| ||October 19, 2010|
Avanti Mining Announces Off Take Agreement Commitment and a Partnership Letter of Intent
| ||Vancouver, British Columbia: Avanti Mining Inc. ("Avanti") is pleased to announce that it has entered into an off-take commitment letter with a Asian Steel producer ("Strategic Partner") for the sale of three million pounds per annum of molybdenum oxide produced from the Kitsault mine for a four year period with a price protection mechanism to be agreed to by the parties. This represents approximately 10% of the expected average annual production from the Kitsault mine during the term of the agreement. The Strategic Partner has the option to increase the off take quantity from 10% up to 20% of the total annual production from the Kitsault mine. |
The same Strategic Partner has also entered into a non-binding letter of intent ("LOI") to enter into a partnership agreement pursuant to which it will acquire a ten (10) percent ownership interest in the Kitsault project. It will be a term of the partnership agreement that the Strategic Partner will assist in procuring up to fifty (50) percent of the total debt financing needs of the project. The amount of investment needed to earn the ten(10) percent partnership interest will be negotiated between the parties based upon the valuation reflected in the final feasibility study scheduled to be completed by AMEC by November 15, 2010 and due diligence to be conducted by the Strategic Partner. The Strategic Partner will fund its share of all future development expenditures of the Kitsault project after closing. The proposed off-take agreement and potential investment in the project are subject to any required regulatory approvals, third party consents, customary due diligence and negotiation of definitive legal documentation. The date for the completion of definitive agreements for these transactions is expected to be January 31, 2011; however, there is no certainty that the parties will be able to successfully negotiate definitive agreements or complete these transactions.
A J Ali, Chief Financial Officer, commented, "This is a significant first step in Avanti's strategy to sell up to 30% interest in Kitsault to fund the development of the project. Discussions are under way with several other parties for the remaining 20% Kitsault partnership interest. The assistance in arranging 50% of debt is very important because it facilitates arranging the balance of project financing needs of Kitsault. The Strategic Partner is a significant player in the global molybdenum market. This marks the beginning of what we hope will be a mutually beneficial long-term relationship."
Avanti is focused on the development of the past producing Kitsault molybdenum mine located north of Prince Rupert in British Columbia.
For further information, please visit www.avantimining.com, or call 303-565-5491 to contact:
Craig J. Nelsen, Chief Executive Officer
A.J. Ali, Chief Financial Officer
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements: This news release contains certain forward-looking information concerning the business of Avanti Mining Inc. (the "Corporation"). All statements, other than statements of historical fact, included herein including, without limitation; the details of the proposed off-take agreement, Strategic Partner acquiring an equity interest in Avanti Kitsault, expected annual production, the completion of the final feasibility study, the completion of definitive agreements and development of the Kitsault molybdenum mine are forward-looking statements. These forward-looking statements are based on the opinions of management at the date the statements are made and are based on assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events to differ materially from those projected in forward-looking statements. Important factors that could cause actual results to differ materially from the Corporation's expectations include fluctuations in commodity prices and currency exchange rates; uncertainties relating to interpretation of drill results and the geology, continuity and grade of mineral deposits; uncertainty of estimates of capital and operating costs, recovery rates, production estimates and estimated economic return; the need for cooperation of government agencies and native groups in the exploration and development of properties and the issuance of required permits; the need to obtain additional financing to develop properties and uncertainty as to the availability and terms of future financing; the possibility of delay in exploration or development programs or in construction projects and uncertainty of meeting anticipated program milestones; uncertainty as to timely availability of permits and other governmental approvals; and other risks and uncertainties disclosed in the Corporation's Annual Information Form for the year ended December 31, 2009, which is available at www.sedar.com. The Corporation is under no obligation to update forward-looking statements if circumstances or management's opinions should change, except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.
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