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Cabo announces signing of letter of intent and mailout of supplementary information circular and valuation and fairness opinion

North Vancouver, BC - Cabo Mining Enterprises Corp. (TSX-V:CBE) (“Cabo” or the “Company”) is pleased to announce the signing of a Letter of Intent with respect to the proposed sale of all of the Company’s mineral property interests (the “Properties”) to International Millennium Mining Corp.

(“IMMC”) (the “Transaction”). Pursuant to the Transaction, the Company proposes to transfer all of its Properties to IMMC in exchange for 10,000,000 units of IMMC, each unit consisting of one IMMC common share and one-third of a warrant, each full warrant entitling the holder to purchase one share in the capital stock of IMMC for thirty-five cents for a period of two years following the date of issue. The Company will subsequently redistribute no less than seventy-five percent of the Units to its Shareholders on a ratio of one IMMC unit for each four shares of the Company that they will hold on a record date to be determined. The net effect will be that Shareholders will continue to hold their shares of the Company and receive units in the capital of IMMC.

The Transaction is subject to a number of conditions including:

  1. the Company’s Shareholders approving this Transaction;
  2. IMMC’s Board acceptance of the Transaction;
  3. the TSX Venture Exchange accepting the Company’s sale of the Properties to IMMC;
  4. IMMC completing a private placement financing of no less than $2,500,000 of which no less than $1,000,000 would be expended on the Properties;
  5. IMMC acquiring a TSX Venture Exchange listing; and
  6. IMMC Shareholders approving the Transaction.

 

The Transaction will only close upon satisfaction of the above conditions precedent, at which time Units of IMMC will be issued to the Company and redistributed to the Shareholders. A four month hold period will apply to the IMMC shares redistributed to the Shareholders as per the formula detailed above.

At the annual general meeting of shareholders held December 15, 2005, the matter regarding the Transaction was adjourned. The adjourned Annual General and Special Meeting of the Shareholders is to be held on January 23, 2006 at 10:00am. This matter was adjourned to allow the Company time to attain a final valuation of the Company’s mineral properties, and a fairness opinion regarding the offer received from IMMC. The Company is in the process of mailing out its Supplementary Information Circular along with the Valuation and Fairness Opinion, provided by Northern Securities Inc. The Opinion states, under the heading “Fairness Conclusion: that: “Based upon and subject to the foregoing, Northern is of the opinion, as of the date hereof December 22, 2005 that the consideration to be received in respect of the Transaction by Cabo is fair from a financial point of view to the holders of the common shares of Cabo.

For a complete description of the proposed Transaction, the Company’s agreement with IMMC, income tax considerations, and related matters, please refer to the Company’s November Circular and the Supplementary Information Circular available on the Company’s website www.cabo.ca and SEDAR
www.sedar.com.

Cabo Mining Enterprises Corp. is a drilling services company headquartered in North Vancouver, British Columbia, Canada. The Company provides services through its subsidiaries Advanced Drilling Ltd. of Surrey, British Columbia; Forages Cabo Inc. of Montréal, Quebec; Heath & Sherwood Drilling (1986) Inc., of Kirkland Lake, Ontario; and Petro Drilling Company Limited of Springdale, Newfoundland. Cabo also holds interests in mineral exploration properties located near Cobalt, Kenora and Sudbury, Ontario, Canada. The Company’s common shares trade on the TSX Venture Exchange under the symbol: CBE.

 

ON BEHALF OF THE BOARD

(signed “John A. Versfelt”)


John A. Versfelt


Chairman, President and CEO Further information about the Company can be found on the Cabo website (http://www.cabo.ca) and SEDAR (www.sedar.com) or by contacting Investor Relations Ms. Sheri Barton at 403-217-5830 or Mr. John A. Versfelt, Chairman, President & CEO of the Company at 604-984-8894.


* * * *

The Exchange has not in any way passed upon the merits of this news release. This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, potential mineral recovery processes and other business transactions timing. Forward-looking statements address
future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.


Last Updated: 12/28/2005