VANCOUVER, Jan. 23, 2012 /CNW/ - Gitennes Exploration Inc. (TSXV-GIT) announces that it has signed a Memorandum of Understanding (the "MOU")
with AndeanGold Ltd. that grants AndeanGold the right to acquire an
additional 40% interest in the Urumalqui Project. This right is in
addition to the existing Option Agreement dated April 21, 2010 (which will remain in effect) that grants AndeanGold an option to earn a 60% interest in the
The MOU contemplates that a formal Agreement will be entered into
between Gitennes and AndeanGold so that AndeanGold may acquire indirect
control of the Peruvian subsidiary that is the titleholder of the
Project's concessions once it has vested its option to earn 60%. If
AndeanGold should elect not to exercise the second option to increase
its interest in Urumalqui to 100% then control of the subsidiary will
remain with Gitennes,
Also, should AndeanGold elect to not meet the terms of the original
option to acquire a 60% interest then both the original option and this
second option will terminate and ownership of Urumalqui will revert to
Gitennes and AndeanGold will have no residual interests.
Terms of the MOU require that AndeanGold will make the following firm
and optional payments :
On Signing the MOU
On Signing the formal Agreement
On or before 6 months from signing the Agreement
On or before 12 months from signing the Agreement
On or before 18 months from signing the Agreement
On or before 24 months from signing the Agreement
On or before 30 months from signing the Agreement
If AndeanGold chooses to exercise both options then Gitennes will be
entitled to a 1% Net Smelter Returns Royalty on the Project with total
payments limited to $1,250,000.
This transaction is subject to acceptance by the TSX Venture Exchange
and, if required, the approval of Gitennes' shareholders.
Terms of original Option Agreement:
In April 2010 Gitennes signed an option agreement with AndeanGold
whereby the Company granted it the right to earn a 60% interest in the
Urumalqui project. In order to earn its interest AndeanGold must spend
$3,000,000 in qualifying exploration expenditures on the project over a
four-year term, which shall include a minimum of 3,000 metres of
drilling by the end of the second year and 7,000 metres of cumulative
drilling by the end of the third year. AndeanGold must also issue
80,000 shares to the Company in four tranches of 20,000 shares each.
Gitennes may elect to receive cash in lieu of shares, with the amount
not to exceed $25,000, $50,000 and $100,000 with respect to the first,
second and third year anniversary date payments, respectively. If the
market value of the shares on the respective payment dates exceeds the
maximum cash payment amount on such date, the difference will be paid
in equivalent shares.
Upon AndeanGold exercising the option a joint venture will exist in
which ownership will be 60% AndeanGold and 40% Gitennes. Subsequent
activities will be funded on a 60:40 basis; failure to contribute will
result in pro rata dilution until the interest is reduced to 10% at which time the
non-contributing party converts to a 2% Net Smelter Returns Royalty.
Information about all of Gitennes' projects may be found by visiting www.gitennes.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
DISCLAIMER: This news release includes certain statements, other than
historical information, that may be deemed "forward-looking
statements". All statements in this release, other than statements of
historical facts, including, without limitation, statements regarding
future plans and objectives of the companies are forward-looking
statements that involve various risks and uncertainties. Although
Gitennes believes the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are not
guarantees of future performance and actual results or developments may
differ materially from those in the forward-looking statements.
Forward-looking statements are based on a number of material factors
and assumptions. Factors that could cause actual results to differ
materially from those in forward-looking statements include general
economic, market or business conditions, and other risks detailed
herein and from time to time in the filings made by the companies with
securities regulators. Mineral exploration and development of mines is
an inherently risky business. Accordingly the actual events may differ
materially from those projected in the forward-looking statements.
Historical information necessarily is not current and is provided for
your reference only. No warranty whatsoever is made that any of the
historical information is accurate, precise, or up-to-date. For more
information on Gitennes and the risks and challenges of their
businesses, investors should review their annual filings that are
available at www.sedar.com.
This press release does not constitute an offer to sell or a
solicitation to buy any of the securities of Gitennes in the United
SOURCE Gitennes Exploration Inc.
For further information:
604 682 7970