Augyva Mining Resources Inc.

Augyva Mining Resources Inc.

January 25, 2011 15:06 ET

Augyva Comments on Agreement Between Wisco and Century Holdings

MONTREAL, QUEBEC--(Marketwire - Jan. 25, 2011) - Augyva Mining Resources Inc. ("Augyva" or the "Company") (TSX VENTURE:AUV) is pleased to provide the following comment on the recent Red Rock Capital Corp.('Red Rock') news release disseminated this morning involving Century Iron Ore Holdings Inc. ("Century Holdings") and WISCO International resources Development & Investment Limited ('WISCO').

Georges-Yvan Gagnon, President and CEO of Augyva commented that "I am pleased that Century Holdings has entered into a binding framework agreement (the "Framework Agreement") with a company of the stature of WISCO. As previously announced by Century Holdings, the Framework Agreement sets out a strategic relationship between Century Holdings and WISCO that will involve (i) a private placement by WISCO into Century Holdings, (ii) joint venture agreements between Century Holdings and WISCO for ownership of the Century Holdings subsidiaries that hold interests in the Duncan Lake Iron Ore Property ("DLIOP"), Attikamagen and Sunny Lake properties, and (iii) iron ore off-take agreements in favour of WISCO for each of the Century Holdings' properties. I believe the Framework Agreement will advance the speed with which Augyva will be able to undertake an advanced drilling program and develop a Feasability Study on the Duncan Project."

As announced, WISCO will enter into, inter aliaa joint venture agreement with Century Holdings for ownership of the Century Holdings subsidiary that hold interests in Augyva's Duncan Lake Iron Ore Property ("DLIOP"). Under the joint venture agreement, WISCO will inject new capital in exchange for a 40% equity interest in each subsidiary based on valuations to be agreed upon by Century Holdings and WISCO. Thereafter, Century Holdings and WISCO will contribute, in accordance with their respective equity interests, up to 30% of each Century Holdings subsidiaries' proportionate share of the capital expenditure required to enable the Duncan Lake Project to achieve production. WISCO will assist to procure the 70% balance of each Century Holdings subsidiaries' proportionate share of the capital expenditure required to achieve production by arranging for debt financing on customary terms. The joint venture agreement will also provide WISCO with a first right to purchase at cost from an allocation of the total production output from each property in an amount equal to WISCO's equity interest in each subsidiary, plus an additional 20% at fair market value upon earning a 40% interest. The structure of the joint ventures and the form of the joint venture agreements remain to be negotiated between Century Holdings and WISCO. 

Each of Century Holdings' and WISCO's obligations to proceed with the transactions contemplated by the Framework Agreement are subject to the receipt of all required government approvals, including approvals under the laws of the People's Republic of China (the "PRC"), and to Century Holdings' receipt of the approval of the Exchange to the WISCO share subscription. Each party has agreed to use commercially reasonable efforts to obtain the required approvals.

Century Holdings and WISCO have agreed to negotiate in good faith the definitive agreements required to give effect to the strategic relationship, including the subscription agreement and joint venture agreements. WISCO's obligation to purchase the common shares of Century Holdings will be binding and enforceable under the Framework Agreement notwithstanding that the joint venture agreements may not have been concluded at such time. It is contemplated that WISCO will complete its share subscription into Century Holdings upon receipt of PRC approvals and that the Qualifying Transaction would complete shortly thereafter.

About Augyva JV with Canadian Century Iron Ore for the Duncan Lake Iron Ore Property ("DLIOP")

As announced in Augyva's press releases of November 11, 2010, and December 6, 2010, Canadian Century Iron Ore Corporation ("Canadian Century"), a Century Holdings subsidiary, has completed its funding of $6,000,000 to earn a 51% interest in Augyva's Duncan Lake Iron Ore Property, in accordance with the option and joint venture agreement entered into between the parties in May 2008. Accordingly, effective December 6, 2010, the parties have formed a joint venture in respect of the Project (Augyva 49% and Canadian Century 51%). Augyva will continue to be the Operator of the Duncan Lake Property until the funded amount fully utilized for the Project and then Operatorship shall then be transferred according to the Agreement. Canadian Century has the option to acquire an additional 14% interest in the Project by incurring exploration, construction and/or operating costs totalling $14,000,000 by the eighth anniversary of the date of the Agreement, or by completing a feasibility report in respect of the Project. If Canadian Century funds a lesser amount, it will acquire a lesser additional percentage interest on a pro rata basis.

Certain information regarding Augyva, Canadian Century Iron Ore Corp, Century Holdings, the WISCO private placement and the definitive joint venture agreements with WISCO, may constitute forward-looking statements under applicable securities laws and necessarily involve known and unknown risks and uncertainties. Certain important risk factors could cause the Company's actual results to differ materially from those expressed or implied by such forward-looking statements including, without limitation, completion of due diligence to the satisfaction of WISCO, approvals of the government of China, approval of the TSX-V, changes in the world wide price of mineral commodities and currency fluctuations, general market conditions, and the uncertainty of future profitability and access to sufficient capital. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements and caution should be exercised on placing undue reliance on forward looking information.

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.

Contact Information

  • Georges-Yvan Gagnon - P.Geo
    President and Chief Executive Officer
    Lynda Paulin
    Chief Financial Officer