VANCOUVER, British Columbia--(BUSINESS WIRE)--Santa Barbara Resources Limited (TSX-V: SBL - “Santa Barbara” or the “Company”) and Rio Alto Mining Limited ("Rio Alto") have mutually agreed to extend the deadline to replace the non-binding letter of intent ("LOI") announced on February 7, 2013 with a definitive option and joint venture agreement containing industry standard terms and conditions. Santa Barbara has accepted US$300,000 in partial payment of the minimum US$1,500,000 to be funded by Rio Alto the first year of the agreement so as not to delay preparation for the exploration program and to fund the April 4, 2013 payment of US$100,000 paid to the underlying property owner.
Santa Barbara has received a drill permit for the Sancos project from the Peruvian Ministry of Energy and Mines, authorizing the construction of up to 300 individual drill platforms and related access. Access roads and a total of 22 drill platforms were previously constructed by Santa Barbara so that there is now full access and permitting to conduct its exploration programs, including drilling, when the time comes.
The technical staff of Santa Barbara and Rio Alto are designing and preparing for an exploration program to be conducted over the first option year.
Sancos Project:
The Sancos project is located in the mining-friendly Ayacucho Region of Peru. The property hosts a large high-sulphidation epithermal gold-silver mineralized system. The Sancos project encompasses 8,200 hectares with 2,000 hectares held directly by Santa Barbara. Santa Barbara has the option, subject to certain back-in rights, to acquire a 100% interest in the remaining 6,200 hectares of the Sancos project from Barrick Gold’s Peruvian subsidiary. The terms of the Barrick option, including Barrick’s back-in right in certain circumstances, are described in the notes to the annual financial statements of Santa Barbara. During the term of the option and joint venture agreement, Rio Alto will fund Santa Barbara to make cash payments due to Barrick pursuant to the Barrick Option. If Barrick exercises its back-in right after Rio Alto has earned an interest, Santa Barbara and Rio Alto will be diluted pro rata and the back-in purchase price will be paid proportionally to their participation in the joint venture at the time of the Barrick back-in, subject to Santa Barbara recovering three times its expenditures in the Sancos project prior to the date of the signature of the LOI.
About the Company
Santa Barbara is a South American mineral explorer focusing on Peru. The Company has 25.3 million shares outstanding.
ON BEHALF OF THE BOARD
“Christoph Lassl”
_______________________________
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: christoph@sbr-ltd.com.
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 the negotiation and execution of an option and joint venture agreement with Rio Alto. The LOI is a non-binding agreement between Santa Barbara and Rio Alto, and is subject to the execution of a definitive option and joint venture agreement between the parties. There can be no assurance that the definitive agreement will be executed. 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, including the risk that Rio Alto will not be satisfied with its due diligence review and will not proceed with the option and joint venture agreement. 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.