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 Borate Project in Serbia (“Piskanja”). Under the 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:

  1. The InvestCo will be granted an 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;
  2. 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 approvals to exploit and mine Piskanja; and
  3. Subject to completion of Option 1, InvestCo, in its capacity as an 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:

  • 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 issuing an extension to the current Piskanja exploration license, which is due for renewal by July 11, 2018;
  • 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 close 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 shares on the TSXV, or the closing price on the day notice is given;
  • 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, if InvestCo’s equity ownership falls below 40% at any point, then InvestCo’s board nomination rights shall be reduced proportionally;
  • 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;
  • Upon exercise of Option 1, Erin shall reimburse InvestCo for all verified transaction closing costs associated with the transaction to a maximum of USD $300,000;
  • 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;
  • 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 reputable 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 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.
  • Option 2 allows InvestCo the right, for USD $15 million, to purchase an additional 24% equity stake in Balkan Gold; and
  • 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 Erin Ventures Inc.
Erin Ventures Inc. is an international mineral exploration and development company with boron assets in Serbia and gold assets in North America. Headquartered in Victoria, B.C., Canada, Erin shares are traded on the TSX Venture Exchange under the symbol “EV”. For detailed information please see the Erin website at www.erinventures.com or the Company filed documents at www.sedar.com.

For further information, please contact:
Erin Ventures Inc. Canada
Blake Fallis, General Manager TSX Venture: EV
Phone: 1-250- 384-1999 or 1-888-289-3746 USA
www.erinventures.com
645 Fort Street, Suite 203
Victoria, BC V8W 1G2
Canada

Erin Public Quotations:
Canada
TSX Venture: EV
USA
SEC 12G3-2(B) #82-4432
OTCBB: ERVFF
Europe
Berlin Stock Exchange: 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:
This press release may contain or refer to forward-looking information under Canadian securities legislation, including statements regarding the timing of future mineral resource estimates and the PEA, estimation of mineral resources, exploration results, potential mineralization, exploration and mine development plans, timing of the commencement of operations and future production and is based on current expectations that involve a number of business risks and uncertainties. The words “believe,” “expect,” “feel,” “plan,” “anticipate,” “project,” “could,” “should” and other similar expressions generally identify forward-looking statements. Forward-looking statements are subject to significant risks and uncertainties, and other factors that could cause actual results to differ materially from expected results. Readers should not place undue reliance on forward-looking statements. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to, failure to convert estimated mineral resources to reserves, capital and operating costs varying significantly from estimates, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, political risks, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and the other risks involved in the mineral exploration and development industry, as well as those factors discussed in the section entitled “Risks of the Business” in the Company s most recent regulatory filings which are posted on SEDAR at www.sedar.com. These forward-looking statements are made as of the date hereof and the Company assumes no responsibility to update them or revise them to reflect new events or circumstances other than as required by applicable securities law. These and other factors made in public disclosures and filings by the Company should be considered carefully.

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 assume that all or any part of an inferred mineral resource is economically or legally mineable.