VANCOUVER, British Columbia--(BUSINESS WIRE)--Santa Barbara Resources Limited (TSX-V:SBL - “Santa Barbara” or the “Company”) has on September 29, 2014, granted an option (“ERCED Option”) to purchase all of the shares of the Company’s wholly owned subsidiary, Santa Barbara Resources Peru S.A.C. (“SBL Peru”), the holder of the Sancos and Surapata gold projects in Peru to ERCED S.A.C., (“ERCED”) a privately owned Peruvian mineral exploration and mining company.
The ERCED Option
This sale represents the sale of the Company’s only remaining mineral properties. ERCED is arm’s length to the Company and there is no finder’s fee payable. The sale is subject to regulatory approval and the approval of the shareholders of the Company, and contemplates the Company exercising its underlying option to acquire the Sancos project. The terms of the ERCED Option require that:
1. ERCED pay the Company US$615,000 (the “Deposit’) on signing the ERCED Option (received); and
2. ERCED pay the Company US$615,000 on closing the ERCED Option.
The Deposit will be returned to ERCED if the Company’s shareholders do not approve the sale or regulatory approval is not obtained. If ERCED does not exercise the ERCED Option, once all conditions to exercise are met, then the Company will be entitled to keep the Deposit.
The Barrick Option
SBL Peru holds its interest in the Sancos property under an August 2009 option to purchase agreement (the “Barrick Option”) with Barrick Gold Corporation’s Peruvian subsidiary Placer Dome del Peru S.A.C. (“Barrick”). The Company has notified Barrick of its intention to exercise its option to purchase a 100% interest in the Sancos gold property.
The Company must pay Barrick US$400,000 to exercise the Barrick Option and complete the purchase of 100% of the Sancos property, subject to Barrick retaining an underlying royalty and a one-time back-in right to become the project operator and re-acquire a 51% interest in the property under certain defined conditions. Proceeds from the ERCED sale were used to pay this option exercise payment by its due date of October 5, 2014.
The shareholder meeting will be held on November 6, 2014.
About the Company
Santa Barbara is a South American mineral explorer focusing on Peru and Chile. The Company has 25.3 million shares outstanding. The Company’s existing mineral properties in Peru, Sancos and Surapata, while promising, do not currently contain any NI 43-101 compliant mineral resources. It is expected that the proposed sales transaction, if completed, will provide the Company with sufficient working capital to continue its mineral property acquisition and exploration activities for at least 12 months and the Company’s plan will be to pursue the acquisition of a quality mineral exploration property in that period.
ON BEHALF OF THE BOARD
Christoph Lassl, President and
Chief Executive Officer
Please visit the Company’s web site: www.sbr-ltd.com. For further information, please contact Christoph Lassl, President and Chief Executive Officer. Telephone: 56-9-81490442 or email: firstname.lastname@example.org.
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.
This news release contains certain statements that may be deemed “forward-looking” statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur and include, without limitation, statements regarding the Company’s plans with respect to selling its mineral properties and obtaining the proceeds therefrom. Although Santa Barbara believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements due to factors such as uncertainties in obtaining required approvals or in completing a transaction in difficult market conditions. Forward looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made. Except as required by law, the Company undertakes no obligation to update these forward-looking statements in the event that management’s beliefs, estimates or opinions, or other factors, should change.