Vancouver, British Columbia, June 22, 2011 - Marifil Mines (TSXV:MFM), is focussed in Argentina, which possesses some the world's most prolific new gold and silver discoveries. Over the years, the company has amassed an impressive portfolio of more than 20 precious and base metals properties, along with various non-metal properties such as oil, potash, and lithium.
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The company has been successfully completing joint ventures on its properties and expects to take in more than $1 million in cash and more than $1 million in marketable securities during 2011. In addition, over the next few years Marifil's partners will be spending almost $20 million in direct property costs, with some partners also providing pre-feasibility and feasibility reports.
The newly signed definitive letter of intent with Saccharum Energy Corp, symbol SHM on the TSX Venture Exchange, involving 3 significant potash properties in Argentina continues this trend. These properties are known as the K-2, K-3 and K-4
As this is a fairly complex agreement, we'll discuss only the highlights and refer you to Marifil's website for the complete details.
In order to earn up to a 70% interest in the 3 properties, Saccharum, must over three years:
- pay $1,500,000 in cash
- pay up to 9,000,000 shares of Saccharum Energy
- perform a minimum of $12 million in work programs
On the K-2 property, Marifil will retain a 1.5% net smelter royalty, which Saccharum can purchase for $15 million.
On the K-3 and K-4 properties, Marifil will retain a 3% net smelter royalty, but following completion of a 43-101 report, Sacchurum will have a 30 day window to purchase the royalty for each property for 2 million shares each. Marifil shall also have a 30 day put option right to sell such royalty for 2,000,000 shares.
Marifil and Saccharum have agreed to incorporate all of these terms into a binding Joint Venture agreement before July 15, 2011.
John Hite, Marifil's President, remarked, "The 3 properties have a combined total of 200,648 hectares making this one of the largest potash holdings in Argentina. Our work has identified an abandoned oil well hole on the K-3 property which hit 4.5 metres grading 32 to 34% potassium chloride at a depth of 221.5 metres. This high grade zone, located at shallow depth will be an ideal target for the early drilling. This shallow zone may be amenable to low cost underground mining. Our geologists have designed a drill program to test this zone first. Saccharum agrees with this strategy and we will begin as quickly as possible to test this important target".
Approximately 72 kilometres to the southwest of Marifil's K-3 and K-4 properties, Brazil based, Vale, the world's second-largest diversified mining company by capitalization, is expected to invest around $5.5 billion on development of the Rio Colorado potash mine, as well as construction of a railroad and an electric power plant.
The demand for potash in South America should remain strong as nearby Brazil, the world's third-largest potash consumer, imports 90% of its potash requirements. Industry experts are forecasting a significant growth in demand for fertilizers over the next decade, with Potash prices expected to reach $600 a tonne by 2012, from a current spot price of $510 to 540.
Marifil currently trades at $0.31 per share, and with only 54 million shares outstanding, is capitalized at less than $17 million dollars.
For a more information on Marifil Mines please visit their website at www.marifilmines.com , phone 604-684-4743 ext 243 or email Hugh Oswald at hugh@ascentacapital.com.
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