ParaFin Corporation (PFNO)

[soupoftheday]

8-K ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On December 6, 2004, the Registrant entered into an agreement with Guarani Exploration and Development Corporation for the purpose of the Registrant potentially acquiring an 80% interest in a license to explore the 2,456,453 hectares (approximately 5,986,000 acres) in the Alto Parana Block, Alto Parana Province, Paraguay (See Exhibit 10.1). This license has been applied for by Guarani with the Government of Paraguay under that country's Hydrocarbon Law. Under the terms of this agreement, within 30 days following the approval of such a license the Registrant is to deposit the sum of $150,000 with Guarani. On or before 60 days thereafter, the Registrant is to deposit with Guarani an additional sum of $350,000. Prior to the date to be stipulated in a license for completing the initial drilling obligations, the Registrant is to finance the "Work Program", as defined in the agreement. The agreement estimates that the items to be performed under the Work Program will not exceed $3,500,000. The company is looking at several different financing sources for the capital that will be required to fund operations if Guarani receives license approval; the terms of this agreement are conditioned on such approval.

This agreement was announced in a press release on December 6, 2004 (see Exhibit 99 to this Form 8-K).

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