KIRKLAND LAKE, ON, Nov. 19 /CNW/ - RJK Explorations Ltd. (RJX.A: TSXV) ("RJK") wishes to announce that it has now entered into formal discussions to negotiate a business arrangement with Holmer Silver Company Ltd. ("Holmer") a private company whose principal asset is its 100% shareholding in Holmer Gold Mines Inc. ("HGMI"). HGMI has been the most active foreign mineral exploration company in Cuba over the last 17 years. One discovery that HGMI has developed is an open pit, silver laterite deposit which has been approved for production by the Cuban government. HGMI has recently updated a Feasibility Study which incorporates a 1999 Rescan Feasibility Study and a November, 2003 NI 43101 report. The 2003 NI 43101 report covers the high grade core of one silver deposit within a 16 km long silver belt held by HGMI, with numerous other mineralized zones present. HGMI is also pursuing the acquisition of additional concessions in Cuba, containing known gold deposits, from GeoMinera, S.A., the Cuban stateowned mining company.
The business arrangement being discussed would entail Holmer becoming a wholly-owned subsidiary of RJK for a combination of cash and shares of RJK with that ratio yet to be determined. It is also the intention of both parties that approximately 2/3 of that consideration would be deferred and only payable out of any net revenues from any HGMI asset that went into production and only after all capital costs and financing charges have been recovered.
An agreement for this business arrangement between RJK and Holmer would only proceed if Holmer is able to conclude a proposed production financing for the silver deposit in Cuba. Over the last year, RJK has been introducing Holmer to a number of international funding sources and recently, Holmer received a firm offer for production financing which is now going through a final approval process. If this proposed financing is completed, RJK would then move forward to conclude the business arrangement with Holmer.
It is anticipated that with this arrangement, RJK would also be absorbing all of HGMI's personnel, its operating capabilities and infrastructure in Cuba along with the many important relationships that HGMI has developed in Cuba over the last 17 years within the various levels of the Cuban government and the Cuban mining industry. RJK intends to work with HGMI to bring to Cuba many of the modern exploration techniques which have not yet been employed in that country and to apply new modeling methods in a search for massive polymetallic SEDEX deposits and to follow up on Kuroko style VMS deposits known to exist in the central part of Cuba.
Completion of these discussions is subject to a number of conditions, including, but not limited to, Holmer completing the funding, RJK and Holmer entering into a formal agreement and receipt of all required regulatory approvals.
Forward Looking Statements: This news release contains certain forward-looking statements. These forward-looking statements are subject to a variety of risks and uncertainties beyond RJK's ability to control or predict which could cause actual events or results to differ materially from those anticipated in such forward-looking statements. Although RJK believes that the assumptions inherent in the forward-looking statements are reasonable, undue reliance should not be placed on these forward-looking statements.
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SOURCE RJK Explorations Ltd.
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