Press Release
Source: Sarissa
Resources Inc.
Sarissa Resources Announces Letter of
Intent Update
FOR IMMEDIATE RELEASE: Oakville, ON, October
26th, 2012 – Sarissa Resources Inc. (“Sarissa”), through
its wholly-owned subsidiary Nio-Star Corp. (“Nio-Star” or “the
Company”) is pleased to release this update on the previously
announced Letter of Intent (“LOI”) signed in July.
At that time Nio-Star entered into an LOI to
form a Joint Venture company (the “JV”) to finance the advanced
exploration of Nio-Star’s Nemegosenda niobium property (the
“Property”). Certain confidentiality clauses had been included in
the LOI, some of which have now been waived, and the Parties
involved are pleased to update shareholders with further details
about the proposed JV with a Chinese mining State Owned Enterprise
Company (“SOE”).
Summary terms of the JV:
- Upon signing the definitive JV Agreement, the
SOE will have the right to earn 51% of the new JV Company, with
Nio-Star retaining 49%.
- To earn their
51% of the JV, the SOE will fund the advanced exploration of
the Property to produce a Bankable
Feasibility Study (the “Study”), by depositing to the JV and
Nio-Star twenty million dollars (CAD$20,000,000) to be spent on the
Study and the maintenance, exploration and development of the
Property, and associated corporate costs.
- In addition, the SOE shall pay to Nio-Star a fee
of twelve million, two hundred and fifty thousand dollars
(CAD$12,250,000) as:
a.
One million dollars (CAD$1,000,000) within 30 days of signing a
Definitive Joint Venture Agreement and having obtained approval of
the appropriate Chinese government agencies.
b.
The balance, eleven million two hundred and fifty thousand dollars
(CAD$11,250,000) within 30 days of completion of the Study.
In addition to the foregoing, once the SOE has
earned its interest, industry standard dilution clauses are
included should one side or the other decide not to participate in
further financing of the project. In the
case of Nio-Star the dilution clauses will stipulate that
Nio-Star’s interest may not be diluted below a 20% carried
interest.
As well, the LOI made provision for the SOE to
pay a fee to Nio-Star to have an
exclusivity period to complete due diligence and the JV Agreement.
This exclusivity period was until October 31, 2012. There were
delays in obtaining travel permits for certain key people from the
SOE to complete the planned activities and in order to compensate
for this time delay the Parties have mutually agreed to extend the
exclusivity period until February 28, 2013.
In order to advance the project during this
exclusive period, Nio-Star and the SOE have worked together to
collect approximately 900 kgs of rock
samples from the adit area of the
project’s D Zone. These are being shipped to China for
metallurgical and process testing. Full results from this testing
program are expected to be completed over approximately 3 months.
These tests may be used toward the Study, and are likely to speed
up the process.
Further details and interim updates on this
program, as well as other ongoing corporate initiatives, will be
announced as they progress.
Safe Harbor
This press release
contains statements, which may constitute "forward-looking
statements" within the meaning of the Securities Act of 1933 and
the Securities Exchange Act of 1934, as amended by the Private
Securities Litigation Reform Act of 1995. Those statements include
statements regarding the intent, belief or current expectations of
Sarissa Resources Inc. and Nio-Star Corp., as well as members of
their respective management, in addition to the assumptions on
which such statements are based. Prospective investors are
cautioned that any such forward-looking statements are not
guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from
those contemplated by such forward-looking statements. Important
factors currently known to management that could cause actual
results to differ materially from those in forward-statements
include fluctuation of operating results, the ability to compete
successfully and the ability to complete before-mentioned
transactions. Neither Sarissa nor Nio-Star undertakes any
obligation to update or revise forward-looking statements to
reflect changed assumptions, the occurrence of unanticipated events
or changes to future operating results.
About Sarissa
Resources Inc.
Sarissa Resources Inc. is a junior exploration
company with interests in properties in Northern Ontario, Canada.
The Company is specifically focused on the development of its
Nemegosenda niobium project as well as its Shining Tree gold
project.
FOR FURTHER
INFORMATION contact:
www.sarissaresources.com
Public Relations:
Merle Goertz
North America:
866-307-1331
Hong Kong: 852 8174
5996
