Another extension, but they took K3 and K4 as well.
VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 4, 2011) - MARIFIL MINES LTD. (TSX VENTURE:MFM) ("Marifil" or "the Company") announces that it has signed an Amendment to the Letter of Intent that Marifil and Marifil's subsidiary, Oxbow Holdings Corp., signed with Saccharum Energy Corp. (TSX VENTURE:SHM) of Calgary, AB, for the K-2 Potash property in Neuquen Province, Argentina. This amendment expands the original Agreement to include the terms of a proposed joint venture between the Company and Saccharum whereby Saccharum can earn up to a 70% interest in Marifil's K-3 and K-4 properties.
Saccharum has agreed to pay $50,000 for a non-refundable, exclusive 30 day extension of the due diligence period to check title and arrange financing. If Sacchaarum elects to proceed, then $25,000 of this payment shall apply to the purchase of the Oxbow shares as described below.
Under the revised K-2 Agreement Saccharum agrees to purchase all of the shares of Oxbow for a total price of US$366,481. Saccharum further agrees that Oxbow shareholders can accept either cash or Saccharum shares at a deemed price of C
.50 per Saccharum share. Marifil then agrees to restructure its underlying agreement with Oxbow whereby Saccharum can earn up to a 70% interest in the K-2 property. Marifil shall retain a 1.5% Net Smelter Royalty. Saccharum shall have the right to purchase Marifil's royalty for US$15,000,000.
Marifil further agrees that Saccharum can acquire up to a 70% interest in the K-3, and K-4 properties. If Marifil elects not to participate, its 30% interest shall be reduced to a 25% carried interest.
Saccharum will pay Marifil US$500,000 in cash plus 2,000,000 Saccharum common shares over three years for each of the three properties for a total payment to Marifil of $1,500,000 and 6,000,000 shares. The first year's payment to Marifil will be US$450,000 in cash and 3,000,000 shares upon Saccharum's completion of a financing.
Saccharum further agrees to spend US$4,500,000 in work over the next four years on each of the properties; as follows: US$300,000 during Year 1, $1,350,000 during Year 2, $1,350,000 during Year 3, and US$1,500,000 during Year 4. Work obligation and payment terms shall be identical for the K-2 and K-4 properties.
Saccharum will also pay Marifil performance bonuses of 1,500,000 shares upon completion of a positive NI 43-101 compliant ore resource and a further 1,500,000 shares following completion of a Feasibility Study. These bonus shares shall be a one-time payment applicable to the first property only. If Saccharum's share structure exceeds 75,000,000 shares during this agreement the shares payable to Marifil shall be adjusted upward proportionately. Upon completion of Saccharm's earn-in all further expenditures shall be shared 70:30. If Marifil fails to pay its share working interest shall be reduced to a 25% carried interest.
Mr. John Hite remarks, "We believe this is an important milestone for the Company. We will now have a well-funded company exploring the second largest land package in the Neuquen Basin. Our work has identified an abandoned oil well hole on the K-3 property which hit 4 meters grading 20 to 22% K2O at a depth of 221.5 meters. This high grade zone, located at shallow depth will be an ideal target for the early drilling. This shallow zone may be amenable to low cost underground mining."
This agreement is subject to approval by the Boards of Directors of Saccharum, Marifil, and Oxbow and the TSX. A small finder's fee is payable to a third party.
For further information regarding Marifil Mines Ltd., please refer to the Company's filings available on SEDAR (Http://www.sedar.com) or at Marifil's Website (Http://www.marifilmines.com).
This press release has been reviewed and approved by John Hite, President of Marifil Mines Ltd. and by Richard Walters, Vice President under whose directions the exploration program is being carried out. Mr. Hite and Mr. Walters are Qualified Persons as defined by National Instrument