Symbol: CNG - TSX.V
VANCOUVER, Sept. 30 /CNW/ - Mr. Ray Paquette is very pleased to announce that after several months of negotiations Canadian Mining has entered into an option agreement dated effective September 28, 2009, with Mayen Minerals Ltd. (TSX-V: MYM.P) pursuant to which Mayen was granted an option to earn up to an undivided 60% interest in and to Canadian Mining's "Raquel 3" and "Raquel 3B" project (the "Assets") located in Sonora, Mexico (the "Proposed Transaction"). The Option was granted by Canadian Mining through its wholly-owned Mexican subsidiary, Canmin Mexico S.A. de C.V. to Mayen through its wholly-owned Barbados subsidiary, Minmay Corp. ("Minmay").
Pursuant to the terms of the Option Agreement, Mayen (through Minmay) has the option to acquire up to a 60% interest in the Assets by expending a total of US $1,400,000. Minmay will earn a 25% undivided interest in the Assets by incurring exploration expenditures of not less than US$300,000 on the Property on or before the 6th month of Exchange acceptance of the Option Agreement (the "Effective Date"). Upon exercise of the 25% interest, Minmay will have the option to earn a further 25% interest in the Assets for a total undivided interest of 50% by incurring additional exploration expenditures on the Property of not less than US$600,000 on or before the 18th month anniversary of the Effective Date. Upon exercise of the 50% interest, Minmay will have the option to earn a further 10% undivided interest in the Assets for a total undivided interest of 60% by incurring additional exploration expenditures on the Property of not less than US$500,000 on or before the 24th month anniversary of the Effective Date. Minmay will have the right to accelerate the foregoing exploration expenditures and thereby earlier earn its interest in the Assets.
The Property is subject to a 2% net smelter return royalty (the "NSR") in favour of Canadian Mining. After the exercise of the 60% interest, Minmay will have the right at any time to purchase 1% of the NSR for a cash payment to Canadian Mining of US$200,000 and the remaining 1% of the NSR for a cash payment to Canadian Mining of US$1,000,000.
Upon Mayen earning its final interest in the Assets, Minmay and Canmin will enter into a joint venture agreement for the continued development of the Property. Each party's interest in the joint venture will be pro-rata to their respective interest in the Assets and will be subject to dilution for non-contribution.
A finder's fee will be payable by Canadian Mining in connection with the Option Agreement, within the limits prescribed by the policies of the Exchange. Completion of the Proposed Transaction is subject to the approval of the Exchange.
The mineral concessions Raquel 3 and Raquel 3B are located in the prolific mining district of Alamos in Sonora, Mexico and consist of two claim blocks comprising approximately 10,927 hectares (the "Property"). The Property is accessible by a well maintained gravel road from the town of Alamos approximately 45 kilometers to the south.
The Property contains at least one skarn related mineralized zone that was mined by Servicios Industriales Penoles, S.A. de C.V. during the 1980s (the "El Gochico Mine"). The El Gochico Mine is a silver/zinc/copper/lead skarn deposit.
Canadian Mining completed a work program over the Raquel 3 portion of the Property as recommended in the National Instrument 43-101 ("NI 43-101") compliant technical report dated April 2, 2008 (the "Technical Report"), a copy of which is available under Canadian Mining's SEDAR profile at www.sedar.com. Mayen is in the process of finalizing an updated NI 43-101 technical report for the Property.
In the fall of 2008 and the spring of 2009 Canadian Mining completed extended grid surveys and several 3D Induced Polarization / Resistivity Surveys which located three large geophysical anomalies. The reports in their entirety are available on Canadian Mining's web site www.canadianmining.ca
Canadian Mining looks forward to working with Mayen and their experienced Board of Directors including R.A. Bruce McDonald, Bruno Arnold and Robert J. Atkinson and soon to be joined by Dennis A. van Dyke and R. Michael Garvey. The Mayen team has years of success in business, finance and the resource sector.
On behalf of the Board
Ray Paquette CEO
Neither 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.
SOURCE Canadian Mining Company Inc.
For further information: For further information: visit www.canadianmining.ca