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Winter/Spring 2020
Dear Shareholders:
On behalf of the Board of Directors, I am pleased to
update you on the Business Plan for El Niņo Ventures,
its progress to date, in 2019, and our Goals and
Objectives for the balance of this year and beyond.
El Niņo Ventures Inc. is an Exploration Company, who for
the last 9 years has focused on Exploration for Zinc,
Lead, Copper and Silver, and gold on the East Coast of
Canada. The Board of Directors has recently agreed to
Management's request to look at diversifying the Company
into other areas within the resource sector and the
possibility of new acquisitions beyond the resource
sector. To that end, the Company plans to add to its
director base and form an advisory committee with
individuals that have diversified backgrounds in
multiple industries including mining, oil and gas,
alternative energy, diversified industrial projects,
real estate, technology, alternative medicine and
communications. |
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Harry Barr
Chairman & CEO |
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The Company decided to sell, by way of option, the
Company's Minority Interest, in our Joint Venture, with
Votorantim Metals Canada Inc., more specifically our
interest in the Murray Brook Polymetallic Project.
By mutual agreement on May 10, 2017 and amended on
April, 2019 and again July 8, 2019, El Niņo Ventures
Inc. and Puma Exploration Inc. ("Puma") agreed to modify
the original payment terms of their asset purchase
agreement. Thus, the initial payment to El Niņo was
modified to a cash payment of an aggregate of $300,000,
which includes a non-refundable deposit, the issuance of
five (5) million Puma shares at the deemed value of
seven cents, and the issuance of two (2) million share
purchase warrants. The warrants issued are exercisable
until May 4, 2020 at a price of C$0.07 in year one,
C$0.08 in year two and $0.10 in year three. In 2018 the
company was paid an additional C$1.5 million dollars as
a second payment towards an end price of C$3.1 million.
In April 2019 the company received an additional one
million shares of Puma for the April 2019 amended
agreement.
The final payment due to El Niņo of one (1) million
dollars will now become due on or before June 30, 2020.
Subject to this payment being made, El Niņo will have
received a total value of C$3.1 million dollars
excluding valuations for shares and additional option
payments for the sale of its 32.14% interest in the
Murray Brook Project. As agreed in the July 8th
amendment, Puma will also pay to ELN an extra C$120,000.
In December, 2019, ELN agreed to accept Puma's offer to
issue 1M shares to El Nino at a deemed price of $0.12
and issue 500,000 warrants, valid for 3 years, at an
exercise price of $0.25 in consideration for the total
additional cash fees stipulated in the July 8th 2019
amendment in lieu of the total C$120, 000 payment.
In the event that Puma does not proceed with the final
$1,000,000 payment before June 30, 2020, a 0.67% royalty
(NSR) on the Murray Brook Project will be granted to ELN
under the same terms as the existing royalty in the
Purchase Agreement or, at the option of Puma and subject
to prior approval of the TSX Venture Exchange, Puma will
issue to ELN 1.5 million shares of Puma.
As part of the original agreement dated May 10, 2017 El
Niņo will also receive a laddered Net Smelter Return on
Production (NSR), starting at 0.50%, at a Zinc price of
US$1.04/lb. and increasing, in increments of 0.25%, to a
maximum of 1.75% above US$1.50/lb. Zn, in relation to
32.14% of the production from the Murray Brook Property,
which includes the Mining Lease and the Camel Back
Claims, for the life of the Murray Brook Deposit and any
new discovery made on the total project. As of July 8th,
2019 the price of zinc was US$1.08 per pound.
In the event that PUMA does not make the final payment
to ELN in regards to the asset purchase agreement, El
Nino will retain its full interest in the Murray Brook
Project.
The funds from the sale of ELN's Murray Brook
interest will amount to a Non-Dilutive Financing for the
Company and Management plans to use these funds to
acquire new projects and will continue to search for
high quality new projects and also look at diversifying
the company.
COMMENTARY
The Junior Exploration sector, which suffered
considerably, over the last nine (9) years, appears to
have reached its bottom. Metal Prices have increased
considerably and although both metals prices and junior
companies share prices have been volatile, a vast number
of savvy investors, industry analysts and mine
investment companies feel demand for metals is expected
to increase over the next few years due to world wide
demand, and increased commerce on an international
scale.
ELN Management and Directors continue to work diligently
on acquiring financing for the Company and our Projects.
Our January 2020 cash balance is approximately C$1.15
million with no debt in addition to 1 million puma
shares plus 500,000 Puma Warrants, exercisable at C$0.25
until December 2022 plus $1 million receivable by June
30, 2020. We look forward to continuing to provide you
with updates on our go-forward plan for the balance of
our activities in 2020 and beyond. On behalf of the
Board of Directors, we thank you for your ongoing
support.
For further information on your Company, please visit:
www.elninoventures.com
Opt-In on the website, to receive continued updates on ELN.
On behalf of the Board of Directors,
Yours sincerely,
"Harry Barr'"
Harry Barr
Chairman & CEO
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