Sanatana Responds to Trelawney Easement Application on Watershed Property
Sanatana Responds to Trelawney Easement Application on Watershed Property
VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 04/29/13 -- Sanatana Resources Inc. ("Sanatana" or the "Company") (TSX VENTURE:STA) provides an update to its shareholders with respect to the Watershed Property. Set out below is a summary of (i) recent developments with respect to the Watershed Property and (ii) a historical review of the binding agreement governing the Watershed Property.
Peter Miles, President and Chief Executive Officer of Sanatana, stated, "On Friday, April 26, 2013, Trelawney Mining and Exploration Inc. (a subsidiary of IAMGOLD Corporation) filed an application with the Ontario Mining and Lands Commissioner in connection with proposed easements on the Watershed Property. The Commissioner made an order for Trelawney and Sanatana to file materials in support of their positions by June 3, 2013 and July 3, 2013, respectively. We object to the proposed easements based on a number of grounds and we look forward to the opportunity to make our position known to the Commissioner. A copy of the "Order to File" materials with the Commissioner will be posted on our website at www.sanatanaresources.com." Mr. Miles further stated, "Sanatana has a contractual right with Trelawney Augen Acquisition Corp. (also a subsidiary of IAMGOLD) to acquire up to a 51% undivided interest in the Watershed Property free and clear of all encumbrances - including, for example, easements. We will defend the rights that we are contractually entitled to."
Recent Developments with Respect to the Watershed Property
On Friday, April 26, 2013, Trelawney Mining and Exploration Inc. ("Trelawney"), a subsidiary of IAMGOLD Corporation ("IAMGOLD"), filed an application with the Ontario Mining and Lands Commissioner (the "Commissioner") with respect to proposed easement rights on the Watershed Property. The Commissioner subsequently made an order for Trelawney and Sanatana to file materials in support of their positions by June 3, 2013 and July 3, 2013, respectively (together, the "Order to File"). As a result of the Order to File, the Provincial Recording Office, Ministry of Northern Development and Mines, has or will note "Pending Proceedings" on the abstracts of the subject mineral claims, being P-3004844, 3010239, 3014374, 3017665 to 3017668, both inclusive, 3018411, 3018437, 3019033, 4203839, 4203852, 4203294, 4209355, 4227171, 4240907 and 4240908.
Sanatana objects to the proposed easements on a number of grounds and the Company looks forward to the opportunity to make its position known to the Commissioner.
Summary of the Option and Joint Venture Agreement - Watershed Property
Sanatana entered into an option and joint venture agreement on the Watershed Property with Augen Gold Corp. ("Augen") (as it then was) effective February 14, 2011 (the "Option and JV Agreement"). Augen was subsequently acquired by Trelawney and, through a corporate reorganization, Augen was renamed "Trelawney Augen Acquisition Corp." ("TAAC"). Trelawney was then subsequently acquired by IAMGOLD.
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 (as it then was) are available on SEDAR at www.sedar.com under Sanatana's SEDAR profile and TAAC's SEDAR profile, respectively. A redacted copy of the Option and JV Agreement was also posted to Sanatana's SEDAR profile on May 8, 2012 and can be accessed at www.sedar.com. Readers are encouraged to access and review a copy of the Option and JV Agreement.
50% Interest and ROFR Claims
Under the terms of the Option and JV Agreement, Sanatana has the option to acquire up to a 51% undivided interest in the rights to 46 mineral concessions in Ontario (the "Property"), free and clear of all encumbrances. The Property is located within the townships of Yeo, Chester, Neveille and Benneweis and totals approximately 19,006 acres.
In November 2012, Sanatana exercised its first option and acquired a 50% undivided interest in the Property (the "50% Interest"). In order to exercise the 50% Interest, Sanatana paid to TAAC $150,000 in cash, issued an aggregate of 5,000,000 common shares and incurred over $5,000,000 in work costs.
Pursuant to the terms of the Option and JV Agreement, in addition to the option to acquire up to a 51% interest in the Property, Sanatana has the right of first refusal to acquire, on or before March 23, 2014, nine additional mineral claims from TAAC (the "ROFR Claims"). The ROFR Claims are located in the Township of Chester and comprise approximately 736 acres. A map of the Property, the ROFR Claims and certain mineral tenure held by IAMGOLD is included at the end of this news release.
Pursuant to the terms of the Option and JV Agreement, Sanatana is the registered owner of the Property, which is to be held in trust for the benefit of the parties in accordance with their respective interests therein.
Additional 1% Interest and Joint Venture
Pursuant to the terms of the Option and JV Agreement, Sanatana has the right to earn a further 1% interest in the Property, for a total undivided interest of 51% (the "51% Interest"), free and clear of all encumbrances. In order to earn the 51% Interest, Sanatana must prepare and deliver to TAAC (at Sanatana's sole cost) a pre-feasibility study on or before March 23, 2016. Sanatana is considering 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 Property on the terms described below. 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 no later than March 23, 2016.
Under the terms of the Option and JV Agreement, Sanatana has the right to be the manager of the Joint Venture (the "Manager") when it is formed and will manage the work program(s) as directed by a management committee set up based on the parties' respective interests in the Joint Venture (the "Management Committee"). 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.
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 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 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. In addition to the $5,000,000 in work costs that Sanatana has spent to acquire the 50% Interest, Sanatana has to date expended further work costs of approximately $3,000,000 on the Property.
Area of Interest
The Property is protected by an area of interest extending at least one kilometre from any portion of the Property (the "AOI") as it existed as of the date of the Option and JV Agreement. If a party to the Option and JV Agreement (or its affiliate) acquires any interest in mineral claims or any other form of mineral tenure located wholly or partly in the AOI (the "AOI Tenure"), then such acquiring party must immediately notify the other party and provide the other party with (i) details of the acquisition/staking costs associated therewith and (ii) all details in its possession with respect to the nature of the AOI Tenure and the known mineralization thereon. As noted above, the AOI is at least one kilometre but the exact size of the AOI was redacted in the copy of the Option and JV Agreement Sanatana filed on SEDAR.
Pursuant to the Option and JV Agreement, TAAC has the right to purchase up to 10% of any securities issued by Sanatana in a brokered or non-brokered private placement, provided that TAAC qualifies under an exemption provided by National Instrument 45-106 - Prospectus and Registration Exemptions (the "Participation Right"). The Participation Right will terminate immediately upon the termination of the Option and JV Agreement or the formation of the Joint Venture. TAAC is prohibited from exercising the Participation Right if it (or any person or company acting jointly or in concert with TAAC) would in the aggregate beneficially own, or exercise control or direction over, 20% or more of the total issued and outstanding voting securities of Sanatana, immediately after giving effect to such exercise.
Map of the Property, the ROFR Claims and Certain of IAMGOLD's Properties
A map of the Property, the ROFR Claims, and certain of IAMGOLD's properties is set out below. The map has a scale in kilometres and a reader can see the scope of the AOI by drawing a one kilometre circle from any point of the Property. As noted above, the AOI is at least one kilometre.
To view the Map associated with this release, please visit the following link: http://media3.marketwire.com/docs/sta429-F1.pdf.
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 shareholder 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).
The technical portions of this news release were reviewed and approved by Troy Gill, BSc. MAIG, Exploration Manager for the Company, a "qualified person" as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects.
SANATANA RESOURCES INC.
Peter Miles, President and Chief Executive Officer
Cautionary Statement Regarding "Forward-Looking" Information
Some of the statements contained in this press release are forward-looking statements and information within the meaning of applicable securities laws. Forward-looking statements and information can be identified by the use of words such as "plans", "expects", "intends", "is expected", "potential", "suggests" or variations of such words or phrases, or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements and information are not historical facts and are subject to a number of risks and uncertainties beyond Sanatana's control. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Accordingly, readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, except as may be required by law.
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