Vancouver, BC, November 27, 2012 - Vatic Ventures Corp (the "Company" or "Vatic") (TSX-V: VCV and Frankfurt: V8V) is pleased to announce that, by making the first option payments due, it has closed on an agreement (the "Option Agreement") with Minera Meridian Minerales S.R.L. de C.V. ("Minera Meridian"). Pursuant to the terms of the Option Agreement Vatic may earn an undivided 100% interest in and to certain mineral claims located in Sinaloa, Mexico. The property, known as the La Silla claims, is located 65 km north of Mazatlan in the State of Sinaloa and encompasses about 14,426 hectares.
"With this transaction, Vatic Ventures has the opportunity to become a major claim holder in Mexico with significant gold and silver exploration potential at these Trans Mexican Volcanic Belt gold trend claims," stated Nasim Tyab, President of Vatic Ventures. "Based on the historical information we have acquired on these properties, we believe that this acquisition adds considerable value to the Company and represents significant potential. Together with our previous acquisition of the La Silla West property, which surrounds the La Silla claims entirely, we have a significant land area of approximately 43,000 ha to explore."
The La Silla claims are part of the Trans Mexican Volcanic Belt and include many structures that have been historically mined on a small scale. In 2000 Minera Meridian identified 31 structures on the property. Between 2002 and 2004, 99 reverse circulation holes were drilled in 14 of the 31 structures.
The Option Agreement
Under the terms of the Option Agreement, Vatic has issued 3,000,000 common shares, and paid CDN$100,000 to Minera Meridian. Minera Meridian is a Mexican Subsidiary of Yamana Gold Inc. ("Yamana"). Minera Meridian has directed Vatic to pay these amounts directly to Yamana.
To maintain the option in good standing, Vatic is required to issue an additional 1,500,000 common shares on the first anniversary of the closing and a further 1,000,000 common shares on each of the second and third anniversaries. In addition, cash payments of $100,000 are required on each of the first, second and third anniversaries of closing. Vatic is required to top up all consideration payments in order to offset Mexican value added tax, which is currently 16%, by either increasing the cash or shares due to Minera Meridian. Vatic also has minimum work commitments of $500,000 in the first year, $1,500,000 in the second year, $2,500,000 in the third year and $3,500,000 in the fourth year. After fulfillment of all of the above terms, Vatic will have earned a 70% interest in the property.
In order to acquire the remaining 30% interest, Vatic must make a final payment of 3,000,000 common shares and $750,000 to Minera Meridian. Should Vatic elect not to exercise this additional option, Minera Meridian has a back-in right to increase its ownership to 70% by paying Vatic three times its exploration expenditures.
In connection with the foregoing, Minera Meridian: (i) has the right to participate in any of Vatic's future financings to maintain a maximum 15% ownership in Vatic; (ii) retains a 2% NSR on commercial production; and (iii) may, at its sole option, nominate one director to Vatic's Board of Directors.
Following the above share issuance as of the closing date, Yamana owns and controls an aggregate of 3,480,000 common shares of Vatic representing approximately 17.83% of the issued and outstanding common shares as at the date hereof. The common shares were acquired in reliance on the asset acquisition exemption contained in National Instrument 45-106 - Prospectus and Registration Exemptions.
The acquisition of the common shares by Yamana was effected for investment purposes. Yamana may from time to time acquire additional securities of Vatic, dispose of some or all of the existing or additional securities it holds or will hold, or may continue to hold its current position. This press release is issued pursuant to National Instrument 62-103 - The Early Warning and Related Take-Over Bid and Insider Reporting Issues. Yamana has advised the Company that a report containing additional information with respect to the foregoing matters will be filed with the Securities Commission in each jurisdiction where the Company is a reporting issuer and can be obtained through the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
ABOUT VATIC VENTURES CORP.
Vatic Ventures Corp (www.vaticventures.com) is a junior exploration company exploring for high yield precious metal projects throughout North America. Focusing on high yield gold and silver projects, Vatic Ventures has acquired the rights to earn an undivided 100% interest in two gold and silver exploration properties located 65 kilometers north of Mazatlan, Mexico. The two properties, known as the La Silla and La Silla West claims, encompass a total of 43,000 hectares and are part of the Trans Mexican Volcanic Belt gold trend.
ON BEHALF OF THE BOARD OF DIRECTORS
Neither the 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.
Forward Looking Statements
Some of the statements contained in this release are forward-looking statements. Forward-looking statements include but are not limited to, that the property which we acquired has significant gold and silver potential and that we have the ability to earn an interest in the property by completing our obligations over a number of years. Although the Company believes that its expectations reflected in the forward-looking statements are reasonable, such statements involve risk and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Various factors could cause actual results to differ from these forward-looking statements including the potential that the Company's projects will experience technical and mechanical problems, our inability to fund ongoing payments or work programs, out inability to obtain permits, geological conditions and other risks not anticipated by the Company or disclosed in the Company's published material, and we may not be able to complete the agreement because of conditions failing to be fulfilled. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. The Company assumes no responsibility to update this forward looking information except as required by law. The information contained herein does not constitute an offer of securities.