Zenyatta Acquires 100% Ownership of 'Vein Type' Graphite

Zenyatta Acquires 100% Ownership of 'Vein Type' Graphite Deposit from
Cliffs Natural Resources 
THUNDER BAY, ONTARIO -- (Marketwire) -- 11/21/12 -- Zenyatta Ventures
Ltd. ("Zenyatta" or "Company") (TSX VENTURE:ZEN) is pleased to
announce that the Company has reached an agreement with Cliffs
Natural Resources Exploration Canada Inc., an affiliate of Cliffs
Natural Resources Inc. (NYSE:CLF)(Paris:CLF) ("Cliffs"), for the
acquisition of 100% of the Albany graphite deposit.  
Zenyatta has recently exercised its right and acquired an 80%
interest in a claim block (4F) by having spent $10 million on
exploration over the last 2 years at the Albany project. The Company
has now acquired Cliffs' remaining 20% interest (total of 100%) in
the claim block referred to as 4F, which holds the Albany graphite
deposit ("Block 4F Claims"). Pursuant to the terms of the
transaction, Zenyatta and Cliffs agree to the following with respect
to the Block 4F Claims: 

a.  Zenyatta will issue to Cliffs (or its designated affiliate) a total of
    1,250,000 shares as follows: (i) 500,000 shares upon signing the
    agreement; (ii) 250,000 shares to be issued upon completion of a pre-
    feasibility study; and (iii) 500,000 shares to be issued upon completion
    of a feasibility study; and 
b.  Zenyatta will grant Cliffs a net smelter return royalty of 0.75% on the
    Block 4F Claims, of which 0.5% can be purchased at any time for

Aubrey Eveleigh, President and CEO of Zenyatta, stated "This
transaction is of strategic importance to our Company. We now own
100% of the Albany graphite deposit and, more importantly, have
eliminated the back-in right that Cliffs held under the original
agreement. This allows Zenyatta the liberty of negotiating with
another party, especially an end user of graphite, at any time along
the development path of our graphite deposit."  
Zenyatta is developing a rare 'vein-type' graphite deposit it
discovered in 2011 in northeastern Ontario, Canada. It is the only
and largest 'vein type' graphite deposit under development in the
world. Recently, a first pass beneficiation test at SGS Canada Inc.
("Lakefield") demonstrated a simple concentration and leaching
process capable of producing a 97.2% C (total) graphite product from
a rou
gh concentrate. Mineralogical work shows the graphite material
to be very simple and contains insignificant amounts of undesirable
material. Work is on-going to target ultra-high purity levels of
greater than 99.0% C with results from a second series of tests
expected soon. The Albany deposit is located 30km north of the Trans
Canada Highway, power line and natural gas pipeline near the
communities of Constance Lake First Nation and Hearst. A rail line is
located 70km away and an all-weather road approximately 4-5km from
the graphite deposit. The deposit is near surface, underneath glacial
till overburden. 
Prior to the sale of the Block 4F Claims, the Albany Project was
subject to an option and joint venture agreement between the parties
dated November 2, 2010 (the "First Amended Albany Agreement"). This
agreement is fully described in the prospectus of Zenyatta dated
December 15, 2010 and filed on www.sedar.com. Concurrent with the
sale of the Block 4F Claims, the parties entered into an amended
option agreement dated November 21, 2012 (the "Second Amended Albany
Agreement") with respect to the other claims in the Albany Project
(the "Other Claims"). The primary amendment to the First Amended
Albany Agreement is a variation of the earn-in expenditure
obligations. The following is a summary of the provisions of the
Second Amended Albany Agreement which is filed on www.sedar.com: 

--  Zenyatta Second Option to Increase Ownership from 25% to 80%. Pursuant
    to the Second Amended Albany Agreement the Company currently has a 25%
    interest in the Other Claims and an option (the "Second Option") to
    acquire a further 55% interest in the Other Claims. In order to exercise
    the Second Option, the Company must carry out and complete not less than
    3,000 meters of diamond drilling on targets located on the Other Claims
    and sample and analyse the drill core prior to December 31, 2014,
    provided that if prior to December 31, 2014, Zenyatta has not completed
    at least 3,000 meters of such drilling and Cliffs determines that
    targets should be drilled on the Other Claims located outside of the
    agreed targets, then Zenyatta will complete such drilling as requested
    by Cliffs on other targets on the Other Claims and sample and analyze
    the drill core, all prior to December 31, 2014. In addition, Zenyatta
    shall pay to Cliffs $55,000 on or before July 1, 2013. Although the
    Company is committed to this drilling program and intends to exercise
    the Second Option at this time, if the Company does not exercise the
    Second Option, the Parties shall associate as a joint venture pursuant
    to the terms of the Second Amended Albany Agreement in which the Company
    shall have a 25% participating interest and Cliffs shall have a 75%
    participating interest. 
--  Remaining Terms. The First Amended Albany Agreement provided for the
    following all of which have been adopted by the Second Amended Albany
    Agreement on the Other Claims: 1) Claw Back Right by exercisable by
    Cliffs upon exercise of Second Option. 2) Sole Funding by the Company
    after exercise of the Second Option by the Company in the event that
    Cliffs does not exercise the Claw-Back Right. 3) Claw Back Right
    exercisable by Cliffs upon satisfaction of Sole Funding Obligation. 4)
    Cliffs retains its right of first refusal and the right to nominate a
    director. 5) Eveleigh Geological Consulting Inc. ("EGC") retains certain
    benefits regarding cash payments upon reaching milestones and 2.0% NSR
    royalty, 1% of which can be purchased at anytime for $1,000,000 (EGC is
    a geological consulting company owned by Aubrey J. Eveleigh, the
    President, Chief Executive Officer and a director of the Company). These
    benefits were negotiated in 2010 by the parties in recognition of the
    initiative taken by EGC in recognizing the geological concept and the
    compilation of data which was the basis for staking claims over two
    years ago when the Albany project was first established. 

As noted above and for the purposes of National Instrument 62-103
early warning reporting, Cliffs Natural Resources Exploration Inc.,
an affiliate of Cliffs, was issued 500,000 shares of Zenyatta
pursuant to the terms of a purchase agreement between the parties
that governed the sale of the interest in the Block 4F Claims. In
addition, Cliffs (or its designated affiliate) has the right to
receive up to an additional 750,000 Zenyatta shares (on
pre-feasibility and feasibility studies) pursuant to the sale of the
interest in the Block 4F Claims. Before the sale of the interest in
the Block 4F Claims, Cliffs (and its affiliates) owned a total of
4,675,000 shares of Zenyatta and 3,200,000 common share purchase
warrants (the "Warrants"); 2,200,000 of which entitle the holder to
acquire one common share of Zenyatta for $1.00 until December 23,
2012, and 1,000,000 of which entitle the holder to acquire one common
share of Zenyatta for $1.50 until December 23, 2015. Cliffs (and its
affiliates) now hold 5,175,000 common shares of Zenyatta,
representing 12.7% of Zenyatta's outstanding shares. In the event
that the Warrants are fully exercised and all shares are issued
pursuant to 
the Block 4F Claims purchase agreement, Cliffs (and its
affiliates) would hold 9,125,000 Zenyatta shares, representing
approximately 20.5% of the total issued and outstanding shares of
Zenyatta calculated on a partially diluted basis and 15.4% on a fully
diluted basis. 
Cliffs (and its affiliates) hold the shares and Warrants of Zenyatta
for investment purposes and may, from time to time, acquire
additional securities of Zenyatta or dispose of such securities as it
may deem appropriate. Cliffs Natural Resources Exploration Inc.'s
address is c/o Cliffs Natural Resources Inc., 200 Public Square,
Suite 3300, Cleveland, OH 44114, and a copy of the applicable early
warning report can be obtained from counsel to Cliffs Natural
Resources Exploration Inc., Lawson Lundell LLP, Attention Khaled
Abdel-Barr at (604) 631-9233 or under Zenyatta's profile on SEDAR at
Cliffs (inclusive of its affiliates) is a "related party" of Zenyatta
as it is a holder of 10% or more of the issued and outstanding shares
of Zenyatta and, thereby, the sale of the interest in the Block 4F
Claims is a "related party transaction", as such terms are defined by
Multilateral Instrument 61-101- Protection of Minority Security
Holders in Special Transactions ("MI 61-101"). In addition, Aubrey J.
Eveleigh, President, Chief Executive Officer and a Director of the
Company is a "related party" by virtue of his interest in the Second
Amended Albany Agreement. MI 61-101 requires Zenyatta, in the absence
of exemptions, to obtain a formal valuation for, and minority
shareholder approval of, the "related party transaction". Zenyatta is
relying on the exemptions from the formal valuation and minority
approval requirements of MI 61-101 pursuant to which a formal
valuation and minority approval are not required in the event that at
the time the transaction is agreed to, neither the fair market value
of the subject matter of, nor the fair market value of the
consideration for, the transaction, insofar as it involves interested
parties, exceeds 25 per cent of Zenyatta's market capitalization. The
purchase of the interest in the Block 4F Claims was approved by the
directors of Zenyatta, all of whom are independent of Cliffs. 
Zenyatta now has 40,597,313 common shares issued and outstanding with
a total of 59,354,862 shares on a fully diluted basis. Mr. Aubrey
Eveleigh, P.Geo., President and CEO, is the "Qualified Person" under
NI 43-101 and has reviewed the technical information contained in
this news release. To find out more on Zenyatta Ventures Ltd., please
visit website www.zenyatta.ca. 
This News Release includes certain "forward-looking statements".
These statements are based on information currently available to the
Company and the Company provides no assurance that actual results
will meet management's expectations. Forward-looking statements
include estimates and statements that describe the Company's future
plans, objectives or goals, including words to the effect that the
Company or management expects a stated condition or result to occur.
Forward-looking statements may be identified by such terms as
"believes", "anticipates", "expects", "estimates", "may", "could",
"would", "will", "should" or "plan". Since forward-looking statements
are based on assumptions and address future events and conditions, by
their very nature they involve inherent risks and uncertainties.
Actual results relating to, among other things, results of
exploration, project development, reclamation and capital costs of
the Company's mineral properties, and the Company's financial
condition and prospects, could differ materially from those currently
anticipated in such statements for many reasons such as: changes in
general economic conditions and conditions in the financial markets;
changes in demand and prices for minerals; litigation, legislative,
environmental and other judicial, regulatory, political and
competitive developments; technological and operational difficulties
encountered in connection with the activities of the Company; and
other matters discussed in this news release. This list is not
exhaustive of the factors that may affect any of the Company's
forward-looking statements. These and other factors should be
considered carefully and readers should not place undue reliance on
the Company's forward-looking statements. The Company does not
undertake to update any forward-looking statement that may be made
from time to time by the Company or on its behalf, except in
accordance with applicable securities laws. 
Neither 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. 
Zenyatta Ventures Ltd.
Press spacebar to pause and continue. Press esc to stop.