SUDBURY, ON, June 27, 2012 /CNW/ - Canadian Arrow Mines Limited (CRO: TSX-V) (the "Company") is pleased to report that it has entered into an option agreement (the "Agreement") with San Gold Corporation (SGR: TSX-V) ("San Gold") whereby the Company has agreed to grant San Gold the option to acquire an 80% undivided interest in all precious metals including, but not limited to, gold and silver but specifically excluding platinum and palladium (the "Precious Metals"), contained on it's current properties. The rights to all other mineral resources including, but not restricted to, base metals, platinum and palladium remains with Canadian Arrow.
Mr. Kim Tyler, President, said, "We are very pleased that San Gold has agreed to invest exploration expenditures in our mineral properties and in our Company directly through the equity placement. This represents an aggregate $2,000,000 investment in the Company. Many unexplored exploration targets and geophysical anomalies on our properties are prospective for both base metal and precious metal potential."
To maintain the Agreement in good standing and earn an 80% interest in the Precious Metals contained on the properties, San Gold has agreed to, among other things, purchase 5,000,000 units of the Company at a price of $0.10 per unit. Each unit will be comprised of one common share in the capital of the Company and a ½ of one share purchase warrant. Each full warrant will entitle San Gold to purchase one common share in the capital of the Company for an exercise price of $0.20 for a period up to two years from the date of the issuance of the warrant. The securities issued in connection with the unit offering are subject to a four month hold period that will expire on October 26, 2012. In addition San Gold is also required to incur an aggregate $1,500,000 in expenditures on the properties graduated over four years from the date of execution of the Agreement. Upon completion of San Gold's obligations under the Agreement, San Gold will earn an 80% interest in all Precious Metals contained on the properties and a joint venture will be formed between San Gold and the Company. Initial ownership in the joint venture will be San Gold 80% and Canadian Arrow 20%.
Kelex Production Update:
Pre-production work has been progressing well on the Kelex project. De-watering of the West and Central West pits is now complete. Overburden stripping in advance of production is approximately 50% complete.
The information in this release was prepared under the direction of Mr. R. Kim Tyler, P. Geo., President of the Company, a Qualified Person as defined by NI 43-101.
About Canadian Arrow Mines:
The Company is resuming production on its past producing Alexo nickel complex located in the Abitibi nickel district east of Timmins Ontario. The Alexo and Kelex mines have historically produced 87,000 tonnes averaging 3.06% nickel from both underground and open pit mining. The Company is also developing its flagship Kenbridge nickel/copper/cobalt project located near Kenora, Ontario. Exploration potential exists along strike and at depth on both projects.
Additional information relating to Canadian Arrow is available on SEDAR at www.sedar.com
This press release may contain "forward-looking statements" within the meaning of the Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements are made as of the date of this press release and the Company does not intend, and does not assume, any obligation to update these forward-looking statements.
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.
For further information:
visit the website at www.canadianarrowmines.ca, or contact Mr. R. Kim Tyler President and Director toll free, 1-877-673-5462.