/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
TORONTO, Jan. 20, 2012 /CNW/ - On November 22, 2011 and December 21, 2011, Karmin Exploration Inc. ("Karmin") (TSXV: KAR) issued a news release (together, the "News Releases") announcing that it had entered into a purchase agreement (the "Purchase Agreement") with Alberto Aurelio Arias Dávila (the "Vendor"), a well-known Peruvian mining entrepreneur and an arm's length party, to purchase 100% of the right, title and beneficial interest held by the Vendor in two mining concessions (the "Purchased Mining Concessions") forming a portion of the Cushuro Property located in the department of La Libertad in the Republic of Peru (the "Acquisition").
In addition to the Acquisition, Karmin also announced that it had entered into an option agreement (the "Option Agreement") with the Vendor, which grants to Karmin an irrevocable and exclusive option (the "Option") to purchase from the Vendor 100% (and not less than 100%) of the right, title and beneficial interest in an additional mining concession (the "Option Mining Concession", and together with the Purchased Mining Concessions, the "Cushuro Mining Concessions"), also forming a portion of the Cushuro Property (the "Option Acquisition", and together with the Acquisition, the "Cushuro Acquisition"). The Option Agreement provides Karmin with the right to exercise its option to purchase the Option Mining Concession, at its sole discretion, at any time on or after January 16, 2012 and for a period of one year following such date (the "Option Term").
Pursuant to the Option Agreement, Karmin and the Vendor also agreed to enter into a separate agreement to lease the Option Mining Concession (the "Lease"), providing Karmin with access to the Option Mining Concession during the Option Term. The Lease will be entered into following the receipt of final approval from the TSX Venture Exchange (the "Exchange") in respect of the Cushuro Acquisition, and will have a term ending on the earlier of the date in which the Option Acquisition closes and the expiry of the Option Term.
Please see the News Releases for more information about the Cushuro Acquisition.
As noted in the News Releases, the Cushuro Acquisition constitutes a Reviewable Acquisition under the policies of the Exchange and, accordingly, must be approved by the Exchange. Additionally, the policies of the Exchange require that the shareholders of Karmin approve the issuance of the Cushuro Shares (as defined in the News Releases) to the Vendor, because such issuance will result in the Vendor becoming a Control Person (as defined in the policies of the Exchange). As a result, Exchange policies mandated that trading in the common shares of Karmin be halted pending receipt and review by the Exchange of documentation relating to the Cushuro Acquisition, including a title opinion in respect of the Cushuro Mining Concessions and a technical report (the "Technical Report") prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects.
Trading in the common shares of Karmin has been halted since November 22, 2011 and, as of the date of this news release, trading in the common shares of Karmin continues to be halted. In compliance with the policies of the Exchange, Karmin is issuing this news release to provide its shareholders with an update on the status of the Cushuro Acquisition.
In satisfaction of the Exchange's shareholder approval requirements, as noted above, Karmin has obtained the written consent of shareholders holding over 61% of the common shares that are currently issued and outstanding and has submitted the consents to the Exchange for its review.
Karmin continues to work with the Exchange to satisfy the Exchange's conditions to obtaining final approval of the Cushuro Acquisition.
Pursuant to the Purchase Agreement, Karmin granted the Vendor the right to designate an individual (the "Designated Director") to be included among the nominees to act as directors of Karmin at the next meeting of shareholders of Karmin at which the Board was to be elected. Such meeting was held on Wednesday, January 18, 2012 and Dr. Luis Rodríguez-Mariátegui Canny, the Designated Director, was elected by the shareholders of Karmin at the meeting, such appointment being conditional on the approval of the Exchange and on the closing of the Acquisition.
Closing of the Cushuro Acquisition
Closing of each of the Acquisition, the Option Acquisition and the entering into of the Lease is subject to customary closing conditions, in addition to the requirement to obtain the approval of the Exchange as noted above. Karmin intends to close the Acquisition as soon as possible following receipt of such approvals.
Karmin will continue to issue a news release regarding the status of the Cushuro Acquisition every 30 days following today's date until the Acquisition has closed in accordance with applicable policies of the Exchange. Concurrently with the closing of the Acquisition, Karmin will enter into the Lease with the Vendor. Karmin will also issue a news release if and when it elects to exercise the Option.
Annual and Special Meeting of Shareholders
Karmin is also pleased to announce the results of its Annual and Special Meeting of Shareholders held on January 18, 2012. In addition to the election of Dr. Luis Rodríguez-Mariátegui Canny as described above, the shareholders of Karmin elected David Brace, Larry Ciccarelli, Richard Faucher, Ed Guimaraes and Terence Ortslan to serve as directors of Karmin to hold office until the next annual meeting of shareholders or until a successor is duly elected, unless the office is earlier vacated in accordance with the by-laws of Karmin. The election of each of the directors and each of the other motions considered by shareholders at the meeting were approved by over 99% of the shares voted at the meeting in person or by proxy.
PricewaterhouseCoopers LLP, Chartered Accountants, were reappointed as auditors of Karmin to hold office until the close of the next annual meeting of shareholders and the board of directors were authorized to fix their remuneration as such.
The common shares of Karmin are listed on the Exchange and trade under the symbol "KAR". The principal business of Karmin is to acquire and explore resource properties. Currently, Karmin's main project is located at Aripuanã, Brazil. Karmin owns 30% of the Aripuanã zinc project, one of the largest undeveloped zinc projects in Brazil. Aripuanã covers a complete mineralized massive sulphide district, with five areas of mineralization (Arex, Ambrex, Babacu, Massaranduba and Mocoto) over a 25 kilometre strike length. Karmin also owns 100% of the Aripuanã gold-silver project which includes the gold and silver mineralization associated with the near surface oxidized portions of the massive sulphide deposits.
Disclaimer Relating to Forward-Looking Information
This news release contains forward-looking statements, including those relating to the Cushuro Acquisition and information that are based on the belief of management and reflect Karmin's current expectations. Forward-looking statements include, but are not limited to, possible events and statements. The words "plans," "expects," "is expected," "scheduled," "estimates," "forecasts," "projects," "intends," anticipates," or "believes," or variations of such words and phrases or statements that certain actions, events or results "may," "could," "would," "might," or "will be taken," "occur," and similar expressions identify forward-looking statements. The forward-looking statements and information in this press release include, but are not limited to, information relating to the business plans of Karmin and the Acquisition and the Option Acquisition (including the exercise of the Option, TSX-V approval, shareholder approval and the completion or termination of each of the Acquisition and the Option Acquisition). Such statements and information reflect the current view of Karmin with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.
Such statements are not historical facts. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections in the forward-looking statements will not occur, and that actual performance and results in future periods may differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These assumptions, risks and uncertainties include, among other things, the inability to obtain Exchange approval of the Cushuro Acquisition.
The Cushuro Mining Concessions and the land they relate to are exploration properties only. Accordingly, there are a number of important factors that could cause Karmin's actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors relating to the Cushuro Mining Concessions include, among others, the timing and content of work programs, results of the development of mineral properties, including the Cushuro Mining Concessions, the interpretation of drilling results and other geological data, the uncertainties of resource and reserve estimates, receipt and security of mineral property titles, receipt of licenses to conduct mining activities, project cost overruns or unanticipated costs and expenses, fluctuations in metal prices and general market and industry conditions, changes in national and local government legislation, taxation, controls, policies and regulations, the security of personnel and assets, and political or economic developments in Canada and Peru, operating or technical difficulties in connection with mining or development activities, employee relations, the speculative nature of mineral exploration and development and the risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins and flooding.
Karmin cautions that the foregoing list of material factors is not exhaustive. When relying on Karmin's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Karmin has assumed a certain progression of events which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.
The forward-looking statements contained in this news release are made as of the date of this news release. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. Except as required by law, Karmin disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, Karmin undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed above.
The Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.
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