Adit and Yamana Close Option Agreement to Acquire Picacho Gold and Silver Property for a Series of Payments Totaling up to $35.6 Million
CHICAGO, IL -- (Marketwire) -- 05/30/12 -- Tara Minerals Corp. (OTCBB: TARM) (BERLIN: 6T3) is pleased to announce that its subsidiary, Adit Resources Corp., ("Adit") has entered into an agreement for the sale of American Copper Mining S.A. de C.V., the holder of Adit's Picacho group of concessions, to Yamana Mexico Holdings B.V., a subsidiary of Yamana Gold Inc.
Yamana has paid Adit $7.5 million upon closing, and, upon exercising the option to complete the acquisition, will pay (i) $9.8 million on or before the 12 month anniversary; (ii) an additional $1 million for every 100,000 ounces defined by the 60 month anniversary; and (iii) a final installment payment of $4.3 million on the sixth year anniversary. The payments for the measured, indicated, and inferred ounces defined will be capped at $14 million. If no gold is defined on the property by the 36 month anniversary, Yamana will make an advance payment of $3 million.
Yamana Gold Inc. has also surrendered 500,000 common shares, and warrants to purchase an additional 250,000 common shares that it holds in the capital of Adit for cancellation by Adit.
Yamana has the option, until ten business days prior to the one year anniversary, to either terminate the agreement or make the remainder of the payments when due, with the amount of each payment calculated as outlined above. If the agreement is terminated, Yamana will be required to return the capital stock of American Copper, all project related data, and the underlying property to Adit in good standing.
The Picacho group of concessions consists of 7,060 hectares and is located in Sonora, Mexico. 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.
Robert Wheatley, President of Adit, commented, "This agreement is beneficial to both parties. It a) provides Adit with a debt-free platform for future exploration and property acquisitions and provides its parent Tara, with funds to immediately advance production focused projects; and b) gives Yamana a strategic asset to grow its Mexican resources."
Mr. Francis Biscan Jr., President of Tara Minerals, stated, "We now have the funds and the team to focus on the advancement of the substantial property portfolio Tara Minerals has built over the last few years. We will also be pursuing other producing operations with expansion potential to continue to build the company."
In February 2011, Adit had entered into a letter of intent with Yamana that granted Yamana an option to acquire up to a 70% interest in the Picacho group of concessions. During negotiations towards a definitive agreement, both parties agreed that a 100% acquisition provided improved strategic benefits for both parties.
About Tara Minerals Corp. (http://www.TaraMinerals.com)
Tara Minerals Corp. is focused on advancing its gold/silver/zinc/lead Don Roman mine and mill and its iron ore projects located in Mexico. Management is 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.
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. Please read the full disclaimer at www.TaraMinerals.com (http://taraminerals.com/English/General/Disclaimer/default.aspx).
Contact:
David Barefoot
(888) 901-4550
Email Contact
