Karmin Announces Agreements to Acquire Mining Concessions in the Huamachuco Gold District of Peru

    




 /NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR  DISSEMINATION IN THE UNITED STATES/ 

 TORONTO, Nov. 22, 2011 /CNW/ - Karmin Exploration Inc. ("Karmin")  announced today that it has entered into a purchase  agreement (the "Purchase Agreement") with Alberto Aurelio Arias Dávila (the "Vendor"), a well-known Peruvian mining entrepreneur and an arm's length party,  to purchase 100% of the right, title and beneficial interest held by  the Vendor in two mining concessions (the "Purchased Mining Concessions") forming a portion of the Cushuro Property located in the department  of La Libertad in the Republic of Peru (the "Acquisition"). 

 In addition to the Acquisition, Karmin has entered into an option  agreement (the "Option Agreement") with the Vendor, which grants to Karmin an irrevocable and exclusive  option (the "Option") to purchase from the Vendor 100% (and not less than 100%) of the  right, title and beneficial interest in an additional mining concession  (the "Option Mining Concession", and together with the Purchased Mining Concessions, the "Cushuro Mining Concessions"), also forming a portion of the Cushuro Property (the "Option Acquisition", and together with the Acquisition, the "Cushuro Acquisition").  The Option Agreement provides Karmin with the right to exercise its  option to purchase the Option Mining Concession, at its sole  discretion, at any time on or after January 16, 2012 and for a period  of one year following such date (the "Option Term"). 

 Pursuant to the Option Agreement, Karmin and the Vendor have agreed to  enter into a separate agreement to lease the Option Mining Concession  (the "Lease"), providing Karmin with access to the Option Mining Concession during  the Option Term.  The Lease will be entered into following the receipt  of final approval from the TSX Venture Exchange (the "Exchange") in respect of the Cushuro Acquisition, and will have a term ending on  the earlier of the date in which the Option Acquisition closes and the  expiry of the Option Term. 

 The Cushuro Mining Concessions are located in the Huamachuco Gold-Mining  District in the sierras of northwestern Peru.  The concessions include  a gold-mineralized zone (the "Zona Cushuro"), discussed below, that is similar to other operating mines in the  district, including Lagunas Norte, La Virgen, La Arena, El Toro and  Santa Rosa.  The concessions cover a 25 square kilometre area, span an  elevation range of 3,900 to 4,200 meters, and can be reached in four to  five hours via well-maintained roads from Trujillo (a departmental  capital on the Pacific coast). The area is crossed by a power  transmission line. 

 The Cushuro Acquisition will constitute a Reviewable Acquisition under  the policies of the Exchange and, accordingly, must be approved by the  Exchange.  Additionally, the policies of the Exchange require that the  shareholders of Karmin approve the issuance of the Cushuro Shares (as  defined below) to the Vendor, because such issuance will result in the  Vendor becoming a Control Person (as defined in the policies of the  Exchange). 

 Consideration 

 In consideration for the Cushuro Mining Concessions, the attached rights  and the Lease, Karmin has agreed to issue up to an aggregate of  15,000,000 common shares in the capital of Karmin to the Vendor as  follows: 





    (i)    14,850,000 common shares of Karmin on closing of the Acquisition
           (the "Shares");

    (ii)   15,000 common shares of Karmin on entering into the Lease (the
           "Lease Shares"); and

    (iii)  in the event the Option is exercised, an additional 135,000
           common shares of Karmin on closing of the Option Acquisition
           (the "Option Shares", and together with the Shares and the Lease
           Shares, the "Cushuro Shares").






 In addition to the issuance of the Cushuro Shares, Karmin has agreed to  use its best efforts to complete an equity financing on or before  December 31, 2012, pursuant to which Karmin will raise net proceeds of  not less than $4,000,000 (the "Financing").  Assuming successful completion of the Financing, Karmin has agreed  to pay an aggregate amount of $2,500,000 in cash to the Vendor from the  net proceeds of the Financing (the "Financing Payment").  The Financing Payment will be paid in two equal instalments, with  the first payable on the closing date of the Financing and the second  on the date which is 12 months after the closing of the Financing. 

 The terms, conditions and timing of the Financing have not been  determined and Karmin can offer no assurance that it will be successful  in completing the Financing.  If the Financing is not completed, Karmin  is not under any obligation to pay any portion of the Financing Payment  to the Vendor. 

 Immediately following the closing of the Acquisition, the Vendor will  become a Control Person of Karmin. At that time, the Vendor will hold  approximately 27.53% of the common shares of Karmin that will then be  issued and outstanding (assuming no other issuances of common shares).   Following the entering into of the Lease, the Vendor will hold  approximately 27.55% of the common shares of Karmin that will then be  issued and outstanding (assuming no other issuances of common shares)  and, in the event that the Option is exercised, the Vendor will hold  approximately 27.73% of the common shares of Karmin that will then be  issued and outstanding (assuming no other issuances of common shares).  The Cushuro Shares to be issued to the Vendor will be issued pursuant  to exemptions from the prospectus requirements of applicable Canadian  securities laws. 

 The closing price of the common shares of Karmin on November 21, 2011,  the trading day immediately preceding the execution of the Purchase  Agreement and the Option Agreement, was $0.69 per common share (the "Share Price"), resulting in the total value of the consideration to be paid in  connection with (i) the Acquisition being $10,246,500.00, or  $12,746,500.00, including the Financing Payment, if the Financing is  completed; (ii) the Lease being $10,350.00; and (iii) the Option  Acquisition being $93,150.00.  Assuming the Option is exercised, and,  based on the Share Price, the aggregate consideration paid by Karmin to  the Vendor in connection with the Cushuro Acquisition will be  $10,350,000.00, or $12,850,000.00, including the Financing Payment, if  the Financing is completed. No finder's fees will be paid in connection  with the Cushuro Acquisition. 

 Designated Director 

 Pursuant to the Purchase Agreement, Karmin has also granted the Vendor  the right to designate an individual (the "Designated Director") to be included among the nominees to act as directors of Karmin at  the next meeting of shareholders of Karmin at which the Board is to be  elected, which meeting is currently scheduled to be held on Wednesday,  January 18, 2012 (the "Meeting"). 

 The Vendor has designated Dr. Luis Rodríguez-Mariátegui Canny as its  Designated Director.  Dr. Rodríguez-Mariátegui Canny is a partner at  Hernández & Cía. Abogados, a law firm in Lima, Peru, and is considered  to be an expert in the areas of corporate law, mining law and  environmental law.  He is a member of the Legal Committee of the  National Society of Mining, Oil and Energy in Peru (the "SNMPE"), member of the Legal Committee of the Peruvian American Chamber of  Commerce, member of the Environmental Affairs Committee of the SNMPE  and Director of Institute of Mining and Energy Studies in Peru. He is  also a member of the Peruvian Institute of Mercantile Law and of the  Peruvian Association of Maritime Law. Dr. Rodríguez-Mariátegui Canny  has acted as a member of the board of directors of several Peruvian and  foreign companies. 

 The appointment of the Designated Director is conditional on the  approval of the Exchange, his election by the shareholders of Karmin at  the Meeting, and on the closing of the Acquisition. 

 Financial Resources of Karmin 

 Karmin currently has approximately $300,000 of working capital, which it  intends to use to fund payment obligations relating to the Cushuro  Mining Concessions and to fund exploration and development on the  property consisting of the Cushuro Mining Concessions.  Karmin intends  to complete the Financing to satisfy the Financing Payment and to  provide additional working capital to fund further exploration and  development of the Cushuro Mining Concessions. 

 Shareholder Approval 

 Karmin intends to seek the shareholder approval required by the Exchange  in connection with the issuance of the Cushuro Shares, which result in  the Vendor becoming a Control Person, by way of written consent of  shareholders of Karmin holding over 50% of the common shares currently  issued and outstanding in accordance with the policies of the Exchange. 

 Karr Securities Inc., which holds approximately 37.4% of the outstanding  common shares and which is currently Karmin's largest shareholder,  together with each of the directors and executive officers of Karmin,  have indicated that they support the Cushuro Acquisition and will sign  any such written consent of shareholders. 

 Exchange Approval 

 The Cushuro Acquisition will constitute a Reviewable Acquisition under  the policies of the Exchange and, accordingly, must be approved by the  Exchange.  The Cushuro Acquisition cannot close until such approval is  obtained, and Karmin intends to file its application to the Exchange  for approval of the Cushuro Acquisition forthwith. 

 Exchange policies mandate that trading in the common shares of Karmin be  halted pending receipt and review by the Exchange of documentation  relating to the Cushuro Acquisition, including a title opinion in  respect of the Cushuro Mining Concessions and a technical report  prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101").  Karmin can offer no assurances as to when such halt will be lifted  by the Exchange. 

 Closing of the Cushuro Acquisition 

 Closing of each of the Acquisition, the Option Acquisition and the  entering into of the Lease is subject to customary closing conditions,  in addition to the requirement to obtain the approval of the Exchange  and the shareholders of Karmin as noted above.  Karmin intends to close  the Acquisition as soon as possible following receipt of such  approvals. 

 Karmin will issue a news release regarding the status of the Cushuro  Acquisition every 30 days following today's date until the Acquisition  has closed in accordance with applicable policies of the Exchange.  Concurrently with the closing of the Acquisition, Karmin will enter  into the Lease with the Vendor.  Karmin will also issue a news release  if and when it elects to exercise the Option. 

 Description of Property 

 The Cushuro Mining Concessions 

 The Cushuro Mining Concessions are located in the Huamachuco Gold-Mining  District in the sierras of northwestern Peru.  The concessions include  a gold-mineralized zone, the Zona Cushuro, discussed below, that is  similar to other operating mines in the district, including Lagunas  Norte, La Virgen, La Arena, El Toro and Santa Rosa.  These other mines  are located within approximately 30 kilometres of the Cushuro Mining  Concessions.  The concessions cover a 25 square kilometre area, span an  elevation range of 3,900 to 4,200 meters, and can be reached in four to  five hours via well-maintained roads from Trujillo (a departmental  capital on the Pacific coast).  The area is crossed by a power  transmission line. 

 Karmin has received a draft technical report dated November 13, 2011  (the "Report") in respect of the Cushuro Mining Concessions prepared by an  independent qualified person, as that term is defined in NI 43-101,  which will be submitted to the Exchange for review and then finalized.   Based on the results of the Report, Karmin intends to implement a work  plan on the Cushuro Mining Concessions with the aim of identifying an  economically viable gold-silver ore deposit.  The anticipated work plan  will include a detailed geological, geochemical and geophysical  evaluation followed by a 3,000 metre reverse circulation drill  program.  Karmin anticipates the total cost of this work plan to be  approximately $700,000. 

 Although there are other zones of mineralization on the Cushuro Mining  Concessions, including meter-wide veins yielding multi-ounce silver  assays (the "Zona Escalerillas") in the southern part of the property, based on the Report, Karmin  expects its main target to be the Zona Cushuro, located in the  northeast of the property (on the Gaby 2 claim, one of the Purchased  Mining Concessions). 

 The Report notes that the Zona Cushuro is similar to other operating  mines in the district, inasmuch as low-grade (typically 1000 ppb gold)  epithermal, disseminated gold (±silver) mineralization is hosted in  folded, faulted and silicified quartzites of the lower Cretaceous Chimu  Formation.  The Chimu quartzites in the Zona Cushuro are highly  fractured and brecciated.  The fractures are generally steep dipping  while the bedding strikes north-northeasterly, parallel to the trend of  the zone, and dips 30° to 35° east. Goethite and hematite commonly fill  the multi-directional (stockwork) fractures and form the matrix of the  breccias.  The Zona Cushuro is about 560m long, 150m wide, and spans a  vertical interval of about 60m. It covers approximately 10 hectares and  is open to the south and west. 

 Previous Exploration Results 

 The Report notes that, during the period 2004 to 2006, Minera IRL  undertook exploration activities on the Cushuro Mining Concessions.  An  internal report was prepared for Minera IRL by two of its employees,   L. Macedo and I. Herrera (the "Minera Report"), summarizing the findings of these activities. 

 In 2004, Minera IRL successfully drilled 6 shallow holes totalling 341.5  meters (other attempted holes apparently had serious recuperation  problems). The best assay results were from hole DDH 5, which  intersected 46.45 meters grading 534 ppb gold between 16.0 meters and  62.45 meters (end of hole).  This  included a 12-m segment between  36.0m to 48.0m that graded 1.8 g/t gold, and one 2-m higher grade assay  of 8.4 g/t gold between 42 meters and 44 meters. Hole DDH 1 intersected  18 meters grading 0.16g/t gold between 10 meters and 28 meters, and did  not have any higher grade intercepts. The remaining four holes  intersected scattered intervals of geochemically anomalous gold with no  higher grade intercepts.  Additional details with respect to the  results of these investigations are discussed below. 

 During the 2004 to 2006 period, Minera IRL took 621 rock samples from  the Zona Cushuro. Most of these were 6-meter-long channel samples.  Basic statistics for the gold-assay results are as follows: 





                                   

    Number of Samples (n):        621

    Average assay:                0.755 ppm (755 ppb)

    Top 5%ile assays:             2.73 ppm

    Top 10%ile assays:            1.00 ppm

    50%ile (median) assays:       0.070 ppm (70 ppb)

    Range of assays:              Trace to 87.1 ppm

    Variance:                     18.243

    Standard deviation:           4.271

                                   






 The Report concludes that the profound difference between values for  "average assay, 755 ppb gold" (sum of all assays divided by population  "n") and "median assay, 70 ppb gold" (half of the population is higher  grade and half is lower grade) means either that the distribution of  gold is controlled by a few distinct gold-bearing structures, or that  there is a "nugget" effect (the gold assays include randomly high-grade  results).  The distribution of rocks in the Zona Cushuro that returned  assays greater than 0.30 ppm (300ppb) gold encompasses a sub-zone measuring about 2.5 hectares (420m x 60m) within  which lie the majority of the values greater than 0.3 ppm (300 ppb)  gold.  Within the sub-zone the mean gold grade has doubled to 1.54 ppm  gold and the median gold value has almost quadrupled to 0.24 ppm (240  ppb).  The population of the sub-zone comprises 293 samples. 

 The Report concludes there are at least two trends of mineralization  apparent at the Zona Cushuro and it does not look as though the higher  grade values are confined to one, or two, or even several distinct  structures and it seems as though there is indeed a nugget effect.  The  author of the Report believes that this conclusion is supported by the  operation of informales (small-scale miners) in the Zona Cushuro for the past several years,  and who generally operate in areas with a grade of at least 5,000 ppb  (5 g/t) gold in order to realize a profit. 

 Results of Previous Investigations 

 The Report states that thirteen diamond drill holes totalling 637.15 meters were drilled by  Minera IRL on the property relating to the Cushuro Mining Concessions  in 2004. The locations of the drill holes are outlined in Table 1,  below. Four of the thirteen holes were re-drilled due to poor core  recovery in the original holes, although it is unclear in the Minera  Report exactly what holes were re-drilled. In general, the Mineral  Report is vague with respect to details about the diamond-drilling  programme. 

 Table 1: Drill Hole Information 




     _____________________________________________________________________________________
    |  |          |      |       |      |Length|       |   |       |           |          |
    |# |    Name  |PSA56E|PSA56N |Elev'n| (m)  |Azimuth|Dip| Loc'n |    Start  |     End  |
    |__|__________|______|_______|______|______|_______|___|_______|___________|__________|
    |  |   CUSH   |      |       |      |      |       |   |  Pit  |           |          |
    |1 | 04-DDH01 |169355|9126636| 4039 |47.35 |  305o |-60|Cushuro|27/09/2004 |28/09/2004|
    |__|__________|______|_______|______|______|_______|___|_______|___________|__________|
    |  |   CUSH   |      |       |      |      |       |   |  Pit  |           |          |
    |2 | 04-DDH02 |169380|9126599| 4020 |47.00 |  305o |-55|Cushuro|04/10/2004 |06/10/2004|
    |__|__________|______|_______|______|______|_______|___|_______|___________|__________|
    |  |   CUSH   |      |       |      |      |       |   |  Pit  |           |          |
    |3 | 04-DDH03 |169326|9126573| 4025 |47.30 |  305o |-55|Cushuro|09/10/2004 |12/10/2004|
    |__|__________|______|_______|______|______|_______|___|_______|___________|__________|
    |  |   CUSH   |      |       |      |      |       |   |  Pit  |           |          |
    |4 | 04-DDH04 |169293|9126539| 4032 |81.90 |  300o |-55|Cushuro|15/10/2004 |21/10/2004|
    |__|__________|______|_______|______|______|_______|___|_______|___________|__________|
    |  |   CUSH   |      |       |      |      |       |   |  Pit  |           |          |
    |5 |04-DDH04-1|169293|9126539| 4032 |18.00 |  300o |-70|Cushuro|22/10/2004 |22/10/2004|
    |__|__________|______|_______|______|______|_______|___|_______|___________|__________|
    |  |   CUSH   |      |       |      |      |       |   |Cushuro|           |          |
    |6 | 04-DDH05 |169400|9126683| 4035 |62.45 |  300o |-45|  N.   |26/10/2006 |29/10/2004|
    |__|__________|______|_______|______|______|_______|___|_______|___________|__________|
    |  |   CUSH   |      |       |      |      |       |   |Cushuro|           |          |
    |7 | 04-DDH06 |169470|9126755| 4056 |58.50 |  295o |-45|  N.   |31/10/2004 |03/11/2004|
    |__|__________|______|_______|______|______|_______|___|_______|___________|__________|
    |  |   CUSH   |      |       |      |      |       |   |Cushuro|           |          |
    |8 | 04-DDH07 |169478|9126819| 4056 |50.40 |  295o |-45|  N.   |05/11/2004 |07/11/2004|
    |__|__________|______|_______|______|______|_______|___|_______|___________|__________|
    |  |   CUSH   |      |       |      |      |       |   |  Pit  |           |          |
    |9 |04-DDH01-A|169353|9126634| 4039 |68.75 |  300o |-45|Cushuro|10/11/2004 |11/11/2004|
    |__|__________|______|_______|______|______|_______|___|_______|___________|__________|
    |  |   CUSH   |      |       |      |      |       |   |  Pit  |           |          |
    |10|04-DDH03-A|169319|9126568| 4026 |23.95 |  305o |-45|Cushuro|14/11/2004 |15/11/2004|
    |__|__________|______|_______|______|______|_______|___|_______|___________|__________|
    |  |   CUSH   |      |       |      |      |       |   |  Pit  |           |          |
    |11|04-DDH03-B|169327|9126575| 4024 |33.85 |  300o |-45|Cushuro|17/11/2004 |18/11/2004|
    |__|__________|______|_______|______|______|_______|___|_______|___________|__________|
    |  |   CUSH   |      |       |      |      |       |   |Cushuro|           |          |
    |12| 04-DDH08 |169544|9126380| 3994 |50.00 |  240o |-50|  N.   |21/11/2004 |23/11/2004|
    |__|__________|______|_______|______|______|_______|___|_______|___________|__________|
    |  |   CUSH   |      |       |      |      |       |   |Cushuro|           |          |
    |13| 04-DDH09 |169765|9126126| 3982 |47.70 |  250o |-50|  N.   |26/11//2004|27/11/2004|
    |__|__________|______|_______|______|______|_______|___|_______|___________|__________|
    |  |          |      |       |      |      |       |   |       |           |          |
    |__|__________|______|_______|______|______|_______|___|_______|___________|__________|
    |  |Total     |      |       |      |637.15|       |   |       |           |          |
    |__|__________|______|_______|______|______|_______|___|_______|___________|__________|





 Apparently, core recuperation was a problem, and core was assayed only  from six holes (CUSH 04- 01, 02, 03, 04, 05, and 06). A total of 172  core samples were collected from these 6 holes at 2-meter intervals.   All holes were spotted so as to intersect bedding at an angle  approaching perpendicular (that is; they were directed towards the  northwest or southwest at angles of -45° to -70°). 

 As noted above, the best assay results were from hole DDH 5, which  intersected 46.45 meters grading 0.534 g/t gold between 16.0m and  62.45m (end of hole). This included a 12-m segment between 36.0m to  48.0m that graded 1.8 g/t gold, and one 2-m higher grade assay of 8.4  g/t gold between 42 meters and 44 meters. Hole DDH 1 intersected 18  meters grading 0.16g/t gold between 10 meters and 28 meters, and did  not have any higher grade intercepts. The remaining four holes  intersected scattered intervals of geochemically anomalous gold with no  higher grade intercepts. 

 The author of the Report believes that the quantity of drilling done,  particularly in a system with nugget-effect gold distribution and  drill-core recuperation problems due to intense fracturation, was  inadequate to realistically evaluate the economic significance of the  Zona Cushuro. 

 The Report's author is concerned that the drill holes were not correctly  configured. Most drill holes were spotted at (or close) to the  topographical summit of the Zona Cushuro trend (directly on top of  rock-geochemical gold anomalies), and were inclined westward in order  to intersect east-dipping strata. This means that if the mineralization  is stratigraphically controlled, and if the rock-geochemical gold  anomalies are at the base of the stratigraphically mineralized system,  then the drill holes would quickly pass out of the mineralized package  and into barren foot-wall sediments. The drill holes should have been  stepped out to the east in order to intersect stratigraphically higher  parts of the mineralized system. In this regard, it is interesting to  note that the best hole, DDH 5, was stepped out further to the east  from the central axis of the Cushuro gold-in-rock geochemical anomaly  than any other hole except DDH 6, which itself may have been north of  and outside of the mineralized zone. 

 Although neither the Minera Report nor the data from Minera IRL's  2004-2006 exploration program has been fully verified by any qualified  person, the Report's author, an independent qualified person for  purposes of NI 43-101, has reviewed the findings and the Minera Report,  and is reasonably satisfied that best practices procedures were  followed by Minera IRL in conducting its exploration program. 

 The author of the Report cannot comment on Minera IRL's quality  assurance and quality control program as the author was not involved in  the exploration program from 2004 to 2006.  The Report states, however,  that the Minera Report indicates that all samples were submitted to  CIMM, which is an ISO-certified laboratory in Lima, Peru. 

 The Report's verification program confirms that the Minera IRL assay  data are reasonably consistent with the Report's verification program.  The author of the Report is reasonably satisfied that "best-practices"  procedures were adhered to by Mineral IRL, and that none of the  exploration results reported therein are deliberately misleading. 

 Results of 2011 Investigations 

 The author of the Report has also conducted certain investigations on  the property relating to the Cushuro Mining Concessions to support the  conclusions drawn in the Report.  The author of the Report visited the  property on September 7-8, 2011 to inspect the area of the Zona Cushuro  at the northeast extremity of the property. The author verified the  positions of two drill platforms and collected five chip samples from  brecciated and fractured quartzites at the Zona Cushuro.  Ten samples  (9 chip samples at 20-cm intervals and 1 panel sample) were collected  by an assistant under the direct visual supervision of the author. The  author of the Report is completely satisfied with security measures  taken to ensure the integrity of the verification samples which were  assayed at the CIMM Lab (an ISO-certified company) in Lima, Peru. 

 Key-element assay results for the author's ten QP samples are shown in  Table 2, below. The analytical results confirm economically significant concentrations  of gold in the five samples taken at Zona Cushuro. The weighted average  grade of the five samples, which have an accumulated length of 56.0  meters, is 0.27 g/t gold. Although the author did not obtain higher  grade assay results, the tenor of mineralization is consistent with  results reported by Minera IRL. Elevated silver, arsenic and antimony  are associated with the anomalous gold values. The five samples  collected from quartzite outcrops to the north of Zona Cushuro  contained 20 ppb gold (with one exception of 89 ppb gold) and  generally had lower values for silver, arsenic and antimony. 

 Table 2: Assay Verification, Zona Cushuro and Area 




     _________________________________________________________________________________
    |      |      |       |    |Alt |     | L |     |Au |     | As |Sb |Comments      |
    |Sample|PSA56E|PSA56 N|Zone|(m) |Type |(m)|Dir'n|ppb|Agppm|ppm |ppm|              |
    |______|______|_______|____|____|_____|___|_____|___|_____|____|___|______________|
    |      |      |       |    |    |     |   |     |   |     |    |   |granular      |
    |      |      |       |    |    |     |   |     |   |     |    |   |quartzite,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |partly white, |
    |      |      |       |    |    |     |   |     |   |     |    |   |partly        |
    |      |      |       |    |    |     |   |     |   |     |    |   |hematitic,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |highly        |
    |      |      |       |    |    |     |   |     |   |     |    |   |fractured,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |some segments |
    |      |      |       |    |    |     |   |     |   |     |    |   |w / distinct  |
    |      |      |       |    |    |     |   |     |   |     |    |   |quartz        |
    |      |      |       |    |    |     |   |     |   |     |    |   |microveinlets,|
    |      |      |       |    |    |     |   |     |   |     |    |   |some          |
    |      |      |       |    |    |     |   |     |   |     |    |   |brecciated    |
    |VR 501|169325|9126613|18M |4001|chips| 9 |120° |231| 0.2 |668 |40 |segments      |
    |______|______|_______|____|____|_____|___|_____|___|_____|____|___|______________|
    |      |      |       |    |    |     |   |     |   |     |    |   |granular      |
    |      |      |       |    |    |     |   |     |   |     |    |   |quartzite,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |partly white, |
    |      |      |       |    |    |     |   |     |   |     |    |   |partly        |
    |      |      |       |    |    |     |   |     |   |     |    |   |hematitic,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |highly        |
    |      |      |       |    |    |     |   |     |   |     |    |   |fractured,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |some segments |
    |      |      |       |    |    |     |   |     |   |     |    |   |w / distinct  |
    |      |      |       |    |    |     |   |     |   |     |    |   |quartz        |
    |      |      |       |    |    |     |   |     |   |     |    |   |microveinlets,|
    |      |      |       |    |    |     |   |     |   |     |    |   |some          |
    |      |      |       |    |    |     |   |     |   |     |    |   |brecciated    |
    |VR 502|169306|9126607|18M |4010|chips|12 |130° |252| 0.5 |415 |12 |segments      |
    |______|______|_______|____|____|_____|___|_____|___|_____|____|___|______________|
    |      |      |       |    |    |     |   |     |   |     |    |   |granular      |
    |      |      |       |    |    |     |   |     |   |     |    |   |quartzite,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |partly white, |
    |      |      |       |    |    |     |   |     |   |     |    |   |partly        |
    |      |      |       |    |    |     |   |     |   |     |    |   |hematitic,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |highly        |
    |      |      |       |    |    |     |   |     |   |     |    |   |fractured,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |some segments |
    |      |      |       |    |    |     |   |     |   |     |    |   |w / distinct  |
    |      |      |       |    |    |     |   |     |   |     |    |   |quartz        |
    |      |      |       |    |    |     |   |     |   |     |    |   |microveinlets,|
    |      |      |       |    |    |     |   |     |   |     |    |   |some          |
    |      |      |       |    |    |     |   |     |   |     |    |   |brecciated    |
    |VR 503|169313|9126596|18M |4010|chips|11 |142° |636|   1 |4020|193|segments      |
    |______|______|_______|____|____|_____|___|_____|___|_____|____|___|______________|
    |      |      |       |    |    |     |   |     |   |     |    |   |granular      |
    |      |      |       |    |    |     |   |     |   |     |    |   |quartzite,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |partly white, |
    |      |      |       |    |    |     |   |     |   |     |    |   |partly        |
    |      |      |       |    |    |     |   |     |   |     |    |   |hematitic,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |highly        |
    |      |      |       |    |    |     |   |     |   |     |    |   |fractured,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |some segments |
    |      |      |       |    |    |     |   |     |   |     |    |   |w / distinct  |
    |      |      |       |    |    |     |   |     |   |     |    |   |quartz        |
    |      |      |       |    |    |     |   |     |   |     |    |   |microveinlets,|
    |      |      |       |    |    |     |   |     |   |     |    |   |some          |
    |      |      |       |    |    |     |   |     |   |     |    |   |brecciated    |
    |VR 504|169317|9126579|18M |4010|chips|11 |210° |109| 0.2 |256 |-5 |segments      |
    |______|______|_______|____|____|_____|___|_____|___|_____|____|___|______________|
    |      |      |       |    |    |     |   |     |   |     |    |   |granular      |
    |      |      |       |    |    |     |   |     |   |     |    |   |quartzite,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |partly white, |
    |      |      |       |    |    |     |   |     |   |     |    |   |partly        |
    |      |      |       |    |    |     |   |     |   |     |    |   |hematitic,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |highly        |
    |      |      |       |    |    |     |   |     |   |     |    |   |fractured,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |some segments |
    |      |      |       |    |    |     |   |     |   |     |    |   |w / distinct  |
    |      |      |       |    |    |     |   |     |   |     |    |   |quartz        |
    |      |      |       |    |    |     |   |     |   |     |    |   |microveinlets,|
    |      |      |       |    |    |     |   |     |   |     |    |   |some          |
    |      |      |       |    |    |     |   |     |   |     |    |   |brecciated    |
    |VR 505|169278|9126544|18M |4016|chips|13 |165° |134| 2.9 |2161|523|segments      |
    |______|______|_______|____|____|_____|___|_____|___|_____|____|___|______________|
    |      |      |       |    |    |     |   |     |   |     |    |   |granular      |
    |      |      |       |    |    |     |   |     |   |     |    |   |quartzite,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |partly white, |
    |      |      |       |    |    |     |   |     |   |     |    |   |partly        |
    |      |      |       |    |    |     |   |     |   |     |    |   |hematitic,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |highly        |
    |      |      |       |    |    |     |   |     |   |     |    |   |fractured,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |specularite in|
    |VR 506|169438|9127079|18M |4044|chips| 5 | 30° | 6 | 0.2 | 73 |-5 |some fractures|
    |______|______|_______|____|____|_____|___|_____|___|_____|____|___|______________|
    |      |      |       |    |    |     |   |     |   |     |    |   |granular      |
    |      |      |       |    |    |     |   |     |   |     |    |   |quartzite,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |partly white, |
    |      |      |       |    |    |     |   |     |   |     |    |   |partly        |
    |      |      |       |    |    |     |   |     |   |     |    |   |hematitic,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |highly        |
    |VR 507|169480|9126976|18M |4041|chips| 9 |130° |-5 |-0.2 | 53 |-5 |fractured     |
    |______|______|_______|____|____|_____|___|_____|___|_____|____|___|______________|
    |      |      |       |    |    |     |   |     |   |     |    |   |granular      |
    |      |      |       |    |    |     |   |     |   |     |    |   |quartzite,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |partly white, |
    |      |      |       |    |    |     |   |     |   |     |    |   |partly        |
    |      |      |       |    |    |     |   |     |   |     |    |   |hematitic,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |highly        |
    |VR 508|169483|9126915|18M |4037|panel|1x1|  na |89 |-0.2 |497 |14 |fractured     |
    |______|______|_______|____|____|_____|___|_____|___|_____|____|___|______________|
    |      |      |       |    |    |     |   |     |   |     |    |   |granular      |
    |      |      |       |    |    |     |   |     |   |     |    |   |quartzite,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |partly white, |
    |      |      |       |    |    |     |   |     |   |     |    |   |partly        |
    |      |      |       |    |    |     |   |     |   |     |    |   |hematitic,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |highly        |
    |VR 509|169441|9126883|18M |4041|chips| 4 |144° |20 |-0.2 | 60 |-5 |fractured     |
    |______|______|_______|____|____|_____|___|_____|___|_____|____|___|______________|
    |      |      |       |    |    |     |   |     |   |     |    |   |granular      |
    |      |      |       |    |    |     |   |     |   |     |    |   |quartzite,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |partly white, |
    |      |      |       |    |    |     |   |     |   |     |    |   |partly        |
    |      |      |       |    |    |     |   |     |   |     |    |   |hematitic,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |highly        |
    |      |      |       |    |    |     |   |     |   |     |    |   |fractured,    |
    |      |      |       |    |    |     |   |     |   |     |    |   |some segments |
    |VR 510|169403|9126889|18M |4027|chips| 5 |110° | 6 | 0.4 | 69 |-5 |of mudstone   |
    |______|______|_______|____|____|_____|___|_____|___|_____|____|___|______________|





 The author also took photos within the area of Zona Cushuro which show, among other things, (i) a typical outcrop of highly fractured quartzite (and one obvious  bedding plane); (ii) an example of "fragment-supported" breccia in a  limonite matrix; and (iii) at the opposite end of the spectrum, with  breccia that is supported in a limonite matrix. 

 The author of the Report returned to the Cushuro Mining Concessions on  October 19-20, 2011, to re-visit the Zona Cushuro and to briefly  examine Veta Escalerilla at the south end of the property. Three  samples were collected from Veta Escalerilla. The Veta Escalerilla  samples were collected and analyzed in a similar manner as the ten  samples collected from the Zona Cushuro area. Key-element assay results  are shown in Table 3, below. Samples VR 511 and VR 512 are select grab  samples of pyritiferous quartzite from the wall-rocks of mined-out,  steeply dipping vein structures striking 250 and 140 degrees  respectively. The Report indicates these samples have economically  significant concentrations of gold, silver, lead and zinc. Sample VR  513 is a float sample of quartz-vein material comprising vuggy and  druzy silica. It yielded the highest gold assay (1.265 g/t), but did  not have economically significant concentrations of lead or zinc. 

 Table 3: Veta Escalerilla Samples 




     ________________________________________________
    |Sample|Au g/t|Ag g/t|As ppm|Pb ppm|Sb ppm|Zn ppm|
    |______|______|______|______|______|______|______|
    |VR 511|0.298 | 63.8 |  932 | 3026 |   51 | 7230 |
    |______|______|______|______|______|______|______|
    |VR 512|0.199 |  9.1 |  444 | 1496 |  107 | 1960 |
    |______|______|______|______|______|______|______|
    |VR 513|1.265 | 11.7 |  211 |  301 |   11 |  483 |
    |______|______|______|______|______|______|______|





 Qualified Person 

 Mr. John A. Brophy, P.Geo, is a graduate of McGill University and holds  a BSc in geology and has thirty-nine years of continuous exploration  experience, including the past sixteen years in Peru.  He is a member  of the Northern Association of Professional Engineers, Geologists and  Geophysicists and a Fellow of the Society of Economic Geologists.  Mr.  Brophy is an Independent Qualified Person for purposes of NI 43-101 and  has reviewed and approved the technical information relating to the  Cushuro Mining Concessions contained in this release, in the form and  context in which it appears.  Mr. Brophy is the author of the Report,  which Karmin intends to file, together with the applicable certificates  and consents, in accordance with the provisions of NI 43-101. 

 About Karmin 

 The common shares of Karmin are listed on the Exchange and trade under  the symbol "KAR". The principal business of Karmin is to acquire and  explore resource properties. Currently, Karmin's main project is  located at Aripuanã, Brazil. Karmin owns 30% of the Aripuanã zinc  project, one of the largest undeveloped zinc projects in Brazil.  Aripuanã covers a complete mineralized massive sulphide district, with  five areas of mineralization (Arex, Ambrex, Babacu, Massaranduba and  Mocoto) over a 25 kilometre strike length. Karmin also owns 100% of the  Aripuanã gold-silver project which includes the gold and silver  mineralization associated with the near surface oxidized portions of  the massive sulphide deposits. 

  





     






 Disclaimer Relating to Forward-Looking Information  

 This news release contains forward-looking statements, including those  relating to the Cushuro Acquisition and information that are based on  the belief of management and reflect Karmin's current expectations.  Forward-looking statements include, but are not limited to, possible  events and statements. The words "plans," "expects," "is expected,"  "scheduled," "estimates," "forecasts," "projects," "intends,"  anticipates," or "believes," or variations of such words and phrases or  statements that certain actions, events or results "may," "could,"  "would," "might," or "will be taken," "occur," and similar expressions  identify forward-looking statements. The forward-looking statements and  information in this press release include, but are not limited to,  information relating to the business plans of Karmin, the Acquisition  and the Option Acquisition , the assumption  that no other common shares in the capital of Karmin will be issued  prior to the issuance of the Shares, the Lease Shares and the Option  Shares and the Financing. Such statements and information reflect the  current view of Karmin with respect to risks and uncertainties that may  cause actual results to differ materially from those contemplated in  those forward-looking statements and information. 

 Such statements are not historical facts. Readers are cautioned not to  place undue reliance on forward-looking statements, as there can be no  assurance that the plans, intentions or expectations upon which they  are based will occur. By their nature, forward-looking statements  involve numerous assumptions, known and unknown risks and  uncertainties, both general and specific, that contribute to the  possibility that the predictions, forecasts, projections in the  forward-looking statements will not occur, and that actual performance  and results in future periods may 

 differ materially from any estimates or projections of future  performance or results expressed or implied by such forward-looking  statements. These assumptions, risks and uncertainties include, among  other things, the inability to obtain Exchange approval of the Cushuro  Acquisition, to obtain shareholder approval of the creation of a new  Control Person, to satisfy all other closing conditions or to complete  the Financing and that no other common shares in the capital of Karmin  will be issued prior to the issuance of the Shares, the Lease Shares  and the Option Shares. 

 The Cushuro Mining Concessions and the land they relate to are  exploration properties only.  Accordingly, there are a number of  important factors that could cause Karmin's actual results to differ  materially from those indicated or implied by forward-looking  statements and information. Such factors relating to the Cushuro Mining  Concessions include, among others, the timing and content of work  programs, results of the development of mineral properties, including  the Cushuro Mining Concessions, the interpretation of drilling results  and other geological data, the uncertainties of resource and reserve  estimates, receipt and security of mineral property titles, receipt of  licenses to conduct mining activities, project cost overruns or  unanticipated costs and expenses, fluctuations in metal prices and  general market and industry conditions, changes in national and local  government legislation, taxation, controls, policies and regulations,  the security of personnel and assets, and political or economic  developments in Canada and Peru, operating or technical difficulties in  connection with mining or development activities, employee relations,  the speculative nature of mineral exploration and development and the  risks and hazards associated with the business of mineral exploration,  development and mining, including environmental hazards, industrial  accidents, unusual or unexpected formations, pressures, cave-ins and  flooding. 

 Karmin cautions that the foregoing list of material factors is not  exhaustive. When relying on Karmin's forward-looking statements and  information to make decisions, investors and others should carefully  consider the foregoing factors and other uncertainties and potential  events. Karmin has assumed a certain progression of events which may  not be realized. It has also assumed that the material factors referred  to in the previous paragraph will not cause such forward-looking  statements and information to differ materially from actual results or  events. However, the list of these factors is not exhaustive and is  subject to change and there can be no assurance that such assumptions  will reflect the actual outcome of such items or factors. 

 The forward-looking statements contained in this news release are made  as of the date of this news release. Readers should not place undue  importance on forward-looking information and should not rely upon this  information as of any other date. Except as required by law, Karmin  disclaims any intention and assumes no obligation to update or revise  any forward-looking statements, whether as a result of new information,  future events or otherwise. Additionally, Karmin undertakes no  obligation to comment on the expectations of, or statements made by,  third parties in respect of the matters discussed above. 

 The Exchange has not reviewed and does not accept responsibility for the  adequacy or accuracy of this news release. 

    

   

Karmin Exploration Inc.


CONTACT:  David Brace                            or           John IannozziChief Executive Officer                             Chief Financial OfficerEmail: [e-mail]                        Email: [e-mail]: [phone]                                 Tel: [phone] 


    

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