New Cantech Ventures Inc.
New Cantech Ventures Inc. Grants Option to Purchase 60% of Lucky Ship Molybdenum Property and a Carried 60/40 Joint Venture
Corporate news transmitted by DGAP – a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
——————————————————————————
November 14, 2006 New Cantech Ventures Inc. (‘Cantech’) (TSXV:NCV,
FSE:C7X), is very pleased to announce that it has entered into an
Option/Joint Venture Agreement with Palm Clean Energy, Inc. of Seoul, Korea
and has granted Palm Clean an option to purchase a 60% interest in
Cantech’s Lucky Ship porphyry molybdenum property.
In order to exercise the 60% Option, Palm Clean will be required, amongst
other things, to put the Lucky Ship Property into continuous production and
to fully finance the resulting Joint Venture, including debt financing
Cantech’s portion of the 60/40 Joint Venture. Cantech is required to
re-pay its 40% of the total cost of the Joint Venture out of the cash flow
from the Joint Venture. During the term of the Option, Cantech is to be
the Operator.
Palm Clean to Purchase $1 Million of Units
Palm Clean is also required to purchase $1 Million of private placement
units at the price of $0.50 per unit. Each unit consists of one share and
one warrant. Each warrant is exercisable to purchase a further share at
the price of $0.75 during the first year and at the price of $1.00 during
the second year.
Non Brokered Flow-Through Private Placement
Also, Cantech has agreed to sell, on a non brokered basis, a further $1
Million of flow-through units. The flow-through units have the same terms
as the units being sold to Palm Clean except that both the shares and the
warrants are flow through securities.
About Palm Clean
Palm Clean is in the resource development industry and consulting business
world wide. It is currently developing an open pit coal mine and a deep
water sea port in Indonesia. Palm Clean also has a palm tree plantation in
Indonesia and is constructing a plant to produce bio-diesel fuel from palm
oil.
Terms of the Option to Palm Clean
In order for Palm Clean to exercise its 60% Option, Palm Clean will do all
of the following:
(a) within one year from the date of the Option Agreement, incur
exploration expenses of at least $3.3 Million, (the ‘First Year
Requirement’) (and Cantech is also to use the proceeds a contemporaneous $1
Million private placement by Palm Clean for a total of $4.3 Million), as
follows;
(i) within six months following the date of the Option Agreement, incur
exploration expenses of at least $1.3 Million, which is a firm commitment
of PC (the ‘First Year-First Stage Requirement’) and Cantech is to incur
$1M of exploration expense; and
(ii) within one year from the date of the Option Agreement incur further
exploration expenses of at least $2.0 Million, which is a firm commitment
of PC (the ‘First Year-Second Stage Requirement’);
(b) to incur such further exploration and development expense within the
second and third years of not less than $1,000,000 in each of such years in
order to provide information necessary to prepare a Bankable Feasibility
Study;
(c) pay to the Underlying Optionors from the exploration expense funds 100%
of those amounts required from time to time to keep the underlying option
in good standing and prior to the exercise of the Option pay 100% of the
amounts required to be paid to the Underlying Optionors in order to
exercise the Underlying Option;
(d) within six months from delivering the Bankable Feasibility Study:
(i) provide to the Joint Venture 100% of the amount required to be paid by
Palm Clean for the development of the Property under the Joint Venture; and
(ii) provide Cantech or cause a third party to provide to Cantech at a rate
of interest, reasonably acceptable to Cantech, a debt financing for 100% of
the amount needed by Cantech to finance all amounts to be paid by Cantech
for the exploration and development of the Property under the Joint
Venture, including the establishment of a mine,
(the amounts under (i) and (ii) above are together called the ‘Senior
Financing’), with the amount under (ii) called ‘Cantech’s Portion Of the
Senior Financing’); and
(e) either:
(i) within 18 months of the Senior Financing, will use it best efforts and
then put the Property into production and keep the Property in production
for a period of at least six months at which the rated capacity of the mine
has been met for at least 90% of the days of those six months (‘Continuous
Production’); or
(ii) if PC has used it best efforts to put the Property into Continuous
Production within 18 months of the Senior Financing and despite those best
efforts PC has not be able to do so, then PC continues without interruption
to use its best efforts to put the Property into Continuous Production as
soon as possible and does put the Property into Continuous Production as
soon as possible, but in any case not more than 36 months of the Senior
Financing.
Interim Options
In the event that Palm Clean does not exercise the 60% Option, but
completes portions of the requirements to exercise the 60% Option, Palm
Clean, at its election, will be granted one of three interim options in the
amounts of (a) 18%, (b) 35% and (c) 51% (the ‘Interim Options’). Palm
Clean then will have the further right either (a) not to proceed to a Joint
Venture with Cantech or (b) to proceed to a Joint Venture with Cantech.
If Palm Clean exercises any of the Interim Options and elects not to
proceed to a Joint Venture with Cantech, then Cantech will have the right
to purchase from Palm Clean (the ‘Buy-Back Right’) any interest in the
Property earned by Palm Clean under any of these Interim Options for the
purchase price being the lesser of (a) what the Asian Corporation put into
the Property and (b) $4.3 Million. The Buy-Back Right is exercisable up to
the earlier of (a) 10 years from the date of the exercise of the Interim
Option and (b) one year following the date on which Cantech receives not
less than $3.3 Million under a different joint venture agreement with a
third party.
If Palm Clean exercises any of the Interim Options and elects to proceed to
a Joint Venture, then Palm Clean will again be required to put the Lucky
Ship Property into continuous production and fully finance the Joint
Venture.
Pre-Feasibility Study
The Company has retained A.C.A. Howe International of Toronto, Ontario and
London, England to conduct a pre-feasibility study on the Lucky Ship
Property.
Resumption of Drilling of Deep Hole
Drilling of the 1100 metre diamond drill hole LS06-68 will commence this
week.
As previously announced, except for the completion of the deep hole,
Cantech has completed Phase 3 drilling program on the Lucky Ship Property.
As was announced previously, the last hole planned for the summer 2006
drill program was intended to be a deep hole (1100 metres) that would test
an area on the northwest side of the deposit that could contain an
additional Mo resource at depth.
Deep hole LS06-68 was stopped in mid September when highly fractured rock
was encountered at 267.3 metres depth. Cantech has hired Cyr Drilling of
West Saint Paul, Manitoba to complete this hole. A drill is now being
mobilized onto the property and drilling should commence within a few days
of this release. Once the drill is in position, hole LS06-68 will be
continued from its current depth to a target depth of 1100 metres. This
hole is being drilled at azimuth 325 degrees and inclination -87 degrees
and is targeting a zone of molybdenum mineralization that was encountered
in hole LS06-61 and two previous Amax drill holes, LS65-12 and LS65-16
between 500 to 760 metres below surface. There is no drill hole
information below 760 metres from surface in the area of these
intersections and it is currently not known how much deeper the molybdenum
mineralization extends to. If hole LS06-68 goes to its target depth it
will test the deposit to a depth of approximately 1100 metres below
surface. It is anticipated that it will take approximately 3 weeks to
reach this depth.
Updated Resource Calculation
The objective of Cantech’s Phase 3 Drill Program was to better define the
grade and width of the Lucky Ship deposit at depths greater than 100 metres
below surface particularly along the north side of the deposit and to
conduct exploration drilling in the eastern part of the deposit, which
recent computer modeling shows to be open. Previous resource calculations
by Dr. N.C. Carter placed that part of the deposit below 100 metres from
surface in the Inferred category due to lack of drill hole information.
The recently completed drill program has better defined the grade and
extent of the deposit at depth and this information will be used to prepare
a revised resource calculation. Cantech now has all the assay results from
the Phase 3 Drill Program and will compile this data on sections in support
of completion of a revised resource estimate to be done by Dr. Carter.
The previous resource calculation was set out in Dr. Carter’s June 9, 2006
National Instrument 43-101 Report which was filed in SEDAR.com on June 16,
2006. Dr. Carter summarized the resource calculation as follows (see page
2 of his Technical Report):
‘Current mineral resource estimates are based on the results of more than
4935 metres of diamond drilling in 28 holes completed by New Cantech
Ventures Inc. in 2005 and 2006 and in part on results obtained from more
than 10000 metres of diamond drilling (23 holes) undertaken by Amax
Exploration Inc. between 1964 and 1968. Estimates of Indicated and Inferred
Mineral Resources at cutoff grades of 0.030% and 0.060% Mo (molybdenum) are
summarized in the following table.
Indicated Mineral Inferred Mineral
Resource Resource
Cutoff Grade Tonnes Mo (%) Tonnes Mo(%)
(millions) (millions)
0,030 % Mo 19,4 0,076 33,9 0,069
0,060 % Mo 12,7 0,089 19,4 0,088
The Indicated Mineral Resources were defined by 2005 and 2006 drilling
which consisted of several inclined holes on each of nine sections spaced
50 metres apart. These holes were designed to test the annular mineral zone
at depths of between 50 and 100 metres below surface. 1960s Amax drilling
tested the mineralized zone at greater depths and results of this drilling
assisted in defining Inferred Mineral Resources which are directly below
the indicated resources and have been projected to vertical depths of
between 50 and 350 metres below surface. This mineralized zone remains open
to depth.’
MOU with SK Not Proceeding
The non binding Memorandum of Understanding with SK Networks Co., Ltd.
announced on September 28, 2006 will not be proceeding.
For more information please contact Dalton B. DuPasquier, President & CEO
of New Cantech Ventures Inc., at (604) 541-7288 or visit Cantech’s website
at http://www.newcantech.com.
ON BEHALF OF THE BOARD OF DIRECTORS
“Dalton DuPasquier”
NEW CANTECH VENTURES INC.
(c)DGAP 14.11.2006
—————————————————————————
Language: English
Issuer: New Cantech Ventures Inc.
Suite 201 – 14881 Marine Drive
V4B 1C2 White Rock, B.C. Kanada
Phone: +1 604 541 7288
Fax: +1 604 541 7286
E-mail: kenya1@telus.net
WWW: www.newcantech.com
ISIN: CA6431661017
WKN: 121407
Indices:
Listed: Freiverkehr in München; Open Market in Frankfurt
End of News DGAP News-Service
—————————————————————————
Latest News
Latest Reports
No Reports found
Upcoming Events
No Events found
Webcasts
No Webcasts found