VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 3, 2011) - MARIFIL MINES LTD. (TSX VENTURE:MFM:) ("Marifil" or "the Company") announces that it is nearing completion of three definitive joint venture agreements with Saccharum Energy Inc. for Marifil's K-2 property in Neuquen Province and Marifil's K-3, and K-4 potash properties in Mendoza Province.
Under the revised terms for the properties Saccharum Energy Inc. (SHM) has paid $150,000 to Marifil for the K-3 property and has placed an additional $150,000 in escrow for the K-4 property. The terms for the K-3 and K-4 properties are nearly identical to the terms previously announced for the K-2 project (see News Release dated December 21, 2010).
SHM has placed a further $341,481 in escrow for the purchase of all of the shares of Oxbow Holdings. The price of the shares is $366,481 less a credit of $25,000 (see News Release dated April 4, 2011). The release of funds from escrow is subject to receipt of a Share Purchase Agreement which is to be signed by all of the shareholders of Oxbow.
Under the revised K-2 Agreement, Saccharum agrees to purchase all of the shares of Oxbow for a total price of US$366,481. Saccharum further agrees that Oxbow shareholders can accept either cash or Saccharum shares at a deemed price of C$0.50 per Saccharum share. Marifil then agrees to restructure its underlying agreement with Oxbow whereby Saccharum can earn up to a 70% interest in the K-2 property. Marifil shall retain a 1.5% Net Smelter Royalty. Saccharum shall have the right to purchase Marifil's royalty for US$15,000,000.
Marifil further agrees that Saccharum can acquire up to a 70% interest in the K-3, and K-4 properties. If Marifil elects not to participate, its 30% interest shall be reduced to a 25% carried interest.
Saccharum will pay Marifil US$500,000 in cash plus 2,000,000 Saccharum common shares over three years for each of the three properties for a total payment to Marifil of $1,500,000 and 6,000,000 shares. The first year's payment to Marifil will be US$450,000 in cash and 3,000,000 shares upon Saccharum's completion of a financing.
Saccharum further agrees to spend US$4,500,000 in work over the next four years on each of the properties; as follows: US$300,000 during Year 1, $1,350,000 during Year 2, $1,350,000 during Year 3, and US$1,500,000 during Year 4.
Saccharum will also pay Marifil performance bonuses of 1,500,000 shares upon completion of a positive NI 43-101 compliant ore resource and a further 1,500,000 shares following completion of a Feasibility Study. These bonus shares shall be a one-time payment applicable to the first property only. If Saccharum's share structure exceeds 75,000,000 shares during this agreement the shares payable to Marifil shall be adjusted upward proportionately. Upon completion of Saccharm's earn-in all further expenditures shall be shared 70:30. If Marifil fails to pay its share working interest shall be reduced to a 25% carried interest.
"It has been a long process to negotiate three separate joint ventures," stated John Hite, President of Marifil Mines. "But it is a great pleasure to announce that the process is just about complete. This is a very promising time for Marifil, supported by the fact that our work has identified an abandoned oil well hole on the K-3 property which hit 4 m grading 20% to 22% k20 at a depth of 221.5 m. We have agreed with SHM that this area will be site of our initial drilling campaign. Further, we are highly encouraged that certain Officers and Directors of SHM have elected to participate in Marifil's current private placement. We view this as a positive endorsement of the Company and its projects."
This agreement is subject to approval by the Boards of Directors of Saccharum, Marifil, and Oxbow and the TSX. A small finder's fee is payable to a third party.
For further information regarding Marifil Mines Ltd., please refer to the Company's filings available on SEDAR (Http://www.sedar.com) or at Marifil's Website (Http://www.marifilmines.com).
This press release has been reviewed and approved by John Hite, President of Marifil Mines Ltd. and by Richard Walters, Vice President under whose directions the exploration program is being carried out. Mr. Hite and Mr. Walters are Qualified Persons as defined by National Instrument 43-101. WE SEEK SAFE HARBOR.
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