Nanika Resources Inc.

Nanika Resources Inc.

November 27, 2008 09:00 ET

Nanika Announces Memorandum of Understanding

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 27, 2008) - Nanika Resources Inc. (TSX VENTURE:NKA)(FRANKFURT:C7X) (the "Company" or "Nanika") is pleased to announce that it has entered into a Memorandum Of Understanding (MOU) with Palm Clean Energy Inc. and Daewon Chemical Co. Ltd. of South Korea, confirming intentions to form a joint venture company. The new joint venture company formed by these partners will hold the continued exploration, development and mining right to the "Lucky Ship" molybdenum project located at the "Nanika Ridge" site approximately 85 kilometres southwest of the town of Houston, British Columbia. Nanika's President and Chief Executive Officer, James Jacuta, commented, "I would like to thank the teams representing all of the parties for their efforts. They were certainly complicated by recent events around global fiscal uncertainty. The success achieved in arriving at this Memorandum of Understanding is the result of their persistence, commitment, and understanding in all of the circumstances."

Upon completion of the Nanika Molybdenum Joint Venture Agreement (JVA) the Korean partners will be issued 40% of the new joint venture company shares and Nanika will hold 60%. The total payments by Korean partners to the "Lucky Ship" molybdenum project will then be $5.0 million dollars, inclusive of private placements, all of which will have been received within the first two years of the project. Pursuant to the signing and completion of the JVA the Korean partners will provide a payment of $500,000 dollars. Following the subsequent completion by the Korean partners of the junior financing needed for all reasonably estimated exploration costs to provide the information necessary to produce a bankable feasibility study in accordance with National Instrument 43-101 the Korean partners will be entitled to an option to 51% of the shares of the joint venture company and Nanika will hold 49%. This financing is to be completed within 24 months of signing of the JVA.

Under the terms of the MOU the Korean partners will then within a further 30 months of completion of the bankable feasibility study arrange the senior financing required to put the property into continuous production. Upon arranging the senior financing the Korean partners will be entitled to an option to 60% of the shares of the joint venture company and Nanika will hold 40%. In the event that the Korean partners are not able to arrange the senior financing within the 30 months then Nanika would be at liberty to do so. Upon Nanika arranging the senior financing then the Korean partners would hold 42% of the shares in the joint venture company and Nanika would hold 58%.

The signing of any JVA being negotiated will be subject to the completion of due diligence and the approval of Nanika's board of directors. The MOU is non-binding and the previously signed Option Agreement remains in force. The original Option Agreement contained terms that provided that the parties would subsequently enter into a formal joint venture.

About Nanika Resources Inc.

Nanika Resources Inc. is a TSX Venture listed mineral exploration and development company focusing on the development of its Lucky Ship Molybdenum Property in west central British Columbia and the advancement of its other mineral exploration properties, all of which are located within Canada.

On Behalf of the Board

James D. Jacuta, Chairman, President & CEO

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of the information contained herein.

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