Mayen Minerals Ltd.
TSX VENTURE : MYM

Mayen Minerals Ltd.

September 29, 2009 09:00 ET

Mayen Announces Agreement in Principle for Qualifying Transaction

VANCOUVER, BRITISH COLUMBIA-(Marketwire - Sept. 29, 2009) - MAYEN MINERALS LTD. (TSX VENTURE:MYM.P) ("Mayen") announces that it has entered into an option agreement (the "Option Agreement") dated effective September 28, 2009, with Canadian Mining Company Inc. ("Canadian Mining") pursuant to which Mayen was granted an option (the "Option") to earn up to an undivided 60% interest in and to Canadian Mining's "Raquel 3" and "Raquel 3B" project (the "Assets") located in Sonora, Mexico (the "Proposed Transaction"). The Option was granted by Canadian Mining (through Canadian Mining's wholly-owned Mexican subsidiary, Canmin Mexico S.A. de C.V.) to Mayen (through Mayen's wholly-owned Barbados subsidiary, Minmay Corp. ("Minmay")). Pursuant to the terms of the Option Agreement, Minmay will have the right to assign the Option to a yet to be incorporated wholly-owned Mexican subsidiary of Mayen.

Mayen is a capital pool company and intends for the Proposed Transaction to constitute its Qualifying Transaction as such term is defined in the policies of the TSX Venture Exchange (the "Exchange"). The Proposed Transaction is an arm's length transaction and upon completion of the Proposed Transaction, Mayen expects to be a Tier 2 Mineral Exploration Issuer.

Canadian Mining is a publicly traded corporation existing under the laws of Alberta and trades on the Exchange as a Tier 2 Mineral Exploration Issuer under the symbol "CNG".

Description of the Property

The mineral concessions underlying the Assets are located in the municipality of Alamos in Sonora, Mexico and consist of two claim blocks comprising approximately 10,927 hectares (the "Property"). The Property is accessible by a well maintained gravel road from the town of Alamos approximately 45 kilometers to the south.

Canadian Mining completed a work program over the Raquel 3 portion of the Property as recommended in the National Instrument 43-101 ("NI 43-101") compliant technical report dated April 2, 2008 (the "Technical Report"), a copy of which is available under Canadian Mining's SEDAR profile at www.sedar.com. The Technical Report was prepared by Marvin A. Mitchell, P. Eng., Canadian Mining's "Qualified Person" for the purposes of NI 43-101. Mayen is in the process of finalizing an updated NI 43-101 technical report for the Property.

All geological information provided in this press release, including all information on the Property, has been provided by management of Canadian Mining and has not been independently verified by Mayen.

Pursuant to the terms of the Option Agreement, Mayen (through Minmay) has the option to acquire up to a 60% Interest in the Assets. Minmay will earn a 25% undivided interest in the Assets (the "25% Interest") by incurring exploration expenditures of not less than US$300,000 on the Property on or before the 6th month of Exchange acceptance of the Option Agreement (the "Effective Date"). Upon exercise of the 25% Interest, Minmay will have the option to earn a further 25% interest in the Assets (the "50% Interest") (for a total undivided interest of 50%) by incurring additional exploration expenditures on the Property of not less than US$600,000 on or before the 18th month anniversary of the Effective Date. Upon exercise of the 50% Interest, Minmay will have the option to earn a further 10% undivided interest in the Assets (the "60% Interest") (for a total undivided interest of 60%) by incurring additional exploration expenditures on the Property of not less than US$500,000 on or before the 24th month anniversary of the Effective Date. Minmay will have the right to accelerate the foregoing exploration expenditures and thereby earlier earn its interest in the Assets.

The Property is subject to a 2% net smelter return royalty (the "NSR") in favour of Canadian Mining. After the exercise of the 60% Interest, Minmay will have the right at any time to purchase 1% of the NSR for a cash payment to Canadian Mining of US$200,000 and the remaining 1% of the NSR for a cash payment to Canadian Mining of US$1,000,000.

Upon Mayen earning its final interest in the Assets, Minmay and Canmin will enter into a joint venture agreement for the continued development of the Property. Each party's interest in the joint venture will be pro-rata to their respective interest in the Assets and will be subject to dilution for non-contribution.

A finder's fee will be payable by Mayen in connection with the Option Agreement, within the limits prescribed by the policies of the Exchange.

Private Placement

Concurrent with the closing of the Proposed Transaction, Mayen expects to complete a nonbrokered private placement (the "Offering") of up to 625,000 common shares in the capital of Mayen (the "Shares") at a price of $0.40 per Share, or such greater price as the Board of Directors may determine. It is anticipated that the gross proceeds from the Offering will be up to $250,000.

The Shares will be made available by way of private placement exemption to accredited investors (as such term is defined in National Instrument 45-106 - Prospectus and Registration Exemptions) in Canada and in certain jurisdictions outside of Canada pursuant to applicable prospectus and registration exemptions.

The net proceeds from the Offering will be used by Mayen to complete a work program with respect to the Property and for general working capital expenses.

Closing of the Offering is subject to a number of conditions, including the receipt of all necessary corporate and regulatory approvals, including approval from the Exchange. All securities issued in connection with the Offering will be subject to a statutory hold period of four A finder's fee may be payable by Mayen in connection with the private placement, within the limits prescribed by the policies of the Exchange.

Board of Directors and Management

Upon completion of the Proposed Transaction, it is anticipated that Dr. David V. Kason (an existing Director of Mayen) will step down from the Board of Directors and that Mayen will create one additional Board of Director position.

It is anticipated that upon completion of the Proposed Transaction that R.A. Bruce McDonald, Bruno Arnold and Robert J. Atkinson will retain their respective Board of Director positions with Mayen and that Dennis A. van Dyke and R. Michael Garvey will fill the vacant and the proposed newly created Board of Director position respectively.

Please refer to Mayen's prospectus dated September 26, 2007 and filed on SEDAR at www.sedar.com for detailed backgrounds of R.A. Bruce McDonald, Bruno Arnold and Robert J. Atkinson. The following is a summary of the credentials for the proposed new members of the Board of Directors:

Dennis A. van Dyke holds a law degree from Queen's University (Kingston, Ontario, Canada) and was a practicing corporate and commercial lawyer from 1972 to 1985. In addition to his legal experience, Mr. van Dyke brings with him over 35 years of corporate finance experience. Mr. van Dyke is currently employed in the private sector as a business and financial consultant in the resource sector.

R. Michael Garvey holds a degree in chemical engineering from the University of Alberta (Edmonton, Alberta, Canada) and a Masters of Business Administration from the University of Western Ontario (London, Ontario, Canada). Mr. Garvey brings with him over 40 years of mining and corporate finance experience and is currently employed in the private sector as a mining consultant.

Following the completion of the Proposed Transaction, it is anticipated that Bruno Arnold will remain Mayen's Chief Financial Officer and it is anticipated that R.A. Bruce McDonald will step down from his position as President and Chief Executive Officer. It is anticipated that Mr. McDonald will become the Non-Executive Chairman and that Mr. van Dyke will take over the day-to-day operations of Mayen and will become the President and Chief Executive Officer.

Sponsorship

Mayen will apply to the Exchange for an exemption from the requirement to obtain a sponsor in connection with the Proposed Transaction; however, there is no assurance that an exemption from sponsorship will be granted.

Completion of the Proposed Transaction is subject to the approval of the Exchange. The Proposed Transaction was negotiated on an arm's length basis by the parties and is not a "Non Arm's Length Qualifying Transaction" under the policies of the Exchange. Accordingly, approval of the Proposed Transaction by Mayen's shareholders is not required. Mayen does not intend to obtain shareholder approval for the Proposed Transaction but rather will prepare a filing statement under the policies of the Exchange.

General

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

About Mayen Minerals Ltd.

Mayen is designated as a capital pool company by the Exchange. Mayen has not commenced commercial operations and has no assets other than cash. The purpose of the offering under the Company's Prospectus was to provide the Company with funds to identify and evaluate businesses or assets with a view to completing a Qualifying Transaction. Any proposed Qualifying Transaction must be approved by the Exchange and, in the case of a non arm's length Qualifying Transaction, must also receive majority approval of the minority shareholders. Until the completion of a Qualifying Transaction, the Company will not carry on any business other than the identification and evaluation of businesses or assets with a view to completing a proposed Qualifying Transaction. For further information regarding Mayen and the Company's management team, see the Prospectus filed with the Company's disclosure documents on SEDAR at www.sedar.com.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

R.A. Bruce McDonald, President, Chief Executive Officer and a Director

FORWARD LOOKING STATEMENTS: This press release contains forward-looking statements, which address future events and conditions, which are subject to various risks and uncertainties. The Company's actual results and financial position could differ materially from those anticipated in such forward-looking statements as a result of numerous factors, some of which may be beyond the Company's control. These factors include: results of exploration activities and development of mineral properties, fluctuations in the marketplace for the sale of minerals, the inability to implement corporate strategies, the ability to obtain financing, currency fluctuations, general market and industry conditions and other risks disclosed in the Company's filings with Canadian Securities Regulators.

Forward-looking statements are based on the expectations and opinions of the Company's management on the date the statements are made. The assumptions used in the preparation of such statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Neither TSX Venture Exchange nor its Regulations 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. The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Mayen Minerals Ltd.
    R.A. Bruce McDonald
    604-689-4733
    604-251-1721