CNS Contagious Gaming Inc

VANCOUVER, British Columbia, Oct. 13 /CNW/ -- Canoro Resources Ltd. (the "Company") (TSXV: CNS) provides the following update with respect to recent events relating to its Amguri project and other matters in order to provide further detail to its prior disclosures as required by the TSX Venture Exchange. Amguri Production Sharing Contract On June 1, 2010, the Company received a Show Cause Notice (the "Notice") from the Government of India Ministry of Petroleum and Natural Gas (the "MOPNG") alleging that the Company had violated certain provisions of the Amguri production sharing contract (the "Amguri PSC") as a result of the transactions contemplated under the investment agreement between the Company and Mass Financial Corp. dated April 16, 2010 (the "Transaction"). The MOPNG alleged that the Transaction required their prior consent under Article 29 of the Amguri PSC. As set out in the Company's news release dated June 11, 2010, shortly after receiving the Notice, the Company responded to the MOPNG with a detailed submission that supported the Company's view that both the facts of the situation as well as the language of the Amguri PSC were not consistent with the position of the MOPNG set out in the Notice. For further information respecting the Notice please refer to the Company's press release dated June 7, 2010, which includes excerpts therefrom. On August 14, 2010, the Company served notice on the MOPNG referring the matter of whether the Company violated the Amguri PSC, amongst other things, to an arbitration tribunal pursuant to the terms of the Amguri PSC. Both the Company and the MOPNG have appointed a member to the arbitration panel pursuant to the terms of the Amguri PSC and are awaiting the appointment of a third arbitrator by the current members of panel. Accordingly, arbitration proceedings have not yet commenced. On August 30, 2010, the Company announced that the MOPNG had provided the Company notice that it was terminating the Amguri PSC. Such notice was received by the Company after be the close of markets on Friday, August 27, 2010 and stated that the 90-day period required to given by the MOPNG in relation to its purported termination commenced on June 1, 2010 when the Notice was provided to the Company. This communication was the first time that the MOPNG had claimed that it considered the Notice to also be the notice of termination and accordingly the 90-day notice period would run from the date of its June 1, 2010 Notice. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy and accuracy of the contents of this news release. In its press release dated August 31, 2010, the Company announced that it had obtained an ad interim injunction from the High Court of Delhi prohibiting termination of the Amguri PSC. The ad interim injunction is effective until November 2, 2010, being the date of the next scheduled hearing of the matter and provides for the status quo operation of the project until such time. The question of whether the Company is in breach of the Amguri PSC remains subject to determination by an arbitration tribunal. The Company and its local counsels believe that, the notice of termination of the Amguri PSC is contrary to the terms of the Amguri PSC. As set out in the Company's Management's Discussion and Analysis for the period ended June 30, 2010 (the "Q1 MD&A"), the Company's Amguri project is carried on its balance sheet as at June 30, 2010 at a value of approximately $46 million, with the total assets of the Company being $94.3 million as at such date. A termination of the Amguri PSC may result in the Company losing all or a substantial portion of its investment in the Amguri project, and would have a material adverse effect on the results of operations and financial position of the Company. For further information, please refer to the Company's Q1 MD&A, a copy of which is available under the Company's profile on SEDAR (www.sedar.com). In the event of such loss, the Company believes it would have a legal claim against the MOPNG relating to the loss of its investment. However, there can be no assurance as to whether such claim would ultimately be successful or the amount that may be recoverable. Amguri Joint Operating Agreement On May 6, 2010, the Company was served in Delhi, India with notice of a petition by Assam Company India Ltd. ("Assamco"), the Company's 40% joint venture partner in the Amguri field, to appear in the High Court of Delhi pertaining to a petition under section 9 of the Arbitration and Conciliation Act, 1996 (the "Petition"). In the Petition, Assamco claimed that the Company violated the Amguri PSC and Joint Operating Agreement ("JOA") as a result of the Transaction and sought injunctive relief from the Court in relation to the Transaction. The Company appeared before the Court on May 18 and August 17, 2010 in response to various applications for injunctive relief sought by Assamco regarding the matters raised in the Petition, at both of which times the Court did not grant such relief. However, the Court did pass a lis pendens order which put third parties on notice that the matter is subject to challenge and an ultimate finding by an arbitration tribunal. On August 19, 2010, the Company received notice from Assamco referring the various disputes between the parties respecting the Amguri JOA to arbitration, pursuant to the terms thereof. Both Assamco and the Company have appointed a member to the arbitration panel pursuant to the terms of the Amguri JOA and are awaiting the appointment of a third arbitrator by the current members of the panel. Accordingly, the arbitration proceedings have not yet commenced. The question of whether the Company is in breach of the JOA and PSC remains subject to determination by an arbitration tribunal. The potential implications of these arbitration proceedings are not known at this time. On May 17, 2010, the Corporation filed a Statement of Claim (as amended) in the Court of Queen's Bench, Alberta against Assamco for damages of $200,000 and punitive damages of $1,000,000 such that the aggregate claim is in the amount of $1,200,000 plus solicitor client costs (the "Claim"). The Claim asserts that Assamco has repeatedly interfered with the Company's contractual relations, including interference in the Transaction, and has made defamatory statements against the Company. Assamco has sought an order from the High Court of Delhi to restrain the Company from continuing the proceedings in Canada on jurisdictional grounds. The Company through its counsel in India has agreed to not object to any extension of time for submission of a statement of defence, which Assamco may seek in connection with this litigation, while the High Court of Delhi is hearing arguments from counsel in the matter. The next hearing before the High Court of Delhi is scheduled for November 15, 2010. AA-ONN-2003/2 Bank Guarantees On May 7, 2010, the Company was informed that the Government of India had called a bank guarantee of approximately $1.1 million that had been provided relating to the AA-ONN-2003/2 exploration block for failure of the operator and partners to complete the minimum work commitment. Export Development Canada ("EDC") had provided a counter guarantee for the entire amount and accordingly, on May 20, 2010, reimbursed the Company's bank. On July 9, 2010 the Company repaid EDC. For further information please refer to the Q1 MD&A. For further information, please contact: Rene Randall Tel: 604-408-8538 Email rrandall@bmgmt.com or visit the Company's website at www.canoro.com Rene Randall, +1-604-408-8538, rrandall@bmgmt.com Web Site: http://www.canoro.com

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