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Wed Jul 2, 2008
Mindoro Acquires Remaining Interest In Batangas Projects And Resumes Joint Venture Negotiations
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EDMONTON, Alberta: July 2, 2008 - Mindoro Resources Ltd. (TSXV: MIO; Frankfurt: WKN 906167) is pleased to announce that, through its wholly owned subsidiary MRL Gold Phils., Inc., Mindoro has entered into a Letter of Intent with Egerton Gold Philippines, Inc. to acquire the remaining 49% direct and indirect interest in the company's Batangas Projects, located in southern Luzon, the Philippines, in exchange for eight million Mindoro shares. Mindoro previously had the right to earn up to a 75% interest in the Batangas Projects and was vested at 51%. The acquisition will result in Mindoro acquiring an immediate 100% direct and indirect interest in the Batangas Projects, as described in About the Acquisition, below, and opening the door for greater flexibility in structuring joint ventures; advanced stage negotiations have resumed with several companies.
Mindoro's target-rich Batangas tenements cover over 29,000 hectares in the well-mineralized southern Luzon porphyry copper-gold belt. Projects include Lobo and Archangel, where early-stage NI 43-101-compliant gold resources have been defined (SWB and Kay Tanda), which are both open to upgrading and extension, and at least fifteen promising porphyry copper-gold prospects, including the Calo, Talahib, Pica and El Paso prospects (see About the Batangas Prospects below).
Mindoro has been in advanced joint venture discussions since early 2008 with several parties who have expressed strong interest in funding and advancing the Batangas Projects. Acquisition of the residual Egerton interest frees up sufficient equity to attract substantial joint venture partners, and to leave Mindoro with a significant equity position at the feasibility stage.
"We are pleased to have acquired the remaining interest in this target-rich land package. In this resource-hungry world the Batangas Projects have attracted considerable interest, but negotiations with potential partners have been on hold for several months pending completion of the Egerton agreement," noted Tony Climie, CEO of Mindoro. "We can now proceed to consummate several joint venture deals that would allow multiple exploration and drilling programs to advance simultaneously in 2008."
ABOUT THE ACQUISITION
Under the terms of the Letter of Intent, Mindoro and Egerton will have 90 days to execute a formal agreement, whereupon, subject to regulatory approval, Mindoro will issue 500,000 shares to Egerton in exchange for an undivided 24% direct and indirect interest in the Batangas Projects. This would bring Mindoro's total direct and indirect interest in the Projects to 75%. For the remaining 25% indirect interest of Egerton in the Batangas Projects, Mindoro will issue a further 7,500,000 shares to Egerton. These shares would be subject to a hold period with 1,500,000 shares restricted from trading for six months, two million shares restricted for 12 months, two million restricted for 18 months and two million restricted for 24 months. Egerton would also receive a one time payment of US$1,000,000 at the start of production -- applicable to the first deposit to start production only, and will be granted a one percent net smelter royalty on all metals produced from the Batangas Projects.
ABOUT THE BATANGAS PROJECTS
The Batangas projects encompasses over 29,000 hectares in a recognized porphyry copper-gold belt. This belt includes the Taysan porphyry copper-gold deposit of Freeport-McMoRan, adjacent to the Batangas Projects, as well as the Dizon, Tapian, San Antonio, and Mogpog porphyry copper-gold deposits. The Batangas Projects includes the following prospects:
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PORPHYRY COPPER-GOLD (Cu-Au) PROSPECTS
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Pica
A 2 kilometer (km) by 1.5 km high chargeability anomaly with coincident resistivity and magnetic anomalies. Intensely altered andesitic volcanics and diorite intrusions. Drill hole Pica 2 confirmed porphyry Cu-Au system, intersecting significant mineralization (213 m @ 0.18% Cu, 0.30 g/t Au, 1.19 g/t Ag)
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Calumpang
Calumpang forms the northern extension of Pica. Strong, high chargeability anomaly over 700m by 600m, with coincident resistivity and magnetic anomalies. Intense argillic to advanced argillic-altered andesitic volcanics.
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Camo
Moderate chargeability anomaly, not yet closed off. Structurally-controlled phyllic alteration in andesitic volcanics associated with greater than 0.1% Cu mineralization in narrow zones of several m wide. Proximal high-sulphidation epithermal vein breccia mineralization and intrusive diorite dykes suggest a porphyry target at depth.
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Talon-Balibago
An 800m by 600m high chargeability anomaly with coincident resistivity anomaly; low mag anomaly also present (this is similar to the geophysical expression of the Taysan Porphyry Cu-Au Deposit). Strongly altered andesitic volcanics with multi-phase intrusive stocks. Two reconnaissance diamond drill holes 500m apart drilled in 2006. The holes intersected porphyry-related alteration that varies from argillic, sericite-clay-chlorite (SCC) overprinting propylitic alteration. Weak to moderate sulphides including pyrite, minor chalcopyrite, covellite, and bornite associated with galena and sphalerite. The holes bottomed at 500m-the rig's capacity.
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Kay Tanda
Associated with Kay Tanda are strong coinciding chargeability and resistivity anomalies. Intensely silicified volcanics [silica cap?] in places with mineralized, multi-phase intrusives at depth. Deeper drilling below the epithermal Au resource intersected porphyry-related phyllic alteration at depth and disseminated and veinlet chalcopyrite ± molybdenite mineralization, anhydrite and gypsum veining. An outcrop and boulders of potassic-altered diorite mapped immediately northwest of Pulang Lupa.
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Lumbangan
500m by 300m moderate to high chargeability anomaly with coincident resistivity anomaly. Strong phyllic overprinted by high temperature illite (PIMA) alteration with significant Cu, Au and Ag values in trenches. Alteration and mineralization suggest porphyry Cu-Au target at shallow depth.
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Marita-Agas
Marita- Agas is a 1km by 0.7km chargeability and resistivity anomalies with intense phyllic overprinted by argillic alteration. Strongly oxidized quartz- sulphides stockworks with significant Cu values from channel samples. PIMA analysis over outcrops in Marita shows illitic alteration with coinciding arcuate jarosite zone. Jarosite signifies weathering of sulphides and is commonly seen in porphyry systems. The intense alteration (showing zonation in places) and quartz veining, with coincident Cu showings within strong IP anomalies, suggest a porphyry system at shallow depths.
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Kalabasa-Bootin
High chargeability anomaly coincident with strong phyllic, argillic to advanced argillic alteration. Outcrops of silica cap and hydrothermal breccia pipe with pyrite-rich matrix. Channel samples from altered zone yielded significant Cu and Au values. Near-surface epithermal Au target with porphyry target interpreted at shallow depth.
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El-Paso Hill
Very favourable structural setting, 12km from Phelps Dodge Taysan Porphyry Cu-Au Deposit. Younger andesite porphyries intrude older San Juan hornblende quartz diorite and metavolcanic rocks. The younger intrusives form prominent topographic peaks, are phyllic-altered, and associated with weak to moderate chargeability anomalies. Extensive Cu mineralization associated with the andesite porphyry confirmed by trenching with over 10 trenches, many with lengths > 20m, gave excellent values in the range of up to 5.69% Cu, 1.02 g/t Au and 24.10 g/t Ag. Orientation soil geochemistry line has defined strong and extensive Cu-in-soil anomalies.
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Calantas
Strong chargeability anomaly defined over more than 1km by 500m; open to the east, and with coincident resistivity highs. Petrography confirmed porphyry Cu-related hydrothermal alteration, varying from quartz-sericite-chlorite to SCC affecting the younger medium-grained hornblende quartz diorite intrusive. This younger intrusive is believed to intrude the older San Juan hornblende quartz diorite and metavolcanic rocks. Quartz stringers ±bornite and magnetite stringers ±chalcopyrite are present in the younger intrusive. Within the metavolcanics, a +15-m long outcrop channel sample assayed 0.24% Cu, while a trench sample gave 0.14 g/t Au, 0.88 % Cu and 57 ppm Mo over 15 meters. Another 10-m long channel sample from an outcrop of the medium grained diorite gave 806 ppm molybdenum (Mo).
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Mulawin
Large, strong chargeability anomaly measuring approximately 1km by 2 km. Similar to Calantas, the area is underlain by altered medium-grained hornblende quartz diorite that believes to intrude the older San Juan hornblende quartz diorite and fine-grained metalvolcanics. The medium grained diorite is variably altered to quartz-chlorite-sericite-epidote (SCC) and more texture-destructive quartz-clay-sericite-pyrite (intermediate argillic) with associated fracture fill malachite and azurite (after sulphides), minor pyrite-chalcopyrite specks and locally occurring magnetite stringers/veinlets. Copper in soil gives up to 1000 ppm in places.
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Santol Hill
Partly covered by moderate chargeability anomaly. Surface mapping identified younger fine to medium grained diorite outcrops altered to quartz-sericite-chlorite-pyrite (phyllic) with associated significant pyrite (up to 5%) and minor chalcopyrite along micro fractures.
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Calo
A cluster of unusually large chargeability anomalies measuring at least 4km by 6 km in extent overlain by younger cover rocks.The anomalies are interpreted to be related to sulphides associated with porphyry Cu-Au mineralization. High-sulphidation epithermal Cu-Au showings, along with advanced argillic alteration - which are usually indicative of proximity to porphyry mineralization in the Philippines - as well as diatreme breccias and porphyry-type alteration, occur around the margins of the chargeability anomalies, and in erosional windows. Seven scout drill holes were drilled in this large area and all bottomed in unmineralized zones, except hole 7 which intersected transported clasts of porphyry copper mineralization in a lithic tuff.
Potassic-altered dirorite and chlorite-clay-altered volcanic clasts contain up to 1% chalcopyrite and are believed to have been transported a relatively short distance from source.This new porphyry mineralization occurrence, along with Freeport McMoRan's Taysan porphyry Cu-Au prospect 8km to the north, and the Pica porphyry Cu-Au prospect 4km to the south, are confirming the potential of the very large target area for a cluster of porphyry Cu-Au deposits.
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Palacpac
Potassic-altered medium grained diorite intrusives with abundant Cu-Au showings. Boulders of quartz-clay-pyrite altered rock fragments common on ridges and spurs. Interpreted as partly eroded porphyry Cu-Au system.
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San Nicolas Reconnaissance to semi-detailed mapping identified hydrothermal breccias and quartz-clay-pyrite (argillic) altered outcrops with associated malachite staining and minor chalcopyrite. Structurally controlled SCC alteration, with copper showings, in metavolcanics and younger intrusives also mapped. The younger intrusives include andesite porphyry and medium grained diorite that grades to medium grained hornblende quartz diorite. Quartz-chlorite-sericite-epidote-pyrite (QSC) and chlorite-sericite-quartz (SCC) common replacement within the younger intrusives.
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Talahib
Reconnaissance work has identified significant Cu and Au mineralization in hydrothermal breccias in area of phyllic alteration. Stream sediment samples analyzed up to 650 ppm Cu and 468 ppb Au. Rock channel samples include 6% Cu over 20m; 1.66 g/t Au over 10m, 1.80% lead (Pb) over 20m, 2.5% zinc (Zn) over 20m; and 143 ppm Mo over 20m.
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EPITHERMAL GOLD (Au) PROSPECTS
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Kay Tanda
Epithermal Au-Ag mineralization at Kay Tanda is associated with extensive and intense quartz stockworks, veins and hydrothermal breccias, with accompanying base metal sulphides. Kay Tanda is reflected by an induced polarization chargeability anomaly that is about 1.5km by 1.4km in extent, which is part of a much larger chargeability anomaly which extends over 6km along strike to the NE. To date, drilling has been conducted only on the Kay Tanda part of the trend.
Mindoro has completed 147 reverse circulation (RC) and 26 core drill holes at Kay Tanda. Almost all holes have encountered near-surface, generally flat-lying to gently-dipping blanket-like low-grade stockwork mineralization. This is strongly to partially oxidized to depths of 40 to 160m and non-oxide below this. Drilling, especially at deeper levels, has encountered at least 5 steeply-dipping, much higher-grade zones with bonanza grades to 246 g/t Au and over 1,000 g/t Ag, which are interpreted as structurally controlled upflow, or "feeder" zones.
Structural studies are in progress to determine the nature and controls of the high-grade zones, and the latest hole (KTDH-24) has helped considerably in this regard. The high-grade mineralization appears to occur preferentially at elevations below 250m (ASL) interpreted to be a paleo-boiling zone. Few holes have penetrated to this depth to date. Such upflow zones can be associated with bonanza mineralization and constitute some of the world's best epithermal Au-Ag deposits.
Examples of high grade intercepts include: 52m in Hole KTDH 04 with 11.50 g/t Au and 1.40 g/t Ag including 21.3m of 23.50 g/t Au and 2.07 g/t Ag; 61.0m in Hole KTDH 20 with 5.12 g/t Au and 0.98 g/t Ag including 1.0m of 246.41 g/t Au and 2.15 g/t Ag; and 99.20m in Hole KTDH 24 with 2.72 g/t Au and 1.03 g/t Ag including 1.0m of 192.09 g/t Au and 1.70 g/t Ag.
To date, 40%-67 % of the previously defined Exploration Target, at a cut-off of 0.5 g/t Au, has been converted to resources. Summary results are:
Total Inferred Resource: 11,599,000 @ 0.70 g/t Au, 3.0 g/t Ag (262,000 contained oz Au);
Total Indicated Resource: 3,365,000 @ 0.88 g/t Au, 8.0 g/t Ag (95,000 contained oz Au)
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SW Breccia
Past work outlined from 5 to 7km of NE-trending vein/breccia trends on the Lobo Project. Mineralization along these epithermal trends occurs as both low-sulphidation Au and high-sulphidation Cu-Ag, with lesser Au mineralization shoots. Two such mineralization shoots are SW Breccia, where Mindoro has drill-defined a near-surface Au resource and the old Lobo Mine, where Cu was mined during the 1960s. The SW Breccia vein/breccia trend is open in two directions. High Au-Cu-Ag values occur at surface in a number of areas along these trends. There are likely other mineralization-shoots not exposed at surface that will require drilling to discover. 25 drill holes completed by Mindoro from 2003-2004 defined an National Instrument (NI) 43-101 compliant indicated resource of 270,000 tonnes at 6.49 g/t Au containing 56,380 ounces (oz) Au and additional inferred resource of 61,000 tonnes at 5.35 g/t Au containing 10,540 oz Au.
Programs are carried out under the supervision of Tony Climie, P.Geol., CEO and COO of Mindoro, who is a qualified person as defined by National Instrument 43-101 and who is responsible for the technical disclosure
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