Anthem Ventures Capital Corp. Announces Amendment to Option Agreement with Mexivada Mining Corp.
Suite 300, 550 Burrard Street Vancouver, BC V6C 2B5 Tel: (604) 689-3040 Fax: (604) 689-5642
FOR IMMEDIATE RELEASE:
NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRE SERVICES
ANTHEM VENTURES CAPITAL CORP. ANNOUNCES AMENDMENT TO OPTION AGREEMENT WITH MEXIVADA MINING CORP.
VANCOUVER, May 21, 2010 – As set forth in the March 24, 2010 press release of Anthem Ventures Capital Corp. (“Anthem”) and Anthem’s filing statement dated March 31, 2010 (the “Filing Statement”), Anthem has entered into an acquisition agreement dated March 24, 2010 (the “Acquisition Agreement”) with West Kirkland Mining Inc. (“West Kirkland”) and the shareholders of West Kirkland pursuant to which Anthem has agreed to acquire all of the issued and outstanding common shares of West Kirkland from the West Kirkland shareholders (the “Acquisition”). The Acquisition is intended to serve as the basis for Anthem’s “Qualifying Transaction” under the policies of TSX Venture Exchange (the “Exchange”).
The principal purpose of this news release is to provide disclosure of new information related to the Goldstorm Property. As set forth in the Filing Statement:
- The Goldstorm Property is an exploration stage mineral resource property with the principally targeted resource being gold. The property is comprised of 148 unpatented lode mining claims and a lease over certain private lands covering an aggregate area of approximately 4,100 acres located in the Snowstorm Mountains Mining District in Elko County, Nevada.
- Pursuant to a property option agreement (the “Mexivada Agreement”) dated December 21, 2009 between West Kirkland and Mexivada Mining Corp. (“Mexivada”), West Kirkland acquired an option to acquire up to a 75% interest in the Goldstorm Property from Mexivada.
- Under the Mexivada Agreement, West Kirkland can acquire a 56% interest in the Goldstorm Property by making the following cash payments and share issuances to Mexivada and incurring the following expenditures:
- $10,000 in cash on signing of the Mexivada Agreement, being December 21, 2009 (the “Signing Date”);
- $90,000 in cash and 50,000 common shares of West Kirkland on the 21st day after the Signing Date (which shares may be issued as common shares of Anthem on closing of the Acquisition);
- $75,000 in cash within 12 months of the Signing Date;
- $75,000 in cash and 150,000 common shares of West Kirkland within 24 months of the Signing Date;
- $100,000 in cash within 36 months of the Signing Date;
- 250,000 common shares of West Kirkland within 48 months of the Signing Date;
- incurring a minimum of $150,000 in exploration expenditures on the Goldstorm Property within 12 months of the Signing Date;
- incurring a minimum of $400,000 cumulatively in exploration expenditures on the Goldstorm Property within 24 months of the Signing Date including 2,000 metres of reverse-circulation or standard core drilling (or pay $50,000 to Mexivada if such drilling has not been completed);
- incurring a minimum of $900,000 cumulatively in exploration expenditures on the Goldstorm Property within 36 months of the Signing Date; and
- incurring a minimum of $2,900,000 cumulatively in exploration expenditures on the Goldstorm Property within 48 months of the Signing Date.
West Kirkland has the right to acquire a further 19% interest (for a 75% interest in total) in the Goldstorm Property by incurring an additional $2,250,000 in exploration expenditures on the Goldstorm Property and issuing a further 250,000 common shares of West Kirkland to Mexivada within 72 months of the Signing Date. Pursuant to the terms of the Mexivada Agreement, any issuances of common shares of West Kirkland to Mexivada can be satisfied by the issuance of common shares of Anthem.
- Mexivada’s interest in an 800 acre section of the Goldstorm Property was acquired through a lease from NFC Land & Cattle, LLC (“NFC”) pursuant to an agreement dated December 1, 2007 (the “Lease Agreement”) which mining lease was subsequently amended on November 20, 2009 to include an additional 320 acres of NFC privately owned lands (for a total of 1,120 acres) (the “Leased Lands”). Pursuant to the Lease Agreement,
NFC retains a 5% net smelter return royalty in respect of all metallic minerals produced from the Leased Lands (the “NFC Royalty”).
Since the finalization and filing of the Filing Statement, additional information of relevance to the Goldstorm Property has become known and is set forth below.
Reserved Interest
In completing title due diligence on the Goldstorm Property, Anthem and West Kirkland have recently become aware that title to the Leased Lands, a portion of the Goldstorm Property, is subject to an exception whereby an undivided onehalf of all oil, gas and minerals in or under the surface of said land was reserved by a Nevada corporation, in deed recorded in 1960 (the “Reserved Interest”). Neither NFC nor Mexivada made disclosure of the Reserved Interest in the Lease Agreement or the Mexivada Agreement, respectively.
West Kirkland understands that the Nevada corporation no longer exists and that the Reserved Interest may currently be held by a trust. West Kirkland has initiated discussions with the trustee of the trust for the purpose of acquiring or otherwise addressing the Reserved Interest, however, there is no certainty as to when and if West Kirkland will be able to settle this matter.
Amendment to Mexivada Agreement
In light of the Reserved Interest, West Kirkland and Mexivada have agreed to amend the terms of the Mexivada Agreement given that property interests held by Mexivada appear to be less than what was represented by Mexivada in the Mexivada Agreement as a result of the Reserved Interest.
Under the amendment to the Mexivada Agreement (the “Amendment”), which was agreed to on May 18, 2010, West Kirkland will retain its option to acquire up to a 75% interest in the Goldstorm Property on the terms outlined above, however, the acquisition of an interest in the Leased Lands will be handled separately from West Kirkland’s option to acquire an interest in the rest of the Goldstorm Property from Mexivada. Specifically, pursuant to the Amendment, upon completion of the US$75,000 cash payment to Mexivada on December 21, 2010 that forms a part of the option payments under the Mexivada Agreement, West Kirkland will earn a 50% interest in the Leased Lands (being Mexivada’s entire interest in the Leased Lands when taking into account the Reserved Interest).
Under the Amendment, Mexivada is required to use all of its best efforts to establish the extinguishment of, or otherwise acquire the Reserved Interest in order to satisfy West Kirkland’s right to acquire up to a 75% interest in the entire Goldstorm Property. There is no assurance that this will be achieved however the exploration program planned is not affected as detailed below.
Amendment to NFC Royalty
In light of the Reserved Interest, West Kirkland has required Mexivada to amend the terms of the NFC Royalty such that if the Reserved Interest is found to be valid and enforceable, the NFC Royalty shall be reduced pro-rata to such interest such that it is reduced from 5% to 2.5%. By letter agreement dated May 14, 2010 between Mexivada and NFC, NFC agreed to this amendment to the NFC Royalty.
Affect on Exploration Program on Goldstorm Property
Anthem is advised that the existence of the Reserved Interest is not expected to have any impact on West Kirkland’s proposed exploration program on the Goldstorm Property, as summarized in the Filing Statement. Both principal target areas for drilling involved in the proposed exploration program are not within the Leased Lands.
Acquisition of Additional Property Interests
Since the date of the Filing Statement, 1,580 acres (640 hectares) have been added by staking to the properties covered by the Mexivada Agreement.
In addition, West Kirkland has acquired an additional 160 acres (64 hectares) adjacent and on trend to the project area by staking for its own account. These claims are 100% owned by West Kirkland.
R. Michael Jones P.Eng is the non-independent Qualified Person for the technical information in this Press Release. He has relevant experience in Nevada gold exploration and mine operations. He is the President of West Kirkland Mining Inc.
For further information, please call:
Anthem Ventures Capital Corp. West Kirkland Mining Inc.
Grace To (604) 488-3618 R. Michael Jones (604) 685-8311
Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and, if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement, or this press release to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed on the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Disclaimer for Forward-Looking Information
This press release contains forward-looking information within the meaning of Canadian securities laws. Such information includes, without limitation, information regarding the completion of the proposed acquisition of the Properties and the Concurrent Financing, and the anticipated business plans of the Company. Although the Company believes that such information is reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking information provided by the Company is not a guarantee of future results or performance, and that actual results may differ materially from those in forward looking information as a result of various factors, including, but not limited to, the state of the financial markets for the Company’s equity securities, the state of the market for gold or other minerals that may be produced generally, recent market volatility; variations in the nature, quality and quantity of any mineral deposits that may be located, the Company's ability to obtain any necessary permits, consents or authorizations required for its activities, to raise the necessary capital or to be fully able to implement its business strategies and other risks associated with the exploration and development of mineral properties. There can be no assurance that additional properties interests can be acquired. The reader is referred to the Company's most recent annual and interim Management’s Discussion and Analysis for a more complete discussion of such risk factors and their potential effects, copies of which may be accessed through the Company’s page on SEDAR at www.sedar.com.