We are pleased to enter into this LOI with Snowcap and Segwun
VANCOUVER (PRWEB) September 10, 2012
VANCOUVER, Sept 10 2012 (Financial Press) – Several resource projects in West Africa are about to get a major boost of capital investment after Rio Grande Mining Corp. announced that it has entered into a binding Letter of Intent with Snowcap Energy Inc. and Segwun Energy Inc. in certain resource projects that Snowcap and Segwun are in the process of acquiring in West Africa.
Both Snowcap and Segwun, working together as JV Partners, have potential acquisition projects in Equatorial Guinea, including the possible acquisition of a working interest in certain offshore oil and gas blocks for exploration, and are also investigating other acquisition targets in West Africa.
Rio Grande Mining Corp. agreed to advance Snowcap the sum of $200,000 as a secured refundable loan on or before September 30, 2012.
“We are pleased to enter into this LOI with Snowcap and Segwun,” said John Bevilacqua, President and Chief Executive Officer of Rio Grande Mining Corp.
The move was prompted by his company’s strategy to diversify into different resource opportunities, with minimal initial capital outlay, he said.
“Our company has agreed to advance certain funds to Snowcap in exchange for an option to acquire a 100 per cent interest, directly or indirectly,” said Bevilacqua.
Acquiring total interest in Snowcap by Rio Grande Mining Corp would allow the company to issue up to 20 million common shares in aggregate to the JV Partners upon acceptance of the definitive agreement by the TSX Venture Exchange.
The deal requires the JV Partners are successful in negotiating the acquisition of the target assets in Equatorial Guinea, they intend to incorporate an operating subsidiary owned as to a 50 per cent interest by each of the JV Partners.
There is no assurance that the JV Partners will ultimately be successful in acquiring the target assets. The JV Partners have, however, agreed to provide the Company with all required documentation to seek TSX Venture Exchange acceptance to the transaction, including a National Instrument 51-101 technical report on the target assets.
So what makes the exploration projects in West Africa attractive?
The JV Partners are confident that their special relationships in the region can get projects with big potential which would normally only go to the majors.
“Through the considerable work done over the past few years, our teams at Snowcap and Segwun have established strong networks in West Africa, and we are confident of being in a position to acquire certain targeted assets shortly,” said David Robinson, the CEO of Snowcap Energy.
“We look forward to working with Rio Grande Mining Corp. to successfully acquire and develop key upstream oil and assets in West Africa, both onshore and offshore.”
The JV Partners are also confident they can move quickly with the acquisitions, which helps to get these blocks ahead of the majors, with the plan to eventually farm-out a piece to the majors, but on a promoted basis.
“We expect to be awarded the first block, in Equitorial Guinea, any day now,” said Robinson.
And what are the long-term challenges associated with the projects?
“The main concern is having access to the capital to explore and develop the blocks and this can be potentially covered by bringing in major partners, said Robinson. “Infrastructure is not an issue.”
The management teams of Snowcap and Segwun are very experienced and have an excellent track record in Africa. The team behind Snowcap have previously been involved in projects in Tunisia, Egypt, and the Sudan.
Individually, the team members have even more relevant experience.
Robinson has been active in the international upstream oil and gas sector for over 23 years, including extensive experience in Tunisia, Sudan, Egypt, Oman, Turkmenistan, Kazakhstan, and Colombia.
Snowcap’s exploration manager Tony Lucas has over 34 years of continuous oil and gas experience with a focus on West Africa. He has worked with companies such as Shell Algeria, Tullow, Amoco, and Maersk, which has included working on a number of African projects in Nigeria, Ghana, Cote d’Ivoire, Cameroon and Angola.
Key people at Segwun include the company’s founder and Chairman, William Deluce, who has over 45 years’ of experience in the resource and consulting industry, 20 years of which have been focused on Africa. Deluce is also CEO of GMC Mining, which operates in the Democratic Republic of Congo.
Segwun’s chief geologist is Arnold Milton, who has over 47 years’ of experience in the oil and gas industry, specializing in international exploration and development. Milton has held a range of positions for companies including Texaco, Caltex, Tenneco, British Gas, and Unocal. He also experience includes projects in the US, Libya, China, Azerbaijan, Turkey, Oman, Eritrea, Egypt, Iraq, Iran and Malaysia.
About Rio Grande Minining Corp.
Rio Grande Mining Corp. is a publicly traded company based in Vancouver. In addition to the option with the JV Partners, the company currently has an option acquire a 100% interest in three mineral claims consisting of 880.5 hectares, located in the New Westminster Mining Division, British Columbia, and known as the Golden Shrew claims. http://www.riograndemining.com
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