SPOKANE, WASHINGTON -- (Marketwire) -- 01/15/13 -- Hunt Mining Corp. ("Hunt") (TSX VENTURE: HMX) is pleased to announce that it has entered into an amendment to its agreement with Fomento Minero De Santa Cruz Sociedad Del Estado ("Fomicruz") regarding the La Josefina project in Santa Cruz, Argentina. The La Josefina project, Hunt's flagship property, lies to the east of, and is contiguous to, Hunt's recently acquired La Valenciana project. The amended agreement provides Hunt with an additional eight years to explore the project and the option to buy back 40% if Fomicruz elects to back in. If the option is exercised this would result in Hunt owning 91% of the project.
The amended agreement for La Josefina has the following provisions:
-- Hunt, through Cerro Cazador S.A ("CCSA"), its 100% owned Argentine subsidiary, is required to make a total exploration investment of US$12,000,000 during the initial period of the amended agreement, which ends on June 30, 2015. To date, Hunt has invested approximately US$9,000,000 in exploration expenses on the La Josefina project.-- Hunt will have the option for a second exploration term of an additional four years ending on June 30, 2019. If Hunt elects to continue into the second term it will be required to make an additional exploration investment of US$6,000,000, which would bring the total exploration investment by Hunt in the La Josefina project to US$18,000,000.-- If, after meeting its investment commitments and completing a pre- feasibility study, Hunt determines that it is economical to go into production it must submit to Fomicruz a final feasibility study for evaluation. Once the final feasibility study has been submitted, Fomicruz will have 90 days to consider and approve it. If approved, CCSA will have approximately 45 days to exercise its option of exploitation.-- Upon exercising its option of exploitation Hunt will have 60 days to create a new corporation (the "JV corporation") to hold the La Josefina project. The JV corporation will initially be owned 19% by Fomicruz and 81% (directly or indirectly) by Hunt. Hunt must within 18 months of creating the JV corporation start construction of the mine and processing facilities and within 18 months after that (a total of 36 months from the forming of the JV corporation) start mining and processing ore.-- If the feasibility study demonstrates the economic viability of building a refinery Hunt will have an additional 12 months for construction of the refinery. This will require that the majority of the processes, including refining, be carried out in the province of Santa Cruz.-- Upon competition of final feasibility study Fomicruz will have a one- time-only option to elect to purchase 30% in the JV corporation from Hunt, bringing Fomicruz's total ownership to 49%. If Fomicruz elects to increase its ownership interest in the JV corporation, consideration to Hunt must be made according to the following schedule: -- to purchase an additional 10% interest in the JV corporation, Fomicruz must reimburse Hunt 10% of the exploration investment made by Hunt during the exploration period, bringing Fomicruz's total ownership interest in the JV corporation to 29%; -- to purchase an additional 10% interest in the JV corporation, Fomicruz must reimburse Hunt 20% of the exploration investment made by Hunt during the exploration period, bringing Fomicruz's total ownership interest in the JV corporation to 39%; -- to purchase the final 10% interest in the JV corporation, Fomicruz must reimburse Hunt 25% of the exploration investment made by Hunt during the exploration period, bringing Fomicruz's total ownership interest in the JV corporation to 49%.-- Hunt, through CCSA, has the right to buy back any of Fomicruz's increased ownership interest in the JV corporation at a purchase price of US$200,000 per each percentage point owned by Fomicruz down to their initial ownership interest of 19%.-- Hunt can purchase 10% of the Fomicruz's initial 19% JV corporation ownership interest by negotiating a purchase amount with Fomicruz.