Simberi Mining Corporation

Simberi Mining Corporation

May 02, 2007 16:39 ET

Simberi Joint Ventures Kakanda Project

TORONTO, ONTARIO--(CCNMatthews - May 2, 2007) - Simberi Mining Corporation ("Simberi") (TSX VENTURE:SAU) announced today that it has entered into a Letter of Intent (the "LOI") with Amari Holdings Ltd ("Amari") relating to the development of Simberi's Kakanda Copper/Cobalt project (the "Kakanda Project") in the Democratic Republic of Congo (the "DRC").

The LOI summarizes the principal terms and conditions that have been discussed by representatives of Simberi and Amari with respect to the proposed acquisition by Amari of up to a 65% interest in PTM Minerals (Cayman) Ltd. ("PTM Minerals"), a wholly owned subsidiary of Simberi (the "Proposed Acquisition"). The LOI provides, amongst other things, that upon completion of definitive documentation the parties will proceed with the Proposed Acquisition on the following terms:

1. Amari will invest $10 million (US) (the "Cash Investment") in PTM Minerals over a twenty four month period, as and when required by PTM Minerals, from the date of execution of a joint venture agreement with Gecamines, the state owned mining company in the DRC, in respect of the Kakanda Project. In exchange for the Cash Investment, Amari will receive a 51% interest in the outstanding common shares of PTM Minerals. The common shares of PTM Minerals will be released to Amari on an earn in basis as funds are advanced to PTM Minerals.

2. An additional number of common shares in PTM Minerals will be issued to Amari upon the completion by PTM Minerals of a bankable feasibility study for the Kakanda Project so that upon issuance of said additional common shares, Amari will own an additional 14% of PTM Minerals (for a total of 65%).

Completion of the transaction is subject to a number of conditions including, but not limited to, TSX Venture Exchange acceptance, all necessary regulatory and third party approvals and authorizations and completion of due diligence.

Amari is an African based and Central African focused mining investment company with a track record of successful exploration through to mine development and mine management. Its in-house expertise encompasses all aspects of geology, resource quantification, process and plant design and construction, mining operations and resource production management. Amari has investments in various listed and unlisted mining resource and mining service companies. Amari has specific operating experience in the DRC.

On December 22, 2006, PTM Minerals received a letter from the Minister of Mines in the DRC (the "Minister") addressed to the Vice-President of the Republic in charge of Economic and financial commission, the Vice-Minister of Mines, PTM Minerals and Gecamines, whereby the Minister confirmed the following:

(i) an agreement regarding the tailings resource which constitutes the tailings portion of the Kakanda Project has been reached and a formal and final agreement was scheduled to have been entered into between PTM Minerals and Gecamines on November 30, 2006.

(ii) PTM Minerals interest in the deposits which constitute the hard rock portion of the Kakanda Project (the "Hardrock Deposits") supersede certain subsequent interests which were granted in the concessions in which the Hardrock Deposits are contained and it is therefore incumbent upon Gecamines to respect, enforce and re-establish the rights of PTM Minerals in the Hardrock Deposits.

(iii) Gecamines should formalize and give effect to the foregoing agreements without further delay.

Negotiations have been ongoing between representatives of PTM Minerals and Gecamines to finalize the terms of the joint venture agreement. Amongst other things, PTM Minerals has been negotiating to increase its interest in the joint venture from 51% to 75-80%. Negotiations have been protracted for several reasons including, amongst other things, the recently completed presidential elections in the DRC. Joseph Kabila was formally named President of the DRC on November 15, 2006.

While discussions on the joint venture have been continuing for some time, management of Simberi cannot define the exact timeframe in which the formal joint venture agreement will be signed. However, management is confident, based on the terms of the original agreement with Gecamines, and the progress of the negotiations to date and the explicit statements of the Minister, that the final agreement will be signed in the near future.

Management of Amari and Simberi believe that by combining their technical and financial resources with Amari's experience in developing projects in Africa, they will be well positioned to expedite the development of the Kakanda Project. Preparation of formal documentation reflecting the terms of the LOI is currently in progress.

About Simberi:

Simberi is a junior resource company focused on the exploration and acquisition of developed low cost precious and base metal projects internationally. The company's main exploration project is the Kakanda Project. Simberi is also involved in several joint venture projects in Western Australia.

This press release includes certain "Forward-Looking Statements" within the meaning of the US Private Securities Reform Act of 1995. Other than statements of historical fact, all statements are "Forward-Looking Statements" that involve such various known and unknown risks, uncertainties and other factors. There can be no assurance that such statements will prove accurate. Results and future events could differ materially from those anticipated in such statements. Readers of this press release are cautioned not to place undue reliance on these "Forward-Looking Statements". All dollar amounts are Canadian dollars unless otherwise noted.

Neither the TSX Venture Exchange, nor any other securities regulatory authority has approved or disapproved of the contents of this news release.

Contact Information

  • Simberi Mining Corporation
    Mike Newbury
    President and CEO
    (416) 603-7200
    (416) 603-9200 (FAX)