VANCOUVER, Feb. 1 /CNW/ - Nanika Resources Inc. (TSX-V: NKA and FSE: C7X) announces that today its Joint Venture subsidiary, Canada Molybdenum Corp. ("CMC"), today received a Default Notice on the Lucky Ship Molybdenum Property Option Agreement from the two underlying property Optionors.
The Default Notice states, in part, that the property Optionors were to receive an $80,000 payment by January 31, 2010. It acknowledges that $40,000 was received from Nanika Resources Inc. and further states that Canada Molybdenum Corp. ("CMC") has thirty days in which to pay the remaining $40,000, failing which the Option, as that term is defined in the Lucky Ship Option Agreement, will terminate.
On April 1, 2009, the Company entered into a joint venture agreement with Korean parties whereby Canada Molybdenum Corp., a British Columbia company, was formed to carry out joint venture operations for the further exploration and development of the Lucky Ship Molybdenum Property. Based upon the terms of the joint venture agreement, Nanika owns a 60% Lucky Ship Joint Venture interest and the Korean parties own in aggregate a 40% Lucky Ship Joint Venture interest.
Pursuant to the terms of the joint venture agreement the Korean parties have an option to acquire a 51% in aggregate Lucky Ship Joint Venture interest which is exercisable by arranging for a financing (the "Junior Financing") for CMC before March 30, 2011 and then pay all reasonably estimated exploration costs in order to prepare the Feasibility Report for the Lucky Ship Molybdenum Property. The Korean parties also have an option to acquire a 60% in aggregate Lucky Ship Joint Venture interest which is exercisable by arranging for a financing (the "Senior financing") for CMC within 30 months from the date of the Feasibility Report to obtain all funds required to put the Lucky Ship Molybdenum Property into commercial production. As of the date of this news release, neither option has been exercised.
Once the Junior Financing is completed, pursuant to the terms of the Joint Venture Agreement Nanika is to be reimbursed for exploration expenses of $3,500,000 previously incurred by Nanika. Prior to the Junior Financing, the Korean parties agreed to provide a loan of $500,000 to CMC, of which $250,000 was paid on April 27, 2009 (and, in turn, then loaned to Nanika pursuant to the terms of the Joint Venture Agreement) and a further $250,000 was due on October 27, 2009 (not completed).
Since the initial terms of the Joint Venture Agreement have not been completed and since the Korean parties have not paid, either directly or through CMC, $40,000, being the balance of the property payment which was due to be paid by January 31, 2010, Nanika's management is reviewing the status of the Lucky Ship joint venture.
About Nanika Resources Inc.
Nanika Resources Inc. is a TSX Venture listed mineral exploration and development company focusing on the advancement of its mineral properties, all of which are located within Canada.
On Behalf of the Board
James D. Jacuta
Chairman, President and CEO.
SOURCE NANIKA RESOURCES INC.
For further information: For further information: Doug Kerr, Telephone: (604) 638-0699, Toll Free: 1-866-580-0699, http://www.nanikaresources.com