New World Resource Corp. has entered into an agreement with Empresa Minera Marte S.R.L a subsidiary of Empresa Minera Unificada S.A. (EMUSA), which gives New World a more beneficial means of acquiring its 75% interest in the Lipena copper-gold concession in southwest Bolivia. New deal terms include an accelerated option period; a substantial reduction in cash payments; and the ability for New World to increase its interest in the concession to 85%. The Company has until March 1, 2010 to elect to proceed under the new deal terms. If New World decides to proceed under the new deal terms, MARTE's principal shareholder, Luis Miguel Mercado Rocabado, will join the Company's board of directors.
John Lando, President of the Company, commented: The new deal would benefit New World in a number of ways. The Company could acquire its 75% interest in the Lipena concession without having to make further significant cash payments, thereby preserving most of the Company's treasury for its exploration programs. At the same time, New World's board would be strengthened by the addition of Mr. Mercado, whose experience and stature within the Bolivian mining industry would be invaluable to the Company as it progresses both Lipena and the Pastos Grandes lithium brine project.
We continue to believe strongly in the Lipena project, and the surrounding Bonete concession. The inferred resource estimate produced on the Lipena concession is significant and we feel confident that further exploration work will expand the deposit.
The new deal provides for future exploration expenditures of not less than US$1,080,000 to be incurred by the Company on Lipena and the surrounding Bonete concession. If and when the Company elects to proceed under the new deal terms, it will commence a comprehensive exploration program with a budget of not less than US$1,080,000.
About the Option Agreement
Under the existing option agreement dated January 26, 2006, as amended December 3, 2008, the Company's outstanding obligations are, by March 2011, to pay to MARTE US$850,000 in cash, issue to MARTE 3.0 million shares of New World, and incur expenditures of US$900,000 on the concession. If the Company elects to proceed under the new deal terms, then in order to acquire a 75% interest in the Lipena concession, the Company will be required to:
- pay to MARTE at the time it makes the election US$100,000 in cash
- issue to MARTE at the time it makes the election 2,000,000 units (the
Units) of the Company at a deemed price of C$0.27 per Unit;
- issue to MARTE 3.0 million shares of the Company at the time it makes
- incur future exploration expenditures of US$1,080,000 on the
concessions, to be completed within one year
- Each Unit will consist of one common share of the Company and one half
of one common share purchase warrant. Each full warrant is exercisable
at a price of C$0.40 for a period of 12 months. The Units will be
subject to a four month hold period.
In addition, if the Company elects to proceed under the new deal terms:
- Luis Mercado will join the board of directors; and
- MARTE will grant to the Company an option to acquire an additional 10%
interest in the Lipena concession, exercisable for a period of three
years by making an additional cash payment to MARTE of US$2.0 million
and issuing to MARTE an additional 1.0 million shares of New World.