CuMoCo News Quarterly Q3-2013

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Welcome to the third quarterly newsletter from American CuMo Mining Corporation (CuMoCo). In this issue, we highlight the latest news from the Company and the CuMo Project—the largest, un-mined molybdenum deposit in the world.

 

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US$3 Million Debenture Funding

American CuMo Mining Corporation (CuMoCo) announced a US$3 million debenture funding by the sale of units, consisting of a convertible debenture and a common share purchase warrant.  The money will be used to advance the CuMo Project by producing an updated resource calculation, additional metallurgical studies, an improved economic analysis, continuing the environmental base line work, and for general working capital purposes.  Each convertible debenture will have a term of 5 years at an interest rate of 8.5% per annum (interest payable on a semi-annual basis) and is convertible into common shares of the Corporation.  Each warrant will entitle the holder to purchase one additional common share of the Corporation for a period of five years. CuMoCo has the right to buy back the convertible portion at any time while the subscriber keeps the warrant.

The conversion rate is at US$0.3333 per share and the warrant exercise price is US$0.40.  Both prices are at a significant premium to the current share price.

2013 Annual General Meeting and Director News
The 2013 Annual General Meeting of Shareholders will be held on Monday December 16, 2013 at 10 AM (PST).  The meeting will be held Bentall 5 Conference Room Lobby Level, 550 Burrard Street, Vancouver, BC. More details will be provided to shareholders in the near future.

Mr. Long Wang resigned as Executive Vice President of CuMoCo in September for business and personal reasons. He remains a director of the Company.

Legal and Other News

CuMoCo has commenced action for damages against Brian A. McClay, Kyle McClay, Bill Jefferies and 1330275 Ontario Limited (a private company controlled by Jefferies and Brian McClay). The claim arises from actions undertaken while they were in positions of management with fiduciary responsibilities to the CuMoCo shareholders. Details of the Notice of Civil Claim can be obtained from the BC Supreme Court Registry. Other activities and actions by the former management are being investigated and further proceedings may be forthcoming.

CuMoCo satisfactorily resolved the notice of claim filed by Sacre-Davey Engineering Inc. regarding unpaid invoices from the engineering firm not disclosed nor paid by previous management.

IEMR Resources Inc. has made its fourth of five scheduled payments regarding the Pine Tree property option agreement with CuMoCo.

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Supplemental Environmental Assessment

The Unites States Forest Service (USFS) has released its Supplemental Environmental Assessment (EA) and states that the CuMo Exploration Project can avoid or mitigate groundwater quality impacts by following proper procedures. The report, issued August 15, 2013, follows the USFS’s 2011 Decision Notice and Finding of No Significant Impact and will enable fulfillment of a federal judge’s order to carry out studies necessary for completion of the exploration phase of the CuMo Project’s large strategic metals asset in Idaho. The Supplemental EA study resulted from an August 2012 decision, by Federal District Court Judge Edward Lodge, in response to litigation filed by environmental groups challenging the USFS’s EA process and decision. While Judge Lodge affirmed the Forest Service process and denied four of the five claims in the litigation, the fifth claim regarding deficiencies in groundwater analysis was remanded to the USFS for further clarification. All ground disturbance work on the Project has been suspended since the August 2012 decision which directed USFS to perform additional environmental evaluation on groundwater issues within the area under review. This assessment has current analysis including on wildlife and plant resources within the study area.  In February 2013, the USFS determined to address Judge Lodge’s decision in a supplemental addendum to the original EA. The report clarifying groundwater assessment is the culmination of the efforts of the USFS and Enviroscientists (http://enviroincus.com), an independent third-party contractor that performed the work.

The release of the Supplemental EA is positive step in a transparent and ongoing public process. CuMoCo has demonstrated its commitment to a strong working relationship with the USFS and the communities of Idaho.   CuMoCo has been conducting scientific exploration of the CuMo Project since 2004 and relies on scientific methodology and best mining practices in every facet of research and development. The USFS EA studies should affirm that the CuMo Project can proceed with full and complete exploration, with little impact to the environment and a substantial positive impact on the economy.

The Boise County Board of County Commissioners and the Idaho Department of Commerce expressed support for the completion of the exploration phase of the CuMo Project in written comments submitted during the United States Forest Service (USFS) Supplemental Environmental Assessment (SEA) public comment process. Letters submitted to the USFS advocate for the advancement of Idaho CuMo Mining Corporation’s study of the Boise County, Idaho molybdenum deposit.  Public meetings in August and September, hosted by the USFS, allowed community members to learn more about the current SEA and to submit comments regarding the CuMo Exploration Project. After attending the open houses in Southwest Idaho, Boise County Commissioners (Chair Barbara Belding and Commissioners Jamie Anderson and Vicki Wilkins) submitted a letter in support of the Project, noting “Many citizens of Boise County expressed their desire to return to a natural resource based economy, therefore allowing the exploration of the CuMo Project is encouraged. Boise County wants to find the best solutions for all of our citizens.”

The USFS public comment period regarding the SEA concluded on September 18, 2013. USFS is reviewing the submitted comments and will address any substantive issues raised before releasing the final report. CuMo Project leaders will continue to work with USFS to support the agency’s completion of the SEA process. The company believes the SEA should be approved and exploration activities resumed.

To review and comment on the USFS Supplemental EA, and to see letters of support from Boise County Commissioners and Idaho Department of Commerce, please go to  www.CuMoProject.com

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The Idaho World Profile

The Idaho World reported on October 16 that increasing demand for Molybdenum is the perfect time for the CuMo Exploration Project to get formal Exploration Assessment approvals. Please click to view PDF of article.

We are optimistic of consummating a financing deal for the CuMo Project with interested parties from North American, Europe, Japan and China over the next few months. Investor interest for the debentures has been very encouraging. Thank you for your continued interest and support of CuMoCo and the CuMo Project. We look forward to continuing to provide you with corporate updates and news.

Thank you for your continued interest and support of CuMoCo and the CuMo Project. We look forward to continuing to provide you with corporate updates and news.

Sincerely,
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Shaun Dykes M. Sc. (Eng.), P.Geo

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