Olympus announces signing of formal joint venture agreement in respect of the Capcapo Copper – gold discovery, in the N Philippines
Olympus Pacific Minerals Inc. (TSX & ASX: OYM, OTCBB: OLYMF, and Frankfurt: OP6) (the “Company” or “Olympus”).
Olympus Pacific Minerals Inc. is pleased to announce that it has entered a formal joint venture agreement with Abra Mining & Industrial Corporation (“AMIC”), Jabel Corporation (“Jabel”), Kadabra Mining Corporation (a wholly-owned subsidiary of the Company) (“KMC”), and PhilEarth Mining Corporation in respect of the Capcapo Gold Property, Northern Philippines.
The Capcapo Gold Property is strategically located in Abra Province, Northern Luzon, Philippines, north of the prolific Baguio-Mankayan Gold District that has combined production, current reserves and resources in excess of 60 million ounces of gold.
The Company, through KMC, completed its due diligence drilling at Capcapo in September 2007 (See Olympus press releases dated September 21, June 25, and June 5, 2007). Significant due diligence results are as follows:
Note: True widths undetermined
Company Chief Executive Officer, John Seton, said: “This acquisition is an integral part of our strategy to become a multi-mine producer and complements our development stage Malaysian property in diversifying our company over three countries in Southeast Asia. Our due diligence drilling at Capcapo indicates we have a truly world class copper-gold discovery typical of the premium deposits found in the Philippines. I believe our success in negotiating this exciting ground is two fold; first, our successful track record commissioning two gold processing plants that generate us operating cash and second, our recent announcement that we are starting feasibility at Bau Central in the Bau Goldfield, East Malaysia. We are excited about the major potential at Capcapo and our strategic partnership with AMIC.”
Pursuant to the terms of the joint venture agreement, Olympus, in consortium with a Philippine company (in the process of incorporation) controlled by Philippines nationals, has an option to acquire a 60 percent interest in the Capcapo Gold Project, Northern Philippines, subject to compliance with Philippine foreign ownership laws. Olympus paid to AMIC $300,000 upon the signing of the joint venture agreement, is required to pay a further $400,000 upon gaining unencumbered access to the property and may fully exercise its option over three stages of expenditure as follows:
Stage Committed Expenditures Payment Due Upon Completion of the Stage Stage 1 $1,000,000 $400,000 Stage 2 $2,000,000 $400,000 Stage 3 $4,000,000 N/A
In addition, Jabel will be paid a royalty based on the calculation that yields the highest payment; either 3 percent of the gross value of production from the Capcapo Gold Project or 6 percent of the annual profit of the joint venture corporation. Finally, Olympus is obligated to make a milestone payment to AMIC consisting of $2 million plus 2,000,000 common shares of Olympus or common shares having a value of $5 million, whichever is of lesser value, each time a specific level of mineral reserves is defined or daily production rates are achieved.
The joint venture agreement also grants the Company a right of first refusal over a mineral production sharing agreement held by Jabel over the Patok property, also located in Abra Province, Northern Philippines.
The Company had entered into a memorandum of understanding with Abra Mining & Industrial Corporation and Jabel Corporation on November 23, 2006, which provided that, subject to the entering into of a definitive joint venture agreement and compliance with applicable Philippine laws, the Company can earn a 60 percent interest in the project, such interest being assignable in whole or in part to a qualified Philippine affiliate of the Company.
Olympus is a diversified gold company focused on Southeast Asia with two operating mines and four advanced exploration properties. The Company is well positioned to expand existing gold production at its current facilities and expects to build a third producing gold plant at Bau Central, East Malaysia by 2014.
Toronto, Canada, September 30, 2011