Erin Ventures Enters Strategic Partnership to Advance Its Boron Project
ERIN VENTURES INC. (“Erin”)
NEWS RELEASE
Erin Ventures Enters Strategic Partnership to Advance Its Boron Project
June 18, 2018
Erin Ventures Inc. [TSXV: EV] is pleased to announce that it has entered into a strategic partnership option
agreement (the “Agreement”) with a London based commodity investment specialist ( the “InvestCo”), for the
continuing development of Erin’s Piskanja Bor ate Project in Serbia (“Piskanja”). Under t he terms of the
Agreement, the InvestCo has the right to make equity investments in two tranches, totaling USD $20.135 million,
with the proceeds to be used for the advancement of Piskanja towards production , subject to TSX Venture
Exchange and shareholder approval.
The InvestCo is currently engaged as an integral part of the initial public offering (IPO) process of a substantial
mining complex. Due to the sensitive nature and timing of this listing process, Erin is unable to divulge the
InvestCo’s identity at this time. A description of the InvestCo operations is found below. InvestCo’s identity will
be released by way of, (i) a news release from Erin if, as and when InvestCo notifies Erin that there is no longer a
process requiring InvestCo to remain confidential, and/or (ii) in an Information Circular to Erin’s shareholders as
a part of the approval process if, as and when the InvestCo notifies Erin of its intent to exercise its Tranche 1
option, as described below.
Piskanja is Erin’s wholly-owned high -grade boron deposit with an indicated mineral resource of 7.8 million
tonnes (averaging 31 per cent B2O3), and an inferred resource of 3.4 million tonnes (averaging 28.6 per cent
B2O3), calculated in accordance with the Canadian Institute of Mining Definition Standards on Mineral
Resources and Reserves (CIM Standards) as disclosed in Erin’s report titled, “Mineral Resource Estimate Update
On The Piskanja Borate Project, Serbia, October 2016” which is filed on SEDAR.
“I am very excited by this development,” said Tim Daniels, President of Erin Ventures. “This agreement provides
an opportunity to significantly grow our shareholders’ value by creating a funding plan which matches our
development milestones, allowing for the rapid advancement of our boron project, first to a feasibility study stage,
and then into mine development and construction. In addition, we are building a formidable team that combines
Erin’s mineral exploration and mine development expertise and extensive knowledge of Serbia, with InvestCo’s
marketing, logistics and finance expertise as an experienced global commodity trader that specializes in complex,
niche commodities.”
The Agreement contains three principal commercial elements:
One – The InvestCo will be granted a n initial purchase option exercisable for USD $5.135 million to acquire
EITHER: (i) an equity interest in Erin’s wholly owned subsidiary, Balkan Gold d.o.o. (“ Balkan Gold”), which
holds all of Erin’s rights in Piskanja ; OR (ii) equity in Erin, based upon a fixed pricing formula further described
below (“Option 1”). In either case, the proceeds are to be used exclusively to fund a pre-agreed work program at
Piskanja designed to advance the project to a definitive feasibility study stage, as well as all permitting activities
through to obtaining the requisite licenses, and approvals to exploit and mine Piskanja;
Two - Subject to completion of Option 1, InvestCo will be granted a second purchase option to acquire USD $15
million worth of equity in Balkan Gold (“ Option 2”). The proceeds from Option 2 are to be designated for mine
development and construction costs at Piskanja upon receipt of requisite licenses, and appr ovals to exploit and
mine Piskanja; and
Three – Subject to completion of Option 1, InvestCo, in its capacity as a n experienced global commodity
marketing and trading company, will provide its marketing and advisory expertise to Balkan Gold for the future
sale of all borate production at Piskanja for a 3-year period.
The salient terms in the Agreement are as follows:
(i) The InvestCo shall be granted Option 1 with an exercise period commencing immediately and expiring
within 90 days of the Republic of Serbia Ministry of Mining and Energy issu ing an extension to the
current Piskanja exploration license, which is due for renewal by July 11, 2018;
(ii) Option 1 grants InvestCo the right, for USD $5.135 million, to purchase EITHER: ( A) 51% of the share
capital of Balkan Gold at the date the Option is exercised; OR ( B) USD $5,135,000.00 of common shares
in Erin. Each share to be priced at the maximum discount permissible under the policies of the TSXV,
subject to: the price being fixed at the cl ose of trading (Toronto time) on the day which InvestCo gives
written notice to Erin of its intent to exercise this option, with the price to be pegged as the higher of
either the volume weighted 20 previous trading -day average trading price of Erin’s shar es on the TSXV,
or the closing price on the day notice is given;
(iii) Upon exercise of Option 1 into equity of Balkan Gold , the InvestCo will be granted majority
representation on the board of directors of Balkan Gold, or alternatively, upon exercise of Option 1 into
equity of Erin, InvestCo will be granted the right to nominate a majority of the board of directors of
Balkan Gold and Erin . Under either scenario, i f InvestCo’s equity ownership falls below 40% at any
point, then InvestCo’s board nomination rights shall be reduced proportionally;
(iv) The use of proceeds of Option 1 will be used solely to fund development and permitting activities of
Piskanja through to obtaining all the necessary licenses, permits, and approvals to exploit and mine the
Piskanja Borate Project. This will include funding a pre -agreed work program to extend the Piskanja
Borate Project exploration license, and to fund the Piskanja Borate Project definitive feasibility study,
including the funding of the general and administrative costs of Erin, and Balkan Gold, that directly relate
to the Piskanja Borate Project only;
(v) Upon exercise of Option 1, Erin shall reimburse InvestCo for a ll verified transaction closing costs
associated with the transaction to a maximum of USD $300,000;
(vi) Upon exercise of Option 1, Erin and Balkan Gold shall grant InvestCo with sole marketing rights to all
products produced from the Piskanja Boron Project, or any future borate project developed by Balkan
Gold. The marketing agreement shall be valid through to the third anniversary of commissioning of
Piskanja. The InvestCo will be paid one (1) percent of the invoice amount as a marketing fee, and
reimbursed for pre-agreed costs;
(vii) Subject to completion of Option 1, InvestCo shall be granted Option 2 with an exercise period starting
immediately and expiring the earlier of: A) ninety (90) days after (i) the date on which Erin receives all
the necessary licenses, permits, and approvals required for the development and exploitation of the
Piskanja Borate Project, including but not limited to the issuance of the exploitation license in accordance
with mining law official gazette 101/2015, the approval of mining works , and the approval of the
definitive feasibility study of the Piskanja Borate Project by the Republic of Serbia Ministry of Mining
and Energy; and (ii) the date on which an expression of interest is obtained from a rep utable financial
institution, or reputable offtaker, for the financing of the debt portion of construction capex associated
with the Piskanja Borate Project; OR B) one hundred and fifty (150) days after the date on which the
Company receives all the necess ary licenses, permits, and approvals required for the development and
exploitation of the Piskanja Borate Project, including but not limited to the issuance of the exploitation
license in accordance with mining law official gazette 101/2015, the approval o f mining works; and the
approval of the definitive feasibility study of the Piskanja Borate Project by the Republic of Serbia
Ministry of Mining and Energy.
(viii) Option 2 allows InvestCo the right, for USD $15 million , to purchase an additional 24% equity stake in
Balkan Gold; and
(ix) The proceeds from the exercise of Option 2 shall be used exclusively to fund future Piskanja mine design,
development and construction costs based upon results derived from the definitive feasibility study, mine
plans and other studies that formed the basis for the granting of the exploitation license by the Serbian
authorities.
The Agreement is subject to TSX Venture Exchange, and shareholder approvals.
On behalf of the Board of Directors,
Blake Fallis, General Manager
About the InvestCo
InvestCo was established in 2009 by the senior management team from one of the world's largest energy
commodity trading companies. Its mandate since inception has been to invest in upstream mining projects,
leveraging the founders' extensive commodity networks and decades of experience.
InvestCo takes a differentiated approach to engaging with project teams. In addition to providing capital to early
stage mining projects, the InvestCo team seek s to work with management by providing marketing, hedging and
structuring expertise gained over 20 years of commodity trading know-how across multiple markets.
InvestCo has a strong track record of leverage it’s debt and equity network, in order to bring mining projects into
production. Its team has work ed with a number of alternative funding partners including sovereign wealth funds,
family offices and hedge funds, accessing new sources of capital as an alternative to traditional capital markets.
About Erin Ventures
Erin Ventures Inc. is an international mineral exploration and development company with boron assets in Serbia.
Headquartered in Victoria, B.C., Canada, Erin's shares are traded on the TSX Venture Exchange under the symbol
"EV". For detailed information pl ease see Erin's website at www.erinventures.com or the Company's filed
documents at www.sedar.com.
For further information, please contact: Erin’s Public Quotations
Erin Ventures Inc. Canada USA
Blake Fallis, General Manager TSX Venture: EV SEC12G3-2(B)#82-4432
Phone: 1-250- 384-1999 or 1-888-289-3746 OTCBB:ERVFF
[email protected] Europe
www.erinventures.com Berlin: EKV
The technical information in this release was prepared and approved by James E Wallis, M.Sc. (Eng), P.
Eng., a director of the company, who is a Qualified Person under National Instrument 43-101.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Statements:
Certain statements in this news release may constitute forward -looking statements within the meaning of applicable securities
laws. Forward-looking statements include, but are not limited to, statements concerning (i) the Agreement, (ii) Option 1; (iii)
Option 2; (iii) anticipated approvals; (iv) the time to the exercise of Option 1 and Option 2 ; and (v) results of the completion
of the transactions contemplated in this news release . Forward -looking statements generally can be identified by the use of
forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate",
"believe", "sho uld", "plans" or "continue", or similar expressions suggesting future outcomes or events. Such forward -
looking statements reflect management's current beliefs and are based on information currently available to management.
Forward-looking statements involv e risks and uncertainties that could cause actual results to differ materially from those
contemplated by such statements. Such forward -looking statements are subject to risks and uncertainties that may cause
actual results, performance or developments to differ materially from those contained in the statements including, without
limitation, the risks that: (1) the information provided to Erin by InvestCo turns out to be misleading , untrue or incomplete;
(2) neither Option 1 nor Option 2 may be completed fo r any reason whatsoever, including that regulators may not approve
the proposed Options; (3) the closings may not occur as scheduled or at all; and (4) Erin may not achieve the results currently
anticipated. Although Erin believes that the expectations ref lected in its forward -looking information are reasonable, undue
reliance should not be placed on forward -looking information because Erin can give no assurance that such expectations will
prove to be correct. In addition to other factors and assumptions wh ich may be identified in this news release, assumptions
have been made regarding and are implicit in, among other things, the timely receipt of required regulatory approvals. Detail s
of the risk factors relating to Erin and its business are discussed under the heading “Risks and Uncertainties” in Erin’s most
recent regulatory filings which are posted on SEDAR at www.sedar.com. Readers are cautioned that the foregoing list is not
exhaustive of all factors and assumptions which have been used. Forward -looking information is based on current
expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to
differ materially from those anticipated by Erin and described in the forward looking information. The forward -looking
information contained in this news release is made as of the date hereof and Erin undertakes no obligation to update publicly
or revise any forward-looking information, whether as a result of new information, future events or otherwise , unless required
by applicable securities laws. The forward-looking information contained in this news release is expressly qualified by this
cautionary statement.
Mineral resources are not mineral reserves and do not have demonstrated economic viability. "Inferred Resources" have a
great amount of uncertainty as to their existence, and economic and legal feasibility. Investors are cautioned not to assume
that all or any part of an inferred mineral resource reported in this news release will ever be upgraded to a higher category or
to reserves. U.S. persons are advised that while mineral resources are recognized under Canadian regulations, the U.S.
Securities and Exchange Commission does not recognize them. U.S. persons are also cautioned not to a ssume that all or any
part of an inferred mineral resource is economically or legally mineable.