DECEMBER 25, 2013, Carson Hill, California— Oro East Mining, Inc. (OTCBB: OROE), a global mines acquisition, exploration, and development group and pioneer in sustainable mining and refinery technologies, announced today that yesterday, memorializing its earlier October negotiations with Sutton Enterprises, the owners of certain mining claims in Calaveras County, California, the company’s subsidiary Oro East Mariposa, LLC has entered into an Asset Purchase and Option Agreement (the “Agreement”) with Sutton Enterprises.
Under the terms of the Agreement, Oro East Mariposa is purchasing certain minerals, mineral rights and claims, gold tailings, tangible property, and other entitlements commonly referred to by the parties as the WMUs (the “WMUs”) located on certain parcels of real property located in the County of Calaveras, State of California.
The total purchase price for the WMUs is $6,000,000.00 and 30% net royalties contingent on the obtaining of all local, state, and other applicable agency approvals for the gold mineral concentrates production contemplated. Thereafter, the $6,000,000.00 shall be paid in certain installments, and the 30% net royalties will be held in escrow as secured collateral against the Agreement in favor of the Subsidiary.
The Agreement further reserves an Option in favor of the Subsidiary for purchase of 39 parcels of real property as described in the Agreement and all claims rights, business assets, and additional property and assets as set forth in the Agreement for a purchase price of $32,000,000.00 less the $6,000,000.00 already paid on the WMUs. The Option period is for 180 days from the date of the contract. However, currently there are no known mineral reserves and no refinery operations on any property the Company is examining.
The subsidiary has commenced processing the WMU stockpiles into gold concentrates and the first shipment of sale of gold concentrates was transacted shortly thereafter in December. The Company by way of its subsidiary is now continuing its processing of the stockpiles into gold concentrates for sale. Presently through Oro East Mariposa, LLC, the Company is processing the tailings in the WMUs for gold concentrates.
Placer gold has been mined at the site since 1849, followed quickly by fortuitous underground mining and surface mining. Mining depths extended to 4,450 feet below ground surface with approximately 65 tunnels and 78 shafts. Underground mining continued until 1924, ceased for a while, and continued again until 1942. Large scale open pit mining commenced at Carson Hill in the 1980s under Western Mining Corporation, but due to cyanide leaching, the site was closed in 1992 by the California Regional Water Quality Control Board (“Water Board”) and three heap leach units were formed, the WMUs, from the cyanide solution flushing process, pursuant to the Water Board’s Waste Discharge Requirements, Order No. 92-009. Sutton Enterprises became the owner of Carson Hill in 1997, though Western Mining retained the liability of the WMUs and for treating the groundwater contamination of its past mining activities.
Sutton Enterprises holds a mining use permit that will endure until December 31, 2030, which allows for the “mining, processing, including blasting, crushing, concrete batch plant and hot plant, and offsite hauling of the existing reclaimed [WMU] stockpiles,” with specific orders. For a complete chronology and coverage of the orders and requirements, please see the CHRP Reclassification Report dated December 30, 2013, as prepared by Dr. Patrick Sullivan for Carson Hill Rock Products.
Oro East has commenced its due diligence on the mining property and assess the feasibility of future gold exploration of the WRDs, certain mining claims, at Carson Hill and begin the process of obtaining mining permits to mine gold from the WRDs. Technicians for Oro East will help the company ascertain a clear determination for a WRD mine development plan. At present, the proposal is for small-scale mining of the WRDs.
Disclaimer about forward-looking statements. This news release includes “forward-looking statements” as that term within the meaning of securities laws of applicable jurisdictions. Forward-looking statements involve known and unknown risks, uncertainties and other factors that are in some cases beyond the control of Oro East. These forward- looking statements include, but are not limited to, all statements other than statements of historical facts contained in this news release, including, without limitation, those regarding future expectations of Oro East. Readers can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “risk,” “should,” “will” or “would” and other similar expressions. Risks, uncertainties and other factors may cause Oro East’s actual results, performance, production or achievements to differ materially from those expressed or implied by the forward-looking statements (and from past results, performance or achievements). These factors include the failure to complete and commission the mine facilities, processing plant and related infrastructure in the time frame and within estimated costs currently planned; variations in global demand and price for molybdenum and copper; fluctuations in exchange rates between the U.S. dollar and the Philippine peso; failure to recover the resource and reserve estimates of the Project; the failure of Oro East’s suppliers and service providers to fulfill their obligations under construction, supply and tolling agreements; unforeseen geological, physical or meteorological conditions, natural disasters or cyclones; changes in the regulatory environment, industrial disputes, labor shortages, political and other factors; the inability to obtain additional financing, if required, on commercially suitable terms; and global and regional economic conditions. Readers are cautioned not to place undue reliance on forward-looking statements.