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TORONTO, Sept. 28, 2012 /CNW/ - Vena Resources Inc. ("Vena" or the "Company") (TSX: VEM, LIMA: VEM, Frankfurt: V1R, OTC-BB: VNARF, Xetra®: V1R.DE), announces that, further to the Company's press release of September 24th, the Company has signed a binding share purchase agreement, whereby it has agreed to sell its 70% interest in Azulcocha Mining S.A. ("Azulcocha") and assign an intercompany loan to Catalina Huanca Sociedad Minera S.A.C., an affiliate of Trafigura Beheer B.V. ("Trafigura").
In accordance with the terms of the share purchase agreement and a related assignment agreement, Trafigura has agreed to pay an aggregate purchase price of US$5 million to Vena as well as a 10% Net Profit Interest ("NPI") on future production, such NPI can be purchased for an additional US$2 million at any time. Upon completion of the transaction, the Company will not bear any further costs in connection with the future development and operation of Azulcocha (including previously disclosed accrued liabilities aggregating approximately US$20 million).
The purchase price will be payable to Vena in cash as follows: (i) US$2.5 million on the satisfaction of certain customary closing conditions and (ii) US$2.5 million in 23 consecutive monthly installments of US$100,000 commencing on October 1, 2013 and a final installment of US$200,000.
The Company's board of directors has reviewed and approved the sale of Azulcocha to Trafigura. Vena retains 100% ownership over the significant exploration areas nearby the milling operations. Vena intends to continue its efforts to advance its extensive exploration portfolio and intends to add fully permitted precious metals mining operations and scale their production profile as soon as possible.
Juan Vegarra, Chairman and CEO of Vena Resources stated: "The price of Zinc has stubbornly remained under $1/pound although analysts' expectations remain positive. Under that reality and the amount of current liabilities, the board decided to look for strategic alternatives for the Company's portfolio and to focus on advancing our precious metals assets. The sale terms reached with Trafigura enables Vena to clean up its balance sheet and provides needed working capital to advance the Company's gold/silver operations, retain the exploration upside near the mill at Azulcocha and retain a cash upside on the Azulcocha Zinc mine through the 10% NPI which could become significant when the price of Zinc recovers as expected by analysts."
The TSX does not accept the responsibility for the adequacy or accuracy of this release.
Forward Looking Statements -The forward-looking statements included in this press release are based on certain key expectations and assumptions made by Vena. Although Vena believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Vena can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. In addition to other risks that may affect the forward-looking statements in this press release are those set out in Vena's management discussion and analysis of the financial condition and results of operations for the year ended December 31, 2011 and the six month period ended June 30, 2012 as well as the Company's Annual Information Form. The forward-looking statements contained in this press release are made as of the date hereof and Vena undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
SOURCE: Vena Resources Inc.
For further information:
For further information on Vena Resources, please visit the Company website at www.venaresources.com, its Facebook page or contact: Juan Vegarra - Chairman & CEO - (416) 364-7739, ext. 120 or [email protected].