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TORONTO, Sept. 24, 2012 /CNW/ - Vena Resources Inc. ("Vena" or the "Company") (TSX: VEM, LIMA: VEM, Frankfurt: V1R, OTC-BB: VNARF, Xetra®: V1R.DE), announces that its 70% owned subsidiary, Azulcocha Mining S.A. ("Azulcocha") has been working with Trafigura Beheer B.V. to restructure its shareholding and respond to a notice of default received from Trafigura Beheer B.V. and Consorcio Minero S.A., Trafigura's Peruvian subsidiary (collectively, "Trafigura").
As disclosed in the Company's most recent Management's Discussion and Analysis and Financial Statements for the second quarter ended June 30, 2012, Azulcocha was behind in one loan payment and the Company is now in default in loan payments aggregating US$3,199,332, together with interest in connection with loans made by Trafigura to Azulcocha to complete the construction of the now fully permitted 500 tpd mill. Trafigura has notified Azulcocha that it is in default of its payment obligations and has demanded payment of the overdue amounts and stated that it may take legal action against Azulcocha if payment is not made.
Over the last two months, Azulcocha and Trafigura have had ongoing discussions regarding these liabilities, including discussions that would provide for the sale of Vena's 70% ownership of Azulcocha to Trafigura. The Company's board of directors created a special committee of independent (non-management) directors to evaluate a proposal made by Trafigura and continues to work on details to finalize a potential share purchase agreement that would settle all unpaid amounts that are due and payable by Azulcocha to Trafigura while amending its existing agreements. As part of this process, Vena and Trafigura also agreed to allow interested third parties to evaluate Azulcocha as a potential purchase. The Company is working at finalizing a binding agreement in the near term and is actively discussing and seeking other potential transactions, and is continuing to use every effort to reduce or delay expenditures, seek additional capital, and / or restructure or refinance its indebtedness.
The TSX does not accept the responsibility for the adequacy or accuracy of this release.
Forward Looking Statements -The forward-looking statements included in this press release are based on certain key expectations and assumptions made by Vena. Although Vena believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Vena can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. In addition to other risks that may affect the forward-looking statements in this press release are those set out in Vena's management discussion and analysis of the financial condition and results of operations for the year ended December 31, 2011 and the six month period ended June 30, 2012 as well as the Company's Annual Information Form. The forward-looking statements contained in this press release are made as of the date hereof and Vena undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
SOURCE Vena Resources Inc.