Vulcan Minerals Inc. Converts Working Interest in the Bay St. George Project to a Royalty Interest and Cash
![Vulcan Minerals Inc. Converts Working Interest in the Bay St. George Project to a Royalty Interest and Cash](https://www.minenportal.de/media/goldseiten-news.jpg)
Over the last three years, the Vulcan-Investcan joint venture has explored the property resulting in a tight sandstone gas discovery (Red Brook - Robinsons) and the continued delineation of the shallow tight oil deposit at Flat Bay. Substantial investment will be required in order to assess whether either of these discoveries have commercial potential. In the interest of avoiding drastic equity dilution of the company that would be required in the current existing market to fund further work on the project, the company has decided to convert its participating interest into a carried royalty interest which provides it with a no risk, no expense exposure to any production that ultimately might be derived from the project. As well, the $2.5 million cash payment will allow the Company to search for new projects where it can continue to utilize its petroleum and mineral exploration expertise.
Commenting on the transaction Patrick Laracy, President, said, "Vulcan has executed its exploration plan in the Bay St. George basin over the last several years and has made two early stage unconventional discoveries which will require significant investments to determine whether they have commercial viability. This will involve development type evaluations and financial commitments which are beyond the exploration expertise and capacity of the company. Therefore, after much deliberation the Board decided it is in the best interests of the company to convert its ownership to a carried royalty and use the $2.5 million cash to generate other projects which are more within the scope and skillset of the company. We appreciate Investcan's desire to continue to invest in the Bay St. George project."
The Company currently maintains petroleum interests in western Newfoundland through its minority stake in the Parsons Pond play and a 19% shareholding in NWest Energy Corp. which recently conducted a transaction on its Green Point tight oil play as reported by news release dated January 17, 2012. The Company also maintains a 30% participating interest in exploration license EL 1107 offshore Labrador. The Company also owns mineral interests including the potash /salt mineral rights in western Newfoundland and the TL nickel prospect in Labrador.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. The statements made in this News Release may contain certain forward-looking statements. Actual events or results may differ from the Company's expectations. Certain risk factors may also affect the actual results achieved by the Company.
There can be no assurance that forward-looking information will prove to be accurate. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from any conclusions, forecasts or projections described in the forward-looking information. Accordingly, readers are advised not to place undue reliance on forward-looking information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information, whether as a result of new information, future events or otherwise.
Shares Issued: 57,526,129
Contact
Vulcan Minerals Inc.
Patrick J. Laracy, President
Gerri A. MacNeil, Business Manager, Investor Relations
709-754-3186
info@vulcanminerals.ca
www.vulcanminerals.ca