Sanatana Earns 50% Interest in Watershed Property
Sanatana Earns 50% Interest in Watershed Property
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 11/28/12 -- Sanatana Resources Inc. ("Sanatana" or the "Company") (TSX VENTURE:STA) announces further to its news release of September 12, 2012 (the "September NR") that the Company has issued a further 1,500,000 common shares to Trelawney Augen Acquisition Corp. ("TAAC") in connection with the option and joint venture agreement (the "Option and JV Agreement") for the Watershed Property. Such common shares have a hold period expiring on March 16, 2013 as required by applicable securities laws.
Under the terms of the Option and JV Agreement in order for Sanatana to earn a 50% interest (the "50% Interest") in the Watershed Property it was required to (i) pay TAAC $150,000, (ii) issue TAAC a total of 5,000,000 common shares in staged intervals with the last share issuance to be made on or before March 23, 2013 and (iii) incur work costs on the Watershed Property of not less than $5,000,000 in staged intervals with the last work cost requirement to be incurred on or before March 23, 2014. Sanatana has satisfied all earn-in requirements and that it has exercised and has acquired the 50% Interest. As disclosed in the September NR the mineral claims comprising the Watershed Property are legally registered in Sanatana's name and taking into account Sanatana's exercise of the 50% Interest the mineral claims comprising the Watershed Property are now beneficially held 50% by Sanatana and 50% by TAAC.
Peter Miles, CEO of Sanatana, stated, "Acquiring the 50% Interest in the Watershed Property is a significant step forward for Sanatana. We are assessing our options and will determine whether it is in the best interests of shareholders to immediately move forward with the joint venture or to exercise our right to acquire an additional 1% undivided interest in the Watershed Property and then enter into the joint venture."
Additional 1% Interest
Pursuant to the terms of the Option and JV Agreement, Sanatana has the right to earn a further 1% interest in the Watershed Property, for a total undivided interest of 51% (the "51% Interest"). In order to earn the 51% Interest Sanatana must prepare and deliver to TAAC a pre-feasibility study on or before March 23, 2016. Sanatana is consider ing its options in this regard and has until March 23, 2016 to decide whether to exercise its right to acquire the 51% Interest. If Sanatana exercises its right to acquire the 51% Interest the parties would on the date of such exercise form a joint venture (the "Joint Venture") to further explore the Watershed Property on terms described in the September NR. Alternatively, if Sanatana surrenders its right to acquire the 51% Interest the parties would form the Joint Venture on the date Sanatana surrendered its right to acquire the 51% Interest and in any event form the Joint Venture not later than March 23, 2016.
Prior to the formation of the Joint Venture which could, at Sanatana's election, be as late as March 23, 2016, Sanatana has elected to continue to spend work costs on the Watershed Property. Under the terms of the Option and JV Agreement Sanatana will continue to be credited for such work costs. Specifically, any work costs made or incurred by Sanatana in excess of the work costs required to earn its interest in the Watershed Property will be credited to Sanatana's contribution to the first work program after formation of the Joint Venture and will not automatically dilute the participating interest of TAAC on formation. Under the terms of the Option and JV Agreement Sanatana has the right to be the manager (the "Manager") of the Joint Venture when it is formed and will manage the work program(s) as directed by a management committee (the "Management Committee") set up based on the parties' respective interests in the Joint Venture. Ultimately if Sanatana acquires the 51% Interest (and assuming that it does not dilute its interest in the Joint Venture) Sanatana will control the Management Committee and thereby control the instructions the Management Committee gives to the Manager to establish programs. Sanatana has spent excess work costs to date of approximately $1,000,000 and expects to spend not less than an additional $1,984,455 (the "Additional Expenditures") on the Watershed Property before December 31, 2013. The Additional Expenditures represent the funds Sanatana recently raised in a flow-through private placement (see Sanatana's news release dated November 9, 2012).
Additional Information Regarding the Option and JV Agreement
The Option and JV Agreement was originally announced on February 16, 2011 and was accepted for filing by the TSX Venture Exchange on March 23, 2011. Copies of the news releases issued by Sanatana and Augen Gold Corp. (as it then was) are available on SEDAR at www.sedar.com under Sanatana's SEDAR profile and TAAC's SEDAR profile respectively. A copy of the Option and JV Agreement was also posted to Sanatana's SEDAR profile on May 8, 2012.
About the Company
Sanatana Resources Inc. is a Canadian mineral exploration and development company focused on its Watershed property in Ontario. Sanatana entered into an option and joint venture agreement with Trelawney Augen Acquisition Corp. (formerly Augen Gold Corp.) ("TAAC") which grants Sanatana an option to acquire up to 51% of the Watershed property. On June 21, 2012 IAMGOLD Corporation completed its acquisition of Trelawney Mining and Exploration Inc. and became the sole indirect shareholders of TAAC. With an experienced management team and board of directors, the Company has the ability required to identify, develop and fund economic mineral properties. Sanatana is based in Vancouver and is listed on the TSX Venture Exchange (TSX VENTURE:STA).
SANATANA RESOURCES INC.
Peter Miles, President and Chief Executive Officer
Neither TSX Venture Exchange nor its Regulations Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts: Sanatana Resources Inc. Mr. Peter Miles President and Chief Executive Officer 604-408-6680 or Toll Free: 1-877-881-6680 604-408-6682 (FAX) email@example.com www.sanatanaresources.com