American CuMo Mining Subsidiary Enters into Limited Liability Company Agreement Providing up to US$200 Million in Financing for Joint Venture Company

By ICMC on November 21, 2016

American CuMo Mining Corporation (CuMoCo or the Company) (TSXV: MLY; OTC-Pink: MLYCF) announces that its wholly-owned subsidiary, Idaho CuMo Mining Corporation (“Idaho CuMo”) executed an arm’s-length Limited Liability Company Agreement (the “LLC Agreement”) with Platinum Resources International Limited, a corporation existing under the laws of the British Virgin Islands (“PRI”) and having its head office located in Hong Kong, to form Poly Resources LLC (“Poly”), a Delaware-incorporated limited liability company, for the purpose of conducting mining related activities as a joint venture. Mr. Yangbo Cai, CEO of PRI, executed the LLC Agreement on behalf of PRI.

Idaho CuMo currently holds 18,060 shares of Poly, representing a 100% interest, after having contributed into Poly its interest in the option agreement dated October 31, 2016 pursuant to which Idaho CuMo has the option to purchase a 100% interest in the Calida Mine gold property in Idaho, and having also assigned to Poly the exclusive right to purchase up to 20% of Idaho CuMo’s shares for an aggregate purchase price of US$100 million. Idaho CuMo will use the US$100 million proceeds from the sale of the shares to advance the CuMo Project to feasibility.

Subject to receipt of Hong Kong regulatory approval, PRI has the exclusive rights under the LLC Agreement to contribute or cause to contribute the sum of US$10 million within 90 days and to contribute or cause to contribute the sum of US$190 million over the period of 30 months. For each payment of US$10 million, PRI is to be issued 3,856 shares in Poly. Following the 20th payment of US$10 million within the 30-month period, PRI would have contributed US$200 million and received 77,120 shares of Poly. In consideration for arranging this transaction, Strategic Venture Fund Ltd. is to be assigned 4,820 shares of Poly upon Poly’s receipt of the first US$10 million from PRI within 90 days. Once all shares have been issued as per the LLC Agreement, Poly would have a total of 100,000 shares outstanding, of which CuMo would own 18,060.

“I am extremely pleased to have executed this LLC Agreement on behalf of Idaho CuMo Mining at a signing ceremony with PRI in Shenzhen, China. We believe that it provides a tremendous opportunity to accelerate the development of both the CuMo and Calida projects,” said Trevor Burns, Executive Chairman of Idaho CuMo Mining Corporation.

The payments to Poly to be made by PRI in the aggregate of US$200 million may be settled by a combination of cash, convertible bonds or shares issued by a recognized member of the Hong Kong Stock Exchange with payment in the form of convertible bonds or consideration shares and terms being subject to approval by all members of the management of Poly. If PRI fails to make any portion of its contribution, including the initial US$10 million within 90 days, and such failure is not cured before receiving written notice of such failure, then PRI would have deemed to have resigned as a member of Poly, provided that PRI may also voluntarily resign as a member of Poly at its sole discretion. In lieu of resignation, if Idaho CuMo provides written notice of consent, PRI’s interest in Poly would be fixed at the number of Poly shares that it then held. If and when PRI has made the entire US$200 million contribution, the members would make capital contributions to adopted programs and budgets on a pro rata basis.

“This agreement is a major step forward for CuMoCo and its shareholders. We welcome our new partner and look forward to creating substantial jobs and value for the economy of Idaho as we move our projects forward,” said Shaun Dykes, President and CEO of CuMoCo.

This transaction is subject to receipt of regulatory approval.

Shaun Dykes, M.Sc. (Eng); P.Geo (#20044), a Qualified Person as defined in NI 43-101, is responsible for the review of all scientific and technical information contained in this release.

About American CuMo Mining Corporation

American CuMo Mining Corporation is focused on advancing its CuMo Project towards feasibility. Management is continuing to build an even stronger foundation from which to move the Company and the CuMo Project forward. For more information, please visit www.cumoco.com and www.cumoproject.com

 

Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this new release.

Forward-looking information

This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation including, but not limited to, statements that address activities, events or developments that the Company expects or anticipates will or may occur in the future, such as the Company’s ability to successfully negotiate the Definitive Agreement with the Chinese Partners, the Company’s ability to move the CuMo Project through development to feasibility and production, and for the Company to become one of the largest and lowest-cost molybdenum producers in the world as well as a significant producer of copper and silver. Forward-looking information is based on a number of material factors and assumptions, including the result of exploration activities, the ability of the Company to raise the financing for a feasibility study and to put the CuMo project into production, that no labour shortages or delays are experienced, that plant and equipment function as specified that the Court will not intervene with the Company’s proposed exploration activities at the CuMo Project, and the ability of the Company to obtain all requisite permits and licenses to advance the CuMo Project and eventually bring it into production. Forward-looking information involves known and unknown risks, future events, conditions, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future prediction, projection or forecast expressed or implied by the forward-looking information. Such factors include, among others, the interpretation and actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of molybdenum, silver and copper; possible variations in grade or recovery rates; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing, as well as those factors disclosed in the Company’s publicly filed documents, including the Company’s Management’s Discussion and Analysis for the fiscal year ended June 30, 2016. There may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information.

 

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