Dec 22 2014
Mediterranean Resources Ltd. (the "Company") is pleased to announce that the Company's Turkish subsidiary, Akdeniz Resources Madencilik A.Ş. ("Akdeniz"), the owner of the Company's flagship Yusufeli property, has entered into a Letter of Intent dated December 17, 2014 (the "LOI") with Çeka İnşaat ve Sanayi Ticaret A.Ş., a private Turkish corporation ("ÇEKA"), to form a joint venture on the Yusufeli property in the province of Artvin, Turkey.
Robert Abenante, the Company's CEO, states: "We are very pleased with the proposed joint venture with ÇEKA. The joint venture will allow the Company to once again be in a position to advance the development of its flagship asset in Turkey. The agreement will breathe life back into the Company and enable it to achieve development milestones without suffering significant dilution in the parent company. Several years of idle development on the asset has been a driving factor in the Company's spiraling market cap. This agreement provides the capital required to fund day to day operations in the subsidiary, maintain the licenses in good standing and push ahead with critical and timely development milestones for the project. The agreement gives the Company an opportunity to retain up to an 80% interest in the project while it advances the property on an aggressive development timeline."
The key terms of the LOI include the following:
- Subject to exchange approval, the Company has agreed to transfer 20% of the issued and outstanding shares in the capital of Akdeniz to ÇEKA in consideration for ÇEKA advancing $2 million to the Company to be used to advance the Yusufeli property as follows:
- payments for office, salaries and other necessary payments for the day-to-day business operations of Akdeniz;
- payments such as taxes and social security payments that Akdeniz is obliged to pay according to the Turkish laws and regulations;
- payments to keep the licenses in good standing until production;
- obtaining DSI and relevant ministry and commission approval necessary to obtain permits and continue development until production;
- completing a Prefeasibility Study;
- completing a Taç-Çorak Gold Mine Project EIA Report; and
- obtaining an Environmental Impact Assessment Permit.
- Subject to exchange approval, the Company is required to raise gross proceeds in a financing of at least $1.5 million on or prior to January 31, 2015. In the event that the Company is not successful in raising such amount, ÇEKA will have the right to earn an additional 29% of Akdeniz (49% in the aggregate). This additional interest will be earned through ÇEKA's continued funding of the development of Akdeniz from February 1, 2015 through to May 31, 2015.
- The Company is required to raise gross proceeds in a subsequent financing of at least an additional $3.0 million on or prior to May 31, 2015 ($4.5 million in the aggregate). In the event that the Company is not successful in raising such amount, ÇEKA will have the right to purchase the remaining outstanding shares in Akdeniz that it does not already own in consideration for the payment of $5 million and the grant of a 5% net smelter returns royalty to the Company with respect to the Yusufeli property. The sale of the remaining interest in Akdeniz would be subject to exchange policies and receipt of shareholder approval from the shareholders of the Company in accordance with applicable corporate laws.
The parties have agreed to enter into a definitive joint venture agreement which the Company anticipates will be done on or prior to January 31, 2015.
Signed on behalf of the Board of Directors.
Robert Abenante, Chairman, President & CEO
Source: http://www.medresources.ca/