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Constitution
Mining Signs Option To Acquire Large Land Position In The Gold Sands District
Of Northeastern Peru
Tempe, Arizona - October 1, 2008 - Constitution Mining Corp. (CMIN.OB)
announces that the company has entered into a Mineral Rights Option Agreement
to acquire 382 km2 of strategically positioned mining properties in the
developing Gold Sands district of northeastern Peru.
Constitution Mining CEO, Dr. Willem Fuchter commented, "We
believe that the Gold Sands district in northeastern Peru offers the
potential for large-scale, low-cost production of gold. Potential, if the
indicated gold mineralization in the Gold Sands continues to expand, that may
be realized by employing modern dredging and processing methods that do not
use cyanide, mercury, or any other disruptive chemical processes."
Dr. Fuchter continued, "Until fairly recently, open-pit mining has
dominated the mining industry as the preferred low-cost means of extracting
gold. And over the past 25 years many of the world's leachable deposits have
been tapped, leaving the industry in search of newer and more environmentally
sound methods of extracting gold. The Gold Sands potential is on a scale that
is comparable to the prolific tar sands of Alberta. The key question now, and
what we intend to discover, is whether or not a new paradigm in gold
production is about to unfold."
Terms of the Gold Sands deal...
On September 30, 2008, the Effective Date, the company entered into a Mineral
Rights Option Agreement with Temasek Investments Inc. Pursuant to this
Agreement, we acquired four separate options from Temasek, each providing for
the acquisition of a twenty-five percent (25%) interest in 41 mineral properties
in the Gold Sands district as described in Annex 1 of the Agreement, thus
potentially resulting in our acquisition of 100% of the Mineral Rights. The
Mineral Rights are owned by Compania Minera Maranon S.A.C. ("Minera
Maranon"). Bacon Hill Invest Inc. ("Bacon Hill"), a
corporation incorporated under the laws of Panama and a wholly-owned
subsidiary of Temasek, owns 999 shares of the 1,000 shares of Minera Maranon
that are issued and outstanding. Temasek owns the single remaining share of
Minera Maranon. The acquisition of each 25% interest in the Mineral Rights
will occur through the transfer to us of 25% of the outstanding shares of
Bacon Hill.
Constitution Mining may exercise the initial option to acquire a 25% interest
in the Mineral Rights by paying US$375,000 to Temasek and issuing 2,000,000
shares of common stock to Temasek within five (5) business days from the
Effective Date of this agreement. The company must also pay an additional
US$375,000 to Temasek within ninety (90) days of the Effective Date.
The company may exercise the second twenty-five percent (25%) option
resulting in its acquisition of a 50% interest in the Mineral Rights within 6
months of the Effective Date by paying an additional US$1,250,000 to Temasek
and issuing 2,000,000 additional shares of common stock to Temasek.
The company may exercise the third twenty-five percent (25%) option resulting
in the acquisition of a 75% interest in the Mineral Rights within 12 months
of the Effective Date buy paying an additional US$3,000,000 to Temasek, and
issuing 2,000,000 additional shares of common stock to Temasek.
The company may exercise the fourth twenty-five percent (25%) option
resulting in the acquisition of a 100% interest in the Mineral Rights within
18 months of the Effective Date by paying an additional US$5,000,000 to
Temasek and issuing 4,000,000 additional shares of common stock to Temasek.
Upon the company's acquisition of a 100% interest in the Mineral Rights,
Temasek will hold its single share of Minera Maranon in trust for the
company's sole benefit and hold the share strictly in accordance with the
company's instructions. Also upon the company's acquisition of a 100%
interest in the Mineral Rights, Temasek is entitled to an annual 2.5% net
returns royalty. However, if the company pays Temasek US$2,000,000 within
ninety (90) days of our acquisition of a 100% interest in the Mineral Rights,
Temasek will only be entitled to an annual 1.5% net returns royalty.
If the company exercises the second twenty-five percent (25%) option,
resulting in the acquisition of a 50% interest in the Mineral Rights, and
fails to acquire a 100% interest in the Mineral Rights, the company and
Temasek will form a joint venture in which both parties will be wholly
responsible for developing a feasible mining project and all necessary
facilities and Temasek shall retain a carried free interest in the mining
rights. If the company does not develop a feasible mining project within
three years of the Effective Date, the company will be responsible to pay
Temasek an advance minimum mining royalty of $500,000 per year, which will be
deducted from Temasek's net return royalty.
For the full terms of the deal, interested investors are encouraged to review
the company's recent 8-K filing.
About Constitution Mining Corp.
Our Mission is to consistently increase the amount of honest money - gold and
silver - underlying the number of shares we have outstanding. We intend to
acquire, explore for, and hold onto deposits of gold and silver. Additional
information about Constitution Mining Corporation may be obtained at
www.ConstitutionMining.com.
For more information contact Investor Relations at (480) 237-9985.
On behalf of the Board:
Dr. Willem Fuchter, CEO
Constitution Mining Corp.
Disclaimer
This release contains forward-looking statements that are based on the
beliefs of Constitution Mining Corp. management and reflect Constitution
Mining Corp. current expectations as contemplated under section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities and
Exchange Act of 1934, as amended. When used in this release, the words
"estimate, "project," "believe,"
"anticipate," "intend," "expect,"
"plan," "predict," "may," "should,"
"will," "can," the negative of these words, or such other
variations thereon, or comparable terminology, are all intended to identify
forward-looking statements. Such statements reflect the current views of
Constitution Mining Corp. with respect to future events based on currently
available information and are subject to numerous assumptions, risks and
uncertainties, including, but not limited to, risks and uncertainties
pertaining to development of mining properties, changes in economic
conditions and other risks, uncertainties and factors, which may cause the actual
results, performance, or achievement expressed or implied by such forward
looking statements to differ materially from the forward looking statements.
The information contained in this press release is historical in nature, has
not been updated, and is current only to the date indicated in this press
release. This information may no longer be accurate and therefore you should
not rely on the information contained in this press release. To the extent
permitted by law, Constitution Mining Corp. and its employees, agents and
consultants exclude all liability for any loss or damage arising from the use
of, or reliance on, any such information, whether or not caused by any
negligent act or omission.
For more information contact Investor
Relations at (480) 237-9985.
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