Karmin Provides Update on Status of Previously Announced Acquisition

    




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

 TORONTO, Dec. 21, 2011 /CNW/ - On November 22, 2011, Karmin Exploration  Inc. ("Karmin")  issued a news release (the "News Release") announcing that it had 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 also announced that it had  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 also 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. 

 Please see the News Release for more information about the Cushuro  Acquisition. 

 As noted in the News Release, the Cushuro Acquisition constitutes 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 in the News  Release) to the Vendor, because such issuance will result in the Vendor  becoming a Control Person (as defined in the policies of the  Exchange).  As a result, Exchange policies mandated 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 (the "Technical Report") prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects. 

 Trading in the common shares of Karmin has been halted since November  22, 2011 and, as of the date of this news release, trading in the  common shares of Karmin continues to be halted.  In compliance with the  policies of the Exchange, Karmin is issuing this news release to  provide its shareholders with an update on the status of the Cushuro  Acquisition. 

 Shareholder Approval 

 In satisfaction of the Exchange's shareholder approval requirements, as  noted above, Karmin has obtained the written consent of shareholders  holding over 61% of the common shares that are currently issued and  outstanding and has submitted the consents to the Exchange for its  review. 

 Exchange Approval 

 The Exchange has completed its preliminary review of the draft Technical  Report. In response to comments received from the Exchange, Karmin has  submitted a revised draft Technical Report and continues to work with  the Exchange to satisfy the Exchange's conditions to obtaining final  approval of the Cushuro Acquisition. 

 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 is to be  elected, which meeting is currently scheduled to be held on Wednesday,  January 18, 2012 (the "Meeting").  The Designated Director, Dr. Luis Rodríguez-Mariátegui Canny, was  included among the nominees to act as directors of Karmin in Karmin's  management information circular relating to the Meeting.  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. 

 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  as noted above.  Karmin intends to close the Acquisition as soon as  possible following receipt of such approvals. 

 Karmin will continue to 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. 

 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 and the  Acquisition and 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 inability to obtain Exchange approval of the Cushuro  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. 

 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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