Karmin Announces Closing of Previously Announced Acquisition of 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, Feb. 15, 2012 /CNW/ - Further to its news releases dated  November 22, 2011, December 21, 2011, January 20, 2012 and February 13,  2012, Karmin Exploration Inc. ("Karmin")  announced today that it has acquired 100% of the right,  title and beneficial interest held by Alberto Aurelio Arias Dávila (the  "Vendor"), a well-known Peruvian mining entrepreneur and an arm's length party,  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"). The Acquisition closed following receipt of final approval from the  TSX Venture Exchange (the "Exchange") of the Cushuro Acquisition (as defined below). 

 In addition to the Acquisition, Karmin also announced that it has  entered into a separate agreement to lease (the "Lease") an additional mining concession from the Vendor (the "Option Mining Concession", and together with the Purchased Mining Concessions, the "Cushuro Mining Concessions"), also forming a portion of the Cushuro Property, providing Karmin  with access to the Option Mining Concession during the Option Term (as  defined below). 

 Pursuant to an option agreement (the "Option Agreement") with the Vendor, Karmin was granted 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 the Option Mining Concession  (the "Option Acquisition", and together with the Acquisition, the "Cushuro Acquisition"), exercisable 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"). Karmin intends to issue a news release if and when it elects to  exercise the Option. 

 In connection with the closing of the Acquisition and the entering into  of the Lease, Karmin issued an aggregate of 14,865,000 common shares of  Karmin to the Vendor, representing approximately 27.55% of the total  issued and outstanding common shares of Karmin, which resulted in the  Vendor becoming a Control Person (as defined in the policies of the  Exchange). In the event that the Option is exercised, an additional  135,000 common shares (the "Option Shares") of Karmin will be issued to the Vendor on closing of the Option  Acquisition.  If issued, the Option Shares would bring the Vendor's  aggregate holdings to 15,000,000 common shares of Karmin, representing  approximately 27.73% of the common shares of Karmin that will then be  issued and outstanding (assuming no other issuances of common shares). 

 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 paid in connection  with the Acquisition to $10,246,500.00. Based on the Share Price, the  total value of the consideration paid in connection with the Lease was  $10,350.00. If the Option is exercised, based on the Share Price, the  total value of the consideration to be paid in connection with the  Option will be $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. 

 The Cushuro Mining Concessions are located in the Huamachuco Gold-Mining  District in the sierras of north-western Peru.  The concessions include  a gold-mineralized zone (the "Zona Cushuro") 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 the coastal city of Trujillo. The area is  crossed by a power transmission line.  Please see the news release of  Karmin dated November 22, 2011 for more information about the Cushuro  Mining Concessions.  In compliance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects and the policies of the Exchange, Karmin will promptly file a technical  report in respect of the Cushuro Mining Concessions. 

 In accordance with the policies of the Exchange, trading in the common  shares of Karmin was halted on November 22, 2011 pending receipt and  review by the Exchange of documentation relating to the Cushuro  Acquisition.  The halt on the trading in the common shares of Karmin  was lifted and trading in the common shares resumed on February 13,  2012. 

 Designated Director 

 Pursuant to the Purchase Agreement, Karmin 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 was to be  elected.  Such meeting was held on Wednesday, January 18, 2012 and Dr.  Luis Rodríguez-Mariátegui Canny, the Designated Director, was elected  by the shareholders of Karmin at the meeting, such appointment being  conditional on the approval of the Exchange and on the closing of the  Acquisition.  The Exchange has approved Dr. Rodríguez-Mariátegui  Canny's appointment as director and, upon the closing of the  Acquisition, the Board was pleased to welcome Dr. Rodríguez-Mariátegui  Canny as a director of Karmin. 

 Granting of Options 

 In connection with Dr. Rodríguez-Mariátegui Canny's appointment as  director, the board of directors of Karmin has unanimously resolved to  grant 200,000 stock options (the "Stock Options") to Dr. Rodríguez-Mariátegui Canny effective today.  The Stock Options  permit Dr. Rodríguez-Mariátegui Canny to purchase 200,000 common shares  at an exercise price of $0.59 per common share for a period of 5 years  from today's date.  The closing price of the common shares on the  Exchange on February 14, 2012 was $0.73. Half of the Stock Options vest  immediately with the remainder vesting in equal parts on the first and  second anniversary of the issuance of the Stock Options. The granting  of the Stock Options is subject to the acceptance of the Exchange. 

 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. 

 As a result of the closing of the Acquisition and the entering into of  the Lease, Karmin's main project is the Zona Cushuro project, located  in the Huamachuco Gold District in the sierras of north-western Peru.  The Cushuro Mining 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 the coastal city of  Trujillo. 

 Karmin owns 100% of the Aripuanã Gold-Silver Project which encompasses  the gold and silver mineralization associated with the near surface  oxidized portions of the numerous massive sulphide deposits in the 820  square kilometre Aripuanã Zinc Project located in north-western Brazil. 

 Karmin owns 30% of the Aripuanã Zinc Project, one of the largest  undeveloped zinc projects in Brazil. The Aripuanã Zinc Project covers a  complete mineralized massive sulphide district, with five areas of  mineralization (Ambrex, Arex, Babacu, Massaranduba and Mocoto) over a  25 kilometre strike length.  A technical report completed by AMEC  International (Chile) S.A. (AMEC), a division of AMEC Americas Limited,  in 2007 (available on SEDAR (www.sedar.com) in accordance with National Instrument 43 - 101 - Standards of Disclosure for Mineral Projects states that the Ambrex deposit has indicated resources of 18.3 million  tonnes grading 4.0% zinc, 1.5% lead, 0.18 grams per tonne gold and 35.6  grams per tonne silver.  The Arex deposit has indicated resources of  9.4 million tonnes grading 2.5% zinc, 1.0% lead, 0.45 grams per tonne  gold and 34.7 grams per tonne silver. Votorantim Metais Zinco S/A owns  70% of the Aripuanã Zinc Project but assumes 100% of the project costs  until the completion of a bankable feasibility study. 

  

 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 and the Option  Acquisition (including the exercise of the Option and the completion or  termination of the Option Acquisition). 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 ability to close the  Option Acquisition. 

 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. 

 Neither the Exchange nor its Regulation Services Provider (as that term  is defined in policies of the Exchange) accepts responsibility for the  adequacy or accuracy of this release.  

Karmin Exploration Inc.


CONTACT:  David BraceChief Executive OfficerEmail: [e-mail]: [phone]orJohn IannozziChief Financial OfficerEmail: [e-mail]: [phone] 


    

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