Canmex Minerals Corporation

January 02, 2007 19:36 ET

Canmex Announces Puntland Parliament Approves Production Sharing Agreement

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 2, 2007) - Canmex Minerals Corporation ("Canmex" or "the Company") (TSX VENTURE:CXM) is pleased to announce that the Parliament of Puntland has unanimously approved the proposed Production Sharing Agreement between the Company, Range Resources Limited and the Puntland Government.

As announced on October 11, 2006, Canmex signed a non-binding Memorandum of Understanding ("MOU") to acquire an interest in licenses covering the highly prospective Nogal and Darin basins in the state of Puntland in northern Somalia. The Nogal and Darin basins are considered world-class exploration plays with a petroleum system geologically similar to and formerly contiguous with those within the Republic of Yemen.

Pursuant to the MOU, Canmex has the right to acquire an 80% interest in the licenses and operatorship thereof in exchange for: (i) the financial commitment over an initial four year period of US$50 million in exploration expenditures; and (ii) the payment to Range of an additional US$3.5 million upon commencement of commercial production. Completion of the transactions contemplated in the MOU remains subject to a number of conditions, including: (i) the successful completion of technical and legal due diligence by Canmex; (ii) negotiation and finalization of definitive binding agreements between Canmex and Range, including a Joint Operating Agreement and binding agreements among Canmex and Range and the Ministry of Energy of Puntland; and (iii) all requisite governmental, regulatory and other consents including those required in Puntland and the Somali Republic.

With the Production Sharing Agreement now approved by the Puntland Parliament, Canmex and Range expect to finalize their joint venture arrangements in the near future.

In respect of the conflict in southern Somalia, the Company is closely monitoring events but at this stage, can advise that the hostilities have not affected to date the Company's activities in the state of Puntland located in northern Somalia.

Forward-looking statements: This press release contains statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as political risk, general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events and management's capacity to execute and implement its future plans. Actual results may differ materially from those projected by management.


Rick Schmitt, Director

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Canmex Minerals Corporation
    Sophia Shane
    Corporate Development
    (604) 689-7842
    (604) 689-4250 (FAX)