VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 22, 2012) - PUGET VENTURES INC. ("Puget") (TSX VENTURE:PVS) (the "Company") is pleased to report that it has entered into a strategic partnership with Beijing AXHA Investment Co. ("Anhua") whose parent company is CITIC Anhua Group (Holding by CITIC Group).
Under the terms of a Memorandum of Understanding (the "MOU"), Anhua will arrange for financing and the selection of a major Chinese EPC contractor, agreed upon by Puget Ventures, to develop a bankable feasibility study for the Karakul Cobalt Project ("Karakul") in Altai, Russia and provide subsequent debt financing under a joint venture arrangement.
The Karakul asset, located in a pro-mining region in the Altai Republic in southeastern Russia, is beneficially owned by Pafra Enterprises Company Limited ("Pafra"). As previously announced, Puget is proceeding with its acquisition of all of the issued and outstanding securities of Pafra (the "Pafra Transaction").
"We are very pleased to announce Anhua as our strategic partner. CITIC is a world-class mining finance group with great financial strength and Anhua has specific expertise in the cobalt sector gained from the Dahenglu/Baishan Cobalt Mine in China," commented Erin Chutter, President and CEO of Puget Ventures Inc. "The benefits of this partnership to the Company's shareholders are significant."
Highlights of this strategic partnership under the terms of the MOU, which is subject to, amongst other things, Puget's completion of the Pafra Transaction and the parties entering into a definitive agreement, include:
- Anhua to nominate EPC contractor for the Karakul project with agreement of Puget Ventures.
- Anhua and the EPC contractor to work with a technical and business team from Puget Ventures to develop a Bankable Feasibility Study, subject to a completed scoping level study prepared at the cost of the EPC contractor.
- Anhua to arrange for an off-take agreement for the products of the Karakul Project with a major Chinese processor, subject to the approval of Puget Ventures.
- Anhua to arrange for the full financing for the EPC contract for the Karakul Project.
- Puget Ventures to agree to pledge the mining rights of the Karakul mine or the shares of the company that is holding the mining rights of the Karakul mine against the debt instrument.
- Puget Ventures to issue common share purchase warrants to Anhua based on outcomes of scoping study proposal.
The completion of the Pafra Transaction is subject to various conditions. There is no guarantee or assurance that the Pafra Transaction will be completed.
Erin Chutter concluded in saying, "In developing this tactical union with CITIC Anhua, the Company is laying the foundations for a team best suited to advance the world-class Karakul cobalt assets. This is a significant step forward for Puget Ventures expansion into becoming a leader in the strategic metals sector."
About Puget Ventures Inc. / Global Cobalt Corporation
Upon completion of the Pafra Acquisition, Puget Ventures Inc. will be renamed Global Cobalt Corporation, and will be a Canada-based strategic metals company focused on the development of a new mining region in the Republic of Altai. As first mover into this new jurisdiction, Global Cobalt is positioning itself as a pioneer in an untapped region as the first and only foreign-invested publicly traded mining company to advance mineral projects in Altai. Global Cobalt will leverage the world-class Karakul Project and intends to explore other economically feasible projects held under right-of-first-refusal while aggressively expanding and exploring existing properties to supply the growing demand for cobalt and other strategic metals.
Cautionary Statement on Forward-Looking Information: Certain information contained in this news release, including any information relating to Puget or Global Cobalt's future financial or operating performance may be deemed "forward looking". All statements in this news release, other than statements of historical fact, that address events or developments that Puget expects to occur, are "forward-looking statements." Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "does not expect", "plans", "anticipates", "does not anticipate", "believes", "intends", "estimates", "projects", "potential", "scheduled", "forecast", "budget" and similar expressions, or that events or conditions "will", "would", "may", "could", "should" or "might" occur. All such forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and are subject to important risk factors and uncertainties, many of which are beyond Puget's ability to control or predict. Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to known and unknown risks, uncertainties and other factors that may cause actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Key assumptions upon which Puget's forward-looking statements are based include the following: Puget's ability to complete the Pafra Acquisition; its ability to successfully integrate, explore, develop and operate the Karakul Property; that cobalt prices will not fall significantly; that Global Cobalt will be able to secure new financing to continue its operations on an as-needed basis; that there are no significant changes to applicable laws in the geographic areas in which Global Cobalt will operate; that Global Cobalt will obtain regulatory approvals in a timely manner; the absence of material adverse effects; Global Cobalt's ability to achieve its growth strategy; and that Global Cobalt's operating costs will not increase significantly. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, and unusual or unexpected formations. Forward-looking statements are not guarantees of future performance, and actual results and future events could materially differ from those anticipated in such statements. All of the forward-looking statements contained in this news release are qualified by these cautionary statements. Puget expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise, except in accordance with applicable securities laws.
Neither 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.