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Americas Petrogas Doubles Vaca Mahuida Block Interest

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   |    Tuesday,May 31,2016

Americas Petrogas Inc. has announced its first quarter 2016 results.

All amounts are in Canadian dollars unless otherwise stated.


As at March 31, 2016, the Company had $44.4 million of consolidated cash and cash equivalents and had a positive consolidated working capital position of $56.1 million.

The decrease in working capital from December 31, 2015 ($62.6 million) to March 31, 2016 ($56.1 million) can be attributed primarily to (i) the acquisition of the remaining 30% interest in the Bayovar Property, which resulted in a cash payment, the recognition of a liability to the Peruvian Group and the transfer of a receivable from the Peruvian Group (which was included in other current assets at December 31, 2015) to exploration and evaluation assets; (ii) the impact on the Company's U.S. dollar denominated financial instruments of the weakening of the U.S. dollar relative to the Canadian dollar; and (iii) partially offset by the reclassification of some available-for-sale financial assets from non-current assets to current assets.


  • Further infill core drilling on Bayovar 7 and reconnaissance drilling on Bayovar 5 has been completed and lab analysis and geological evaluations are ongoing. The Company expects to have a further resource update in June 2016, which will incorporate the results of this additional drilling on the Bayovar concessions.
  • On February 16, 2016, the Company announced the engagement of WorleyParsons Services Pty Limited and Golder Associates Ltd. to undertake a Preliminary Economic Assessment (PEA) for the Bayovar 5 and Bayovar 7 concession blocks. In order to incorporate new drilling results on these two concessions and the expected June 2016 resource update into the PEA report, the Company now anticipates releasing the results of the PEA in Q3-2016.
  • Expansion of the pilot evaporation ponds for Carnallite/Kainite has been substantially completed and pilot testing is underway using the expanded ponds. Pending results of the pilot testing, the Company will assess its plans for future commercial production for Carnallite/Kainite.
  • Early in 2016, the Company's Peruvian subsidiary, APPSA, acquired the remaining 30% interest in the Bayovar Property from the Peruvian Group. Under the terms of the acquisition agreement, payments to be made to the Peruvian Group total US$8.0 million, payable over a period of time. An initial payment of US$0.5 million was paid upon signing the agreement and a further US$2.0 million is expected to be paid in June 2016.


The Company now holds a 50% working interest in Vaca Mahuida block, after having acquired, for no cost, an additional 25% interest from the former operator of the block. The Company is now the operator of this block and its other joint venture partner holds the remaining 50% interest. The Company is continuing to evaluate the economics relating to the Vaca Mahuida block and is planning to submit a new development plan to the Rio Negro provincial government in order to seek an exploitation concession on the block.


Abby Badwi Executive Chairman of Americas Petrogas stated: "For 2016, the Company will continue with its plans in Peru to expand its exploration and economic assessment activities of its phosphate deposits on the Bayovar blocks while also working towards achieving an initial amount of production of Carnallite/Kainite from the brine resources in the same area. As for Argentina, the Company will continue to pursue its various options to maximize value of its assets in the country. The recent development of increasing the Company's interest, assuming operatorship and trying to obtain an exploitation concession on the Vaca Mahuida block may enhance the opportunity to achieve this objective."

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