VANCOUVER, British Columbia, Feb. 21, 2014 (GLOBE NEWSWIRE) -- Huakan International Mining Inc. (TSX-V:HK) ("Huakan" or the "Company") announces that the Supreme Court of British Columbia (the "Court") has issued an order approving the acquisition by the Company of the Greenwood Gold Project from Grant Thornton Limited, in its capacity as Court appointed Receiver and Manager (the "Receiver"), for AMT Industries Canada Inc. ("AMT") for a purchase price of $3 million. The Company has made a $316,048 cash deposit and the balance of the purchase price will be paid by forgiving part of the indebtedness owed by AMT to the Company. Subsequent to the acquisition, AMT, along with Gold Crown LLC ("Gold Crown") and Mineral Invest International MII AB (collectively, the "Debtors") will still owe the Company approximately $2.5 million. The Company will take steps to try to collect the balance of the indebtedness from the Debtors. However, the realization is uncertain. The acquisition is expected to close by end of February 2014.
Greenwood Gold Project was previously owned by the Company and sold to AMT and Gold Crown in 2011 for a total consideration of $7.425 million and 2% Net Smelter Royalty ("NSR"). The NSR agreement was further amended in August 2012 in that AMT and Gold Crown agreed to buy out the NSR by paying a sum lump price of $4.5 million. AMT and Gold Crown defaulted in performing their obligations and failed to make the required payment for NSR buyout to the Company. The Company applied for and the Court appointed the Receiver over all of the assets and undertakings of AMT effective October 22, 2013. The Company subsequently was the successful purchaser in the formal sales process run by the Receiver.
The Greenwood Gold Project is composed of a fully permitted modern 200 tonne per day gravity-flotation mill and tailings facility for processing gold-copper mineralization from the Lexington underground mine which is also fully permitted and part of the assets. Resources still remain in the Lexington mine. In addition, the assets include a fleet of underground mining equipment used during production of the Lexington mine in 2008 and the Golden Crown high grade gold-copper deposit. The Company will assess a variety of paths from re-opening the Lexington mine to JV partnering and toll milling opportunities from nearby deposits.
Neither the TSX Venture Exchange nor its Regulations 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.
CAUTIONARY STATEMENTS REGARDING FORWARD LOOKING INFORMATION
Certain of the statements made and information contained herein may contain forward-looking statements or forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or forward-looking information include, but are not limited to, statements concerning the Greenwood Gold Project. Forward-looking statements or information include statements regarding the expectations and beliefs of management. Often, but not always, forward-looking statements and forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or the negatives thereof or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements or information include, but are not limited to, statements or information with respect to known or unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information.
Forward-looking statements or information are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks and uncertainties relating to: completion of announced transactions, history of losses; requirements for additional capital; dilution; loss of its material properties; interest rates increase; global economy; limited history of production; speculative nature of exploration activities; periodic interruptions to exploration, development and mining activities; environmental hazards and liability; industrial accidents; failure of processing and mining equipment; labour disputes; supply problems; commodity price fluctuations; uncertainty of production and cost estimates; the interpretation of drill results and the estimation of mineral resources and reserves; legal and regulatory proceedings and community actions; title matters; regulatory restrictions; permitting and licensing; volatility of the market price of common shares; insurance; competition; hedging activities; currency fluctuations; and loss of key employees. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements or information. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information. The Company disclaims any intent or obligation to update forward-looking statements or information except as required by law, and you are referred to the full discussion of the Company's business contained in the Company's reports filed with the securities regulatory authorities in Canada.
Fiona Leung, Chief Financial Officer at (604) 694-2344