VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 12/18/14 -- Mediterranean Resources Ltd. (the "Company") (NEX: MNR.H) (OTC PINK: MNRUF) is pleased to announce that the Company's Turkish subsidiary, Akdeniz Resources Madencilik A.S. ("Akdeniz"), the owner of the Company's flagship Yusufeli property, has entered into a Letter of Intent dated December 17, 2014 (the "LOI") with Ceka Insaat ve Sanayi Ticaret A.S., a private Turkish corporation ("CEKA"), to form a joint venture on the Yusufeli property in the province of Artvin, Turkey.
Robert Abenante, the Company's CEO, states: "We are very pleased with the proposed joint venture with CEKA. The joint venture will allow the Company to once again be in a position to advance the development of its flagship asset in Turkey. The agreement will breathe life back into the Company and enable it to achieve development milestones without suffering significant dilution in the parent company. Several years of idle development on the asset has been a driving factor in the Company's spiraling market cap. This agreement provides the capital required to fund day to day operations in the subsidiary, maintain the licenses in good standing and push ahead with critical and timely development milestones for the project. The agreement gives the Company an opportunity to retain up to an 80% interest in the project while it advances the property on an aggressive development timeline."
The key terms of the LOI include the following:
-- Subject to exchange approval, the Company has agreed to transfer 20% of
the issued and outstanding shares in the capital of Akdeniz to CEKA in
consideration for CEKA advancing $2 million to the Company to be used to
advance the Yusufeli property as follows:
-- payments for office, salaries and other necessary payments for the
day-to-day business operations of Akdeniz;
-- payments such as taxes and social security payments that Akdeniz is
obliged to pay according to the Turkish laws and regulations;
-- payments to keep the licenses in good standing until production;
-- obtaining DSI and relevant ministry and commission approval
necessary to obtain permits and continue development until
production;
-- completing a Prefeasibility Study;
-- completing a Tac-Corak Gold Mine Project EIA Report; and
-- obtaining an Environmental Impact Assessment Permit.
-- Subject to exchange approval, the Company is required to raise gross
proceeds in a financing of at least $1.5 million on or prior to January
31, 2015. In the event that the Company is not successful in raising
such amount, CEKA will have the right to earn an additional 29% of
Akdeniz (49% in the aggregate). This additional interest will be earned
through CEKA's continued funding of the development of Akdeniz from
February 1, 2015 through to May 31, 2015.
-- The Company is required to raise gross proceeds in a subsequent
financing of at least an additional $3.0 million on or prior to May 31,
2015 ($4.5 million in the aggregate). In the event that the Company is
not successful in raising such amount, CEKA will have the right to
purchase the remaining outstanding shares in Akdeniz that it does not
already own in consideration for the payment of $5 million and the grant
of a 5% net smelter returns royalty to the Company with respect to the
Yusufeli property. The sale of the remaining interest in Akdeniz would
be subject to exchange policies and receipt of shareholder approval from
the shareholders of the Company in accordance with applicable corporate
laws.
The parties have agreed to enter into a definitive joint venture agreement which the Company anticipates will be done on or prior to January 31, 2015.
Signed on behalf of the Board of Directors.
Robert Abenante, Chairman, President & CEO
Neither the NEX, 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.
This news release contains forward-looking information, which involves known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from current expectations such as the ability of the Company to close the financings mentioned above, the ability of the Company to obtain shareholder and exchange approval for the transaction, and the ability of the Company and its joint venture partner to advance the property. Important factors - including the financial and commodities markets, government approvals and the mining industry in general could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time on SEDAR (see www.sedar.com). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Contacts:
Robert Abenante
604-669-3397
www.medresources.ca
