Sarissa Resources Announces Letter of Intent to Form Joint Venture and Access Project Financing Update
October 26 2012 - 4:10PM
Marketwired
Sarissa Resources Inc. (PINKSHEETS: SRSR) ("Sarissa"), through its
wholly-owned subsidiary Nio-Star Corp. ("Nio-Star" or "the
Company"), is pleased to release this update on the previously
announced Letter of Intent ("LOI") signed in July.
At that time Nio-Star entered into an LOI to form a Joint
Venture company (the "JV") to finance the advanced exploration of
Nio-Star's Nemegosenda niobium property (the "Property"). Certain
confidentiality clauses had been included in the LOI, some of which
have now been waived, and the Parties involved are pleased to
update shareholders with further details about the proposed JV with
a Chinese mining State Owned Enterprise Company ("SOE").
Summary terms of the JV:
-- Upon signing the definitive JV Agreement, the SOE will have the right to
earn 51% of the new JV Company, with Nio-Star retaining 49%.
-- To earn their 51% of the JV, the SOE will fund the advanced exploration
of the Property to produce a Bankable Feasibility Study (the "Study"),
by depositing to the JV and Nio-Star twenty million dollars
(CAD$20,000,000) to be spent on the Study and the maintenance,
exploration and development of the Property, and associated corporate
costs.
-- In addition, the SOE shall pay to Nio-Star a fee of twelve million, two
hundred and fifty thousand dollars (CAD$12,250,000) as:
a. One million dollars (CAD$1,000,000) within 30 days of signing a
Definitive Joint Venture Agreement and having obtained approval of
the appropriate Chinese government agencies.
b. The balance, eleven million two hundred and fifty thousand dollars
(CAD$11,250,000) within 30 days of completion of the Study.
In addition to the foregoing, once the SOE has earned its
interest, industry standard dilution clauses are included should
one side or the other decide not to participate in further
financing of the project. In the case of Nio-Star the dilution
clauses will stipulate that Nio-Star's interest may not be diluted
below a 20% carried interest.
As well, the LOI made provision for the SOE to pay a fee to
Nio-Star to have an exclusivity period to complete due diligence
and the JV Agreement. This exclusivity period was until October 31,
2012. There were delays in obtaining travel permits for certain key
people from the SOE to complete the planned activities and in order
to compensate for this time delay the Parties have mutually agreed
to extend the exclusivity period until February 28, 2013.
In order to advance the project during this exclusive period,
Nio-Star and the SOE have worked together to collect approximately
900 kgs of rock samples from the adit area of the project's D Zone.
These are being shipped to China for metallurgical and process
testing. Full results from this testing program are expected to be
completed over approximately 3 months. These tests may be used
toward the Study, and are likely to speed up the process. Further
details and interim updates on this program, as well as other
ongoing corporate initiatives, will be announced as they
progress.
Safe Harbor This press release contains
statements, which may constitute "forward-looking statements"
within the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934, as amended by the Private Securities
Litigation Reform Act of 1995. Those statements include statements
regarding the intent, belief or current expectations of Sarissa
Resources Inc. and Nio-Star Corp., as well as members of their
respective management, in addition to the assumptions on which such
statements are based. Prospective investors are cautioned that any
such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, and that actual
results may differ materially from those contemplated by such
forward-looking statements. Important factors currently known to
management that could cause actual results to differ materially
from those in forward-statements include fluctuation of operating
results, the ability to compete successfully and the ability to
complete before-mentioned transactions. Neither Sarissa nor
Nio-Star undertakes any obligation to update or revise
forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operating
results.
About Sarissa Resources Inc.
Sarissa Resources Inc. is a junior exploration company with
interests in properties in Northern Ontario, Canada. The Company is
specifically focused on the development of its Nemegosenda niobium
project as well as its Shining Tree gold project.
FOR FURTHER INFORMATION contact: www.sarissaresources.com Public
Relations: Merle Goertz North America: 866-307-1331 Hong Kong: 852
8174 5996
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