TORONTO, ONTARIO--(Marketwired - Oct. 10, 2014) - The Board of Directors of Cancana Resources Corp. (TSX VENTURE:CNY) ("Cancana") provides the following update on its 30% minority equity interest in Brazil Manganese Corporation ("BMC") (currently known as Rio Madeira Comércio Importação e Exportação de Minérios Ltda. and to be renamed Brazil Manganese Corporation), the joint venture established between Cancana and Ferrometals BV, Cancana's largest shareholder.
Cancana has been advised by BMC that due to certain BMC tenements being in close proximity to indigenous title land, BMC could be affected by a civil public action between two Brazilian government departments.
BMC currently owns several tenements, which border the Povo Cinta Larga indigenous land. Due to illegal diamond mining activities by third parties within the Povo Cinta Larga indigenous land and surrounding areas, the Brazilian Federal Prosecutor's Office (the "FPO") has filed a civil public action against the Brazilian Mining Authority - National Department of Mineral Production (the "DNPM"). The FPO is requesting the DNPM to withdraw all existent research applications and mining authorizations within the indigenous land of Povo Cinta Larga and surrounding area (10km) adjacent to the indigenous land (buffer zone). The DNPM has filed appeals to block the FPO civil public action and the final ruling is pending.
The eventual imposition of a buffer zone would have a material impact on BMC's tenements as some of BMC's tenements straddle or are wholly within the proposed 10km buffer zone.
The area impacted by the proposed 10km buffer zone would be approximately 38 km2 (rounded to the nearest km), which is approximately 35% of the total BMC project area.
BMC has retained TozziniFreire Advogados, a preeminent Brazilian law firm, to represent the joint venture. On behalf of BMC, TozziniFreire has filed a motion to join the proceedings at the appellate level, claiming a stakeholders and all tenements mandatory joinder to the lawsuit, which, if granted, could render null all previous procedural acts, including the relevant Appellate Court ruling.
In parallel, TozziniFreire has also prepared a depth of legal arguments to request a revision of the FPO injunction concerning research applications and mining authorizations in order to prevent the withdrawal of stakeholders licenses until the issue is finally resolved.
Cancana is supportive of BMC's actions, as it believes that legal action in this instance is in the best interests of its shareholders. Cancana will continue to vigorously defend the interests of its shareholders, and will continue to inform its shareholders on the ongoing BMC legal proceedings.
Cancana's MLB Tenements
The proposed 10km buffer zone would have an impact on certain of Cancana's MLB tenements. The MLB area impacted by the proposed 10km buffer zone would be approximately 17 km2 (rounded to the nearest km), which is approximately 4% of Cancana's MLB project area. Cancana will continue to monitor the BMC legal proceedings and assess whether a separate motion should be filed.
About Cancana Resources Corp.
Cancana is an exploration stage company that has transitioned into production through a joint venture with Ferrrometals BV. The joint venture (BMC) is focused on developing manganese production in Rondonia, Brazil. BMC has acquired an established manganese producer Rio Madeira and Eletroligas whose claims are adjacent to and mainly contiguous with Cancana's MLB manganese operation. All available resource reports and information on Cancana's properties are located on the Company website www.cancanacorp.com.
Issued on behalf of the Board of Directors of Cancana Resources Corp.
Senator J. Trevor Eyton, Chairman of the Board
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