Canmex Announces Formal Signing of Production Sharing Agreement in Puntland, Somalia 09:00 EST Tuesday, January 23, 2007
VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 23, 2007) - Canmex Minerals Corporation ("Canmex" or "the Company") (TSX VENTURE:CXM) is pleased to announce the formal signing of the Puntland Production Sharing Agreement ("PSA") between the Government of Puntland, Range Resources Limited ("Range") and Canmex.
The agreements cover highly prospective basins in the Nogal and Dharoor Valleys in the state of Puntland in northern Somalia. The Nogal and Dharoor basins are considered world-class exploration plays with a petroleum system geologically similar to and formerly contiguous with those within the Republic of Yemen.
Pursuant to a Memorandum of Understanding signed between Canmex and Range, Canmex has the right to acquire an 80% interest in the licenses and operatorship of the Nogal and Dharoor projects in consideration for the financial commitment over a six year period of US$50 million in exploration expenditures and the payment to Range of an additional US$3.5 million upon commencement of commercial production.
A comprehensive exploration work program is proposed in respect of each exploration area, which will include:
a) Geological fieldwork;
b) Acquisition of surface high resolution geochemical surveys;
c) Reprocessing of prior 2D seismic (up to an aggregate of 1,000 line km);
d) Review and integration of all geophysical and geological data; and
e) Drilling of four exploratory wells (over the first (minimum two) and second exploration periods for both areas).
The PSA signing was attended by His Excellency, Puntland President Hersi, Director General of the Puntland Energy and Mineral Resource Agency, Hassan Mohamoud, Range executives and Canmex President and CEO Richard Schmitt.
His Excellency President Hersi commented, "Range and Puntland have been working together in the past few years and I am very happy with that, Canmex has worked with Range and I am very happy with the deal. I honestly believe our country is rich in natural resources and it requires people to do the work. The big oil companies were previously all exploring in my country 20 years ago when I was the Governor of the area and believe an oil discovery was near. I have heard good things about Canmex and the people involved and I look forward to the commencement of work as soon as possible. Puntland has always been secure and it looks like the other parts of the country are now settling down. I am sure that you (Range and Canmex) will succeed."
Rick Schmitt, President of Canmex, commented, "We very much look forward to working in the State of Puntland for years to come and greatly appreciate the warm, professional hospitality extended to us. The signing of the PSA represents the passing of a major milestone towards beginning our work program on these truly world-class exploration assets and we look forward to great success."
Range Resources Managing Director Mike Povey commented, "Since Range's first involvement, the company has been aware that in order to explore successfully for hydrocarbons in Puntland, it required a joint venture partner with a strong technical team, solid financial backing and preferably experience in the region. In Canmex and the personnel involved with the company I believe we have found an ideal partner to aggressively progress the exploration effort. The signing of the Production Sharing Agreement marks the beginning of a partnership between the Puntland Government, Range and Canmex. I am pleased that the joint venture negotiations have progressed rapidly and resulted in an agreement that all parties are happy with and that the exploration commitment made by Canmex hopefully will result in the discovery of large commercial quantities of oil that can be developed for the benefit of the Somali people. I and the rest of the Board look forward to working with Canmex and extending our relationship with them and the Puntland Government in what should be a very exciting time over the next few years."
The foregoing transactions are subject to a number of conditions including negotiation and finalization of definitive binding agreements between Canmex and Range, including a Joint Operating Agreement and binding agreements among Canmex and Range and the Ministry of Energy of Puntland and all requisite regulatory approvals.
In respect of the conflict in southern Somalia, the Company is closely monitoring events but at this stage, can advise that the hostilities have not affected to date the Company's activities in the state of Puntland located in northern Somalia.
Forward-looking statements: This press release contains statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as political risk, general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events and management's capacity to execute and implement its future plans. Actual results may differ materially from those projected by management.
ON BEHALF OF THE BOARD
Rick Schmitt, Director
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