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VANCOUVER, Oct. 19, 2011 /CNW/ - Network Exploration Ltd. (the "Company" or "Network") (TSX.V: NET) is pleased to announce the signing of the definitive agreement (the "Agreement") between Network and Lara Exploration Ltd. ("Lara") under which Network has the option to acquire up to a 75% undivided working interest (the "Option") in and to certain mineral concessions known as the Picha project (the "Property"), located approximately 125km NE of Arequipa Peru as referred to in the Company's press release dated April 11, 2011.
Picha Project Option
Under the terms of the Agreement, the Company may earn an initial 55% undivided working interest in the Property by paying to Lara an aggregate of US$200,000, with US$50,000 payable upon execution of the LOI (paid), an additional US$50,000 payable upon acceptance of the Agreement by the TSX Venture Exchange (the "Approval Date") and an additional US$100,000 on the date that is 12 months following the Approval Date. The Company has also agreed to issue to Lara 3,500,000 units (the "Units") within five days of the Approval Date. Each Unit is comprised of one common share in the capital of the Company (a "Common Share") and one non-transferable Common Share purchase warrant (a "Warrant"). Each Warrant will entitle Lara to purchase one Common Share at a price of $0.10 per common share, exercisable for a period of two years from the Approval Date. The Company has also agreed to fund aggregate expenditures of US$3,000,000 on the Property, with US$500,000 to be funded on or before the date that is one year following the Approval Date, an additional US$1,000,000 to be funded on or before the date that is two years following the Approval and an additional US$1,500,000 to be funded on or before the date that is three years following the Approval Date. Upon the completion of the above payments, issuances and funding, the Company will hold a 55% undivided working interest in the Property.
Under the terms of the Agreement, the Company then may earn an additional 20% undivided working interest (for a total undivided interest of 75%) in the Property by paying to Lara US$1,000,000 within 30 days of electing to exercise this additional option (the "Election Date") and funding aggregate expenditures of US$5,000,000 on the Property, with US$1,000,000 to be funded on or before the date that is one year following the Election Date, an additional US$1,500,000 to be funded on or before the date that is two years following the Election Date and an additional US$2,500,000 to be funded on or before the date that is three years from the Election Date. The Company must also complete a pre-feasibility study compliant with National Instrument 43-101 "Standards for Disclosure of Mineral Projects" (the "Pre-Feasibility Study") and any such costs incurred in connection with the completion of the Pre-Feasibility Study will be included as work expenditures required to earn the additional 20% undivided working interest in the Property. Upon completion of the above payments and funding, the Company will hold a 75% undivided working interest in the Property.
Picha Project
The 6,000 hectare Picha Copper-Silver Project is located within the Tertiary Volcanic Arc of Southern Peru, host to various epithermal gold-silver deposits and copper porphyry-skarn deposits. The Property is adjacent to the properties of Gold Fields Limited and Compañía de Minas Buenaventura S.A., that are host to the recent Chucapaca discovery, with reported mineral resources of 5.6 million gold equivalent ounces. Lara's exploration work on the Picha Project in 2010, found widespread alteration, brecciation and vein stockworking, indicative of the presence of a porphyry system at depth, and outlined seven zones with anomalous copper and associated silver values (see Lara news release of September 21, 2010). Several of these mineral occurrences have been mined on a small scale in the past, from adits, shafts and small open pits, but to date the Property has never been drill-tested.
Quality Control and Qualified Person
This press release has been approved by Bob Friesen, P. Geo, a director of the Company and the Company's Qualified Person.
Closing of the transaction is subject to a number of conditions
The completion of the Option is subject to a number of conditions, including but not limited to the receipt of a satisfactory title opinion with respect to the Property, approval of a National Instrument 43-101 compliant technical report on the Property by the TSX Venture Exchange, financing, and the acceptance of the Agreement by the TSX Venture Exchange.
About Network
Network Exploration Ltd. is a mineral exploration company committed to building shareholder value through the acquisition of base and precious metal properties in North and South America. For additional information, please contact the office at 604-638-7363 or toll-free at 1-866-637-5138, or visit www.networkexploration.com.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
ON BEHALF OF THE BOARD OF DIRECTORS
"Alexander Helmel"
President
Forward-Looking Statements: This news release contains forward-looking statements regarding the future success of the business of the Company that is subject to risk and uncertainties. Examples of such forward-looking statements include, but are not limited to, statements concerning the Company's acquisition of the interest in the Picha Project, expectations concerning timing and success of the review of the NI 43-101 technical report on the Picha Project and exploration activities on the Picha project and generally, government regulation of exploration and mining operations, indications and benefits of exploration, drilling test work and engineering assessments, environmental risks, title disputes or claims, and the Company's intention to raise additional capital and financing. These forward-looking statements involve known and unknown risk and uncertainties that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied in these forward-looking statements. These risks include risks related to the closing of the transaction, key personnel, competition, risks related to newly acquired businesses, uncertainty and dilution as a result of additional financing and the ability of the Company to service its current debt obligations, as well as the risk factors described in the Company's Management Discussion and Analysis filed on SEDAR at www.sedar.com and the risks described in any Management Information Circular of the Company. The forward-looking statements contained herein are made as of the date of this news release and are expressly qualified in their entirety by this cautionary statement. Except as required by law, the Company undertakes no obligation to publicly update or revise any such forward-looking statements to reflect any change in its expectations or in events, conditions or circumstances on which any such forward-looking statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.
THE TSX VENTURE EXCHANGE HAS NOT YET REVIEWED AND DOES NOT TAKE
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT OF THIS NEWS
RELEASE. This news release contains certain "Forward-Looking
Statements" within the meaning of Section 21E of the United States
Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical fact, included herein are forward-looking
statements that involve various risks and uncertainties. There can be
no assurance that such statements will prove to be accurate, and actual
results and future events could differ materially from those
anticipated in such statements. Important factors that could cause
actual results to differ materially from the Company's expectations are
disclosed in the Company's documents filed from time to time with the
British Columbia Securities Commission and the United States Securities
& Exchange Commission.