OAKVILLE, ON — Sarissa Resources Inc. ("Sarissa" or "the Company") (PINKSHEETS: SRSR) wishes to update shareholders on the option and financing agreement (the "Option") entered into in 2011 as well as other potential financing options.
Under the terms of the original Option, when exercised between CDN$5,500,000 and CDN$10,000,000 was to have been raised to conduct pre-feasibility metallurgical studies and scoping studies, designed to qualify as a Preliminary Assessment under NI 43-101, including geological modeling and further resource estimates of the mineral potential of the Company's subsidiary, Nio-Star Corp's wholly-owned Nemegosenda niobium property.
To date the optionor ("HKHE") has contributed a portion of the anticipated funding, and the first part of the metallurgical studies were contracted for and started in September, 2011. These are substantially completed now, and we are waiting for the report and for recommendations for the next phase. The geological modeling and further resource estimates, including further diamond drilling, have not yet been completed.
The team we have assembled, including HKHE, continues to work toward completion substantially along the lines of the original Option, although the timing has had to be extended due to the challenging market conditions. While the Company continues to work with HKHE toward an anticipated closing, we have also considered it prudent to evaluate other financing options, both in China and Hong Kong, as well as North America and Europe. During the period in which HKHE had an exclusive option, the Company was approached by other companies with financing proposals, and is now evaluating these potential financing opportunities and partners to determine the best fit to quickly move the project to the next phase.
Sarissa CEO, Scott Keevil commented, "The timing of the Option was such that we and the optionors have been caught up in the general stock market and financing malaise, resulting in some of the anticipated funding groups involved in the original consortium having to drop out of their planned commitments. While this has been frustrating for all of us, the fact remains that we are continuing to advance our interest in this major asset. As well as beginning the advanced metallurgical engineering studies, we have now completed all option payments under the various acquisition agreements on the Nemegosenda property and now hold complete title to all of the ground, subject only to normal royalties, land taxes on our patented holdings, and provincial work commitments on our mining claims.
"This puts us in a very strong position in evaluating the various financing options, as we have no major time sensitive commitments to make that could be used as leverage against us in negotiations.
"This has been a pretty trying period for all of us. I know I have been frustrated by the timing over the past six months and I know what is going on behind the scenes, so I can only imagine how frustrating it has been for shareholders who are not able to see all of the efforts taking place in the background."
Sarissa management continues to believe that a financing arrangement along the lines contemplated, and the proposed Spin-Out plan represent the best route forward in the development of the Nemegosenda property and in realizing maximum value for Sarissa shareholders.
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