VANCOUVER, Feb. 1 /CNW Telbec/ - Continuum Resources Ltd (TSXV:CNU)
announces that it has entered into a Letter of Intent ("LOI") with Mr. Raul
Diaz, Continuum's former General Manager in Mexico, for the sale of
Continuum's 70% interest in the claims constituting the Natividad Mine (the
"Natividad Property"), along with a further 100% of the surrounding Natividad
properties wholly-owned by Continuum (collectively the "Surrounding
Properties"). All of these properties will be vended into a private Mexican
company ("Privco") to be formed by Mr. Diaz. The key terms of the agreement
are as follows:
i) On or before February 29, 2008, Privco shall enter into a definitive
agreement to acquire Continuum's 70% interest in the Natividad
Property and 100% of the Surrounding Properties.
ii) Privco shall grant Continuum a 1.4% net smelter royalty (NSR) on
future production on the Natividad Property, provided however that
Privco, at its sole discretion, may purchase such 1.4% NSR at any
time upon payment to Continuum of USD$3,500,000.
iii) Continuum shall grant Privco the sole and exclusive right and option
to earn a 100% undivided interest in the Surrounding Properties. As
consideration for this right, Privco must incur minimum exploration
expenditures totaling USD$600,000 over three years.
iv) Upon completion of the minimum exploration requirements described
above, Privco shall grant Continuum a 2% NSR on any future
production on the Surrounding Properties. Privco, at its sole
discretion, may purchase this NSR at any time from Continuum for a
payment of USD$5,000,000.
v) Privco, upon exercise of the option, shall issue to Continuum such
number of common shares of Privco having a value equivalent to the
total expenditures incurred by Continuum in acquiring and
maintaining the Surrounding Properties, but excluding the Natividad
Regarding the sale of the Natividad Property, Robert McMorran, CFO of
Continuum, stated: "Over the past several weeks the Board has reviewed its
options with respect to maximizing shareholder value, including a review of
the status of all of the properties in the Company's mineral portfolio.
Notwithstanding the exploration potential at Natividad, it was evident to the
Board that the Company's shareholders were best served at this time by the
Company focusing its exploration efforts on other properties it holds in
Oaxaca, Mexico. Of immediate interest are the Tres-Hermanas and Lachiguiri
properties which the Company intends to actively explore during 2008."
Continuum recently reactivated both the Tres-Hermanas and Lachiguiri
projects (see news releases of September 17, 2007 and September 24, 2007) and
exploration activities are ongoing.
Continuum is currently exploring 7 separate gold-silver projects in the
state of Oaxaca, comprising approximately 125,000 hectares. Continuum is also
a 24% joint venture partner with Fortuna Silver Mines Inc. (TSXV: FVI) on the
San Jose silver project, on which drilling continues to expand on the resource
estimate previously announced by the Company on March 12, 2007.
On behalf of the Board of Continuum Resources Ltd.
"Warren M. McIntyre"
Warren M. McIntyre, Corporate Secretary and Director
The TSX Venture Exchange has not reviewed and does not take
responsibility for the adequacy or accuracy of this release.
For further information:
For further information: Renmark Financial Communications Inc.: Barry
Mire: firstname.lastname@example.org; Dan Symons: email@example.com,
(514) 939-3989, Fax: (514) 939-3717, www.renmarkfinancial.com