Vancouver, British Columbia - April 8, 2011. Abacus Mining & Exploration Corporation (TSXV: AME "Abacus") is pleased to announce that it has completed the acquisitions contemplated under the Asset Purchase Agreement dated November 25, 2005, as amended (the "APA") with Teck Resources Limited ("Teck") pursuant to which certain assets of Teck's former Afton mine, and most notably the Iron Mask and Rainbow back-in rights, were acquired.
The APA provided for the sale by Teck to Abacus of the Iron Mask and Rainbow back-in rights that Teck held to certain Afton-Ajax mineral claims, as well as the tailings pond, mill, workshop and office buildings of the former Afton mine and the land upon which such buildings are situated. Such assets were valued at $29,250,000, which was payable by cash payments totaling $10,750,000 (previously paid) and the issuance of 18,500,000 common shares (previously issued). The closing of this transaction provided for the issuance to Teck of an additional 20,751,176 common shares in Abacus to satisfy the last of the share payments owing under the APA.
As a result of this transaction, Teck now owns 39,251,176 shares of the Corporation representing 19.9% of the issued and outstanding shares of Abacus.
Pursuant to the provisions of the previously announced Joint Venture Shareholders' Agreement dated October 12, 2010, these assets have been transferred to the joint venture company, KGHM Ajax Mining Inc. ("KGHM Ajax"), 49% of which is owned by Abacus and 51% of which is owned by Abacus' joint venture partner, KGHM Polska Miedź S.A. ("KGHM"). A remaining final cash payment to Teck of $5 million required under the APA is to be made on or before October 8, 2012. The payment will be assumed by KGHM Ajax, provided that KGHM exercises its option to increase its ownership position in KGHM Ajax to 80%, which Abacus expects to occur later this year. KGHM currently owns 15,000,000 shares of Abacus, representing 7.6% of the total shares issued and outstanding.
Jim Excell, President & CEO of Abacus, commented on the transaction, "Concluding the APA with Teck brings to a close a chapter that has long been outstanding. Abacus effectively has two major shareholders and industry leaders in Teck and KGHM, and a clean slate to build significant value and cashflow growth under a world class mining team with the Ajax project as its cornerstone."
Work continues to progress on the Feasibility Study of the Ajax Mine expected to be finalized in the fall of this year with environmental permitting now underway.
Abacus is an exploration and mine development company focused on the development of the Ajax copper-gold project located 10 km southwest of Kamloops, B.C. With major copper producer and joint venture partner, KGHM Polska Miedz S.A., Abacus, as operator, is currently completing the feasibility study on the Ajax project, which is expected to be completed in the fall of 2011. The study follows from the previously released Preliminary Economic Assessment (the "PEA") of June 22, 2009 by Wardrop Engineering Inc., which contemplates annual production of 110 million pounds of copper and 100,000 ounces of gold in concentrate at a processing rate of 60,000 tonnes per day. The PEA indicates a NPV of US$1,147 Mil (discounted at 8%) on a 23-year mine life based on 3-year average prices of US$2.99/lb Cu and US$773/oz Au; and a base case NPV of US$193 Mil using US$2.00/lb Cu and US$700/oz Au. Please refer to the Company's website for further information at www.amemining.com.
On Behalf of the Board,
ABACUS MINING AND EXPLORATION CORPORATION
James D. Excell
President & CEO
Director, Investor Relations
Tim Mikula, Investor Relations, [email protected] 866-834-0301
This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address events or developments that Abacus Mining & Exploration Corporation (the "Company") expects to occur, are forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Forward looking statements in this news release include, but are not limited to, Abacus' expectation that KGHM will exercise its option to increase its ownership of KGHM Ajax to 80% later this year, and that a Feasibility Study of the proposed Ajax Mine will be completed in the fall of 2011. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, and continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. Except as required by applicable securities laws, the Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.
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