AXMIN Inc.
TSX VENTURE : AXM

AXMIN Inc.

February 28, 2012 08:43 ET

AXMIN and Teranga Gold Corporation Amend the Senegal Permits Joint Venture Agreement

TORONTO, ONTARIO--(Marketwire - Feb. 28, 2012) - AXMIN Inc. (TSX VENTURE:AXM) is pleased to announce as a result of advancing the Gora deposit towards development, AXMIN and its joint venture partner Sabodala Mining Company SARL ("SMC"), a wholly owned subsidiary of Teranga Gold Corporation (TSX:TGZ) ("Teranga"), have agreed to amended the original 2008 joint venture agreement to beneficially represent AXMIN's interest in the exploration potential of the Senegal licences. The amended joint venture and royalty agreement (the "Agreement") supercedes and replaces the original joint venture agreement. In July 2011, Teranga earned an 80% interest in Sounkounko, Heremokono and Sabodala NW explorations licences (the "Project") located in the Birimian belt of eastern Senegal, by spending US$6 million on exploration. AXMIN has retained a 20% interest in the Project. The revised joint venture is subject to approval by the Minister of Mines, Republic of Senegal.

The terms of the new Agreement with SMC include:

  1. Both parties agree that their respective interests (Teranga - 80% and AXMIN - 20%) in the Project are divided into Target Areas (being areas subject to exploration) and Remainder Areas (areas not yet subject to exploration) and that both parties will retain all respective interests in all of these areas, until an election is made by AXMIN to convert its 20% interest in a Target Area into a Royalty Interest (a "Royalty Election").
  2. AXMIN will have a free carried interest of US$2.5 million, with respect to the Target Areas work costs starting from October 1, 2011, after which both parties are to jointly fund Target Area work costs on a pro-rata basis.
  3. AXMIN has 15 business days after the receipt of each Quarterly Report and Budget to confirm whether it elects to maintain its interest in the Target Area or convert into a Royalty Interest. If AXMIN fails to make an election in the required time then it is deemed that AXMIN has made a Royalty Election.
  4. If a Royalty Election has been made then SMC must pay to AXMIN a Royalty Interest of 1.5% of Net Smelter Returns from the sale or disposition of Minerals produced in the specified Target Area.
  5. SMC will solely fund all finance work costs for each of the Royalty Target Areas,
  6. AXMIN has made a Royalty Election with respect to the Gora Target Area, located in the Sounkounko licence and as a result has a Royalty Interest in the Gora Target Area.

President and CEO George Roach comments "The new Agreement better reflects AXMIN's interest in the Senegal Project and allows us the flexibility to focus our work costs on those target areas that the Company deems will add the most value for our shareholders, still maintaining an upside potential through the 1.5% NSR on those areas where we opt for the royalty election. In addition, the free carried interest of US$2.5 million is very beneficial for AXMIN as we expect to have a good understanding of the potential of the various target areas by the time we are required to participate in the exploration funding, which we anticipate to be in the latter half of 2012. This new Agreement also gives AXMIN the benefit of continuing to participate in the upside of Teranga's exploration successes in Senegal at the same time, allowing the Company to maintain its focus on its opportunities in Central African Republic."

All exploration will continue to be managed by Teranga, and as per the Agreement Teranga are obligated to submit a full report and budget to AXMIN every quarter.

About AXMIN

AXMIN is a Canadian exploration and development company with a strong focus on central and West Africa. AXMIN has projects in Central African Republic, Mali, Mozambique, Sierra Leone and Senegal. AXMIN is positioned to grow in value as it progresses its Passendro Gold Project towards development and builds on its project pipeline focusing on transitioning from an explorer to producer. For more information regarding AXMIN visit our website at www.axmininc.com.

This press release includes certain "Forward-Looking Statements." All statements, other than statements of historical fact included herein, including without limitation, statements regarding future plans and objectives of AXMIN; and statements regarding the ability to develop and achieve production at Passendro, to revalidate the BFS and to satisfy the terms of the Mining Licence as negotiated, are forward-looking statements that involve various risks and uncertainties.

There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from AXMIN's expectations have been disclosed under the heading "Risk Factors" and elsewhere in AXMIN's documents filed from time-to-time with the TSX Venture Exchange and other regulatory authorities. AXMIN disclaims any intention or obligation to update or revise any forward-looking statements whether resulting from new information, future events or otherwise, except as required by applicable law.

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

  • AXMIN Inc.
    George Roach
    President & CEO
    Direct T:+44 779 626 3999

    AXMIN Inc.
    Judy Webster
    Manager Investor Relations
    416 368 0993 ext 221
    ir@axmininc.com
    www.axmininc.com