opinions, expectations and estimates of management of the Company as at the date the statements are made and are subject to a variety of known and unknown risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. Those factors include, but are not limited to risks, uncertainties and other factors that are beyond the control of the Company, risks associated with the industry in general, commodity prices and exchange rate changes, operational risks associated with exploration, development and production operations, delays or changes in plans, risks associated with the uncertainty of reserve estimates, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. In light of the risks and uncertainties associated with forward-looking statements, readers are cautioned not to place undue reliance upon forward-looking information. Although the Company believes that the expectations reflected in the forward-looking statements set out in this press release or incorporated herein by reference are reasonable, it can give no assurance that such expectations will prove to have been correct. The forward-looking statements of the Company contained in this press release, or incorporated herein by reference, are expressly qualified, in their entirety, by this cautionary statement.
Mediterranean Resources Ltd.
CONTACT: Christopher Ecclestone
Chief Executive Officer
604-669-3397
www.medresources.ca