Ecuador option terminated
Jersey Goldfields Corp JRG
Shares issued 18,295,644 Jan 21 close $0.34
Wed 22 Jan 97 News Release
Dr Peter Guest reports
The board of directors of the company has decided to provide formal notice
to Compania Minera Ecuatoriana SA (Cominecsa) of the company's decision to
abandon, and return to Cominecsa all remaining mineral concession interests
forming part of the existing property interests contained within the option
agreement (collectively, the disposed interests). This disposition is being
done in accordance with the provisions of the amended mineral option
agreement, dated February 2 1995, which was subsequently clarified at the
September 30 1996 management committee meeting (collectively, the option
agreement), as entered into between the company and Cominecsa.
Under the option agreement, Cominecsa originally granted the company the
option to acquire 100% of Cominecsa's interest in 54 property concessions
within mainland Ecuador. The option agreement is subject to adjustments
made by the company and Cominecsa under a second amending agreement dated
April 3 1996. The option agreement received VSE approval on February 6
1995. In accordance with the terms of the option agreement and the
September 30 1996 management committee meeting, the company is now required
to ensure that such disposed interests are maintained, as to all required
government payments and environmental conditions, in an acceptable state
during a 30-day period following delivery of the notice to Cominecsa. This
provides for Cominecsa to be in a position to deal with the disposed
interests during the notice period as they see fit. After the 30 day
period, the company will be under no further duty or obligation to maintain
any interests comprising the disposed interests.
The company's carefully deliberated decision to abandon and dispose of the
disposed interests and, thereby, effectively terminate the option
agreement, has been made, in part, as a result of the company's final
determination that the significance of results received to date on certain
of the property interests, together with the resources required to maintain
the same, no longer justified the expenditure of exploration monies under
the terms of what has been determined to be an exhaustive and unworkable
option agreement. Having been unsuccessful in attempts to rework the option
agreement in such a way as to maximize future shareholder value, the board
has determined that it had no alternative but to terminate the same.
The company will continue to investigate other resource opportunities of
merit throughout South and Central America, which the directors feel will
provide a more realistic opportunity for long term success. The company's
subsidiary office in Ecuador (Jerseymines Minera del Ecuador SA) will be
maintained to assist with the search for suitable acquisitions in an
expedient and cost-effective manner. The directors and exploration team are
currently reviewing opportunities which have emerged as a result of using
established contacts and infrastructures.
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