CMKM Diamonds, Inc. announces the completion of an agreement with
101047025 Saskatchewan Ltd. (“1010”). This agreement is part of an
overall settlement of a lawsuit brought by Entourage Mining Ltd.
(“Entourage”) against both CMKM and 1010 under Action No. 5075800 in the
Supreme Court of British Columbia (the “Entourage Lawsuit”). As a term
of the overall settlement, Entourage will consent to a dismissal of the
Entourage Lawsuit against both CMKM and 1010, as if it had been heard on
its merits and dismissed.
Under the overall settlement of the Entourage Lawsuit, 1010, CMKM, and
Entourage agreed to cancel and terminate the previous agreement between
CMKM, 1010, and Entourage that was dated October 20, 2005 (the “2005
Agreement”), with respect to certain mineral claims in Saskatchewan that
are owned by 1010. In consideration of that dismissal, CMKM will return
to Entourage 3 million of the 4.5 million Entourage shares that it
acquired under the original agreement, and Entourage has given up all
claims or rights to the remaining mineral claims, all of which are owned
by 1010. CMKM also returned the remaining 1.5 million shares back to
Entourage for a payment from Entourage of $85,000.
Under their new agreement, CMKM and 1010 will form a new company (“New
Corp.”) to explore the remaining mineral claims that were the subject
matter of the 2005 Agreement. These remaining claims have produced core
samples that were drilled by 1010 in late 2005 and early 2006 and have
yet to be tested. The New Corp. will, in turn, form a joint venture with
1010 to explore and develop the remaining mineral claims. 1010 will be
the sole Operator of the new joint venture and will continue to be the
sole owner of the remaining mineral claims. However, the New Corp. will
have the right to acquire those remaining claims owned by 1010 by
incurring expenditures for exploration, drilling and development on the
claims in a cumulative amount that will be no less than four million
dollars during the first five years. CMKM is solely responsible for
raising no less than 80% of these funds for the New Corp. and 1010 is
solely responsible for raising no less than the remaining 20% of these
funds for the New Corp.
1010 will hold total voting control of the New Corp. The authorized
capital of the New Corp. will consist of Class A voting common shares,
without any right to dividends or capital, except that the said Class A
common shares will, on a winding up or dissolution, be entitled to
repayment of capital paid therefore, and Class B non-voting common
shares, with rights to payment of dividends and capital. Eighty million
Class B common shares will be allotted and issued to CMKM. Twenty
million Class B common shares and ten thousand Class A common shares
will be allotted and issued to 1010. CMKM will thus be entitled to 80%
of profits earned by the New Corp.
CMKM Diamonds CEO Mark Faulk stated, “This joint venture agreement is
another step in our ongoing efforts to return viable assets to CMKM
Diamonds. Rights to the remaining claims were retained because they
showed the greatest potential for diamonds. Many shareholders originally
invested in CMKM because of this potential, and we believe it is in the
best interest of Company and its shareholders to pursue this opportunity
to benefit from any real value in the remaining claims. The New Corp.
intends to begin testing on existing core samples from the remaining
claims in the very near future.”
Safe Harbor Statement:
This news release contains certain "forward-looking statements" within
the meaning of Section 27a of the Securities Act of 1933 and Section 21e
of the Securities Exchange Act of 1934. Although the Company believes
the expectations reflected in such forward-looking statements are
reasonable, it can provide no assurance that actual results will meet or
exceed such expectations.
CMKM Diamonds Inc.
Mark Faulk, 903-262-8397
www.cmkmdiamondsinc.com
