Erin reduces carrying value of Piskanja property
Erin Ventures Inc EV
Shares issued 23,105,095 Nov 16 close $0.35
Mon 19 Nov 2001 News Release
Mr. Blake Fallis reports
Erin Ventures has reduced the carrying value of the Piskanja Borate
property in Yugoslavia, and its associated capitalized amounts, to $1 for
accounting purposes. This action was required in order to avoid any delay
in filing the corporation's financial statements on a timely basis.
Erin's agreement with Electroprevreda (the national power corporation of
Yugoslavia) states that Erin earns a 50-per-cent interest in the Piskanja
Borate property in Yugoslavia by expending direct exploration expenditures
of $2.67-million on the property. Development of the property, which
started in 1997, was suspended in 1998 because of civil unrest, war and
sanctions imposed against Yugoslavia. Erin, as a result of these events,
triggered the force majeure clause in the agreement, delaying all deadlines
under the agreement. The majority of economic sanctions imposed against
Yugoslavia were lifted earlier this year (2001) following the election of a
pro-western, reform-minded government.
As part of broad economic and social reforms in Yugoslavia, and a requisite
for international financial aid packages, the current government is
undertaking to amend several laws and regulations, in an attempt to bring
their laws, practices and standards in line with those of the European
economic community. These reforms include changes to the privatization,
taxation, banking, foreign ownership, mining and environmental laws of the
country. Many of these reforms have already been enacted into law, with
favourable results. While Erin anticipates that remaining reforms shall
continue to garner the praise and support of western nations, shareholders
must be cautioned that it is possible that continuing reforms may have a
direct impact on Erin's ability to operate favourably in Yugoslavia.
As part of this reform process, the Ministry of Mining has recently advised
Erin of its intention to take over Electroprevreda's interest in the
Piskanja Borate property. Further, it has recommended to Erin that Erin
should submit a proposal to the Ministry of Mining for the continuation of
the development of the Piskanja property, that does not include the
participation of Electroprevreda, but rather, leaves the government with a
non-participating and non-controlling interest in the project.
Erin wishes to advise shareholders that while it anticipates a positive
outcome to its dealings with the Ministry of Mining in Serbia, there
remains a risk that the government of Yugoslavia may decide to not
recognize Erin's interest in the Piskanja property, may take the position
that Erin's contract is at an end, or may otherwise change the applicable
government regulations, so that Erin Ventures may entirely lose its
interest in the property.
Erin has prepared a proposal for submission following the recommendations
of the Ministry of Mining. This amended development proposal includes the
participation of a leading global chemical company, as stated in prior news
releases by Erin. Erin looks forward to a formal meeting with the
Yugoslavian government to ratify the revised program for developing the
Piskanja Borate property, and anticipates that this meeting will be held
shortly. |
