Vancouver, B.C. -- Orex Minerals Inc. -- (REX: TSX-V) ("Orex")
is pleased to announce that it has signed a non-binding Letter-of-Intent with Fresnillo PLC -- (FRES: LSE) ("Fresnillo")
respecting the proposed formation of a joint venture to explore and develop as one large project their respective mineral concessions in the Coneto gold-silver mining district in northern Durango State, Mexico.
Both Orex and Fresnillo hold extensive contiguous mineral concessions totaling over 18,300 hectares in the heart of the historic Coneto mining district. These concessions cover more than 40 known mineralized epithermal quartz veins. The project will be managed by a technical committee in which both Orex and Fresnillo will have representation.
Gary Cope, President of Orex, says, "We are very excited at the prospect of entering into an agreement with Fresnillo to advance the Coneto gold-silver project. The proposed joint venture will be a logical step, as both companies bring land and expertise to the joint venture and Fresnillo will contribute exploration funds. Fresnillo's management is also showing their confidence in Orex by proposing to take an equity position in Orex. We are optimistic that there will be more joint activities in Mexico."
David Giles, Vice-President Exploration of Fresnillo Plc states, "We are pleased to have reached an agreement with Orex to evaluate the Coneto property using the combined experience of our exploration teams."
Terms of the proposed Coneto Joint Venture
While the Letter-of-Intent does not create a binding agreement between Orex and Fresnillo, it does set out the principal terms which Orex and Fresnillo hope to incorporate in a definitive joint venture agreement. Orex and Fresnillo are currently negotiating and expect to shortly finalize and sign the joint venture agreement. These principal terms are:
- Fresnillo will spend a minimum of US$ 2 million on exploration during the first year within the Coneto mining concessions of Orex and Fresnillo.
- Fresnillo will have the option to spend an additional US$ 2 million per year on exploration for each of the following two years if Fresnillo decides to continue with the Coneto Joint Venture.
- Upon Fresnillo spending an aggregate of US$ 6 million on exploration activities, Orex and Fresnillo will each contribute their respective Coneto mining concessions to a new company (NewCo) that initially would be owned 55% by Fresnillo and 45% by Orex.
- Fresnillo will have the right to increase its ownership of NewCo to 70% by advancing the Coneto project to the pre-feasibility stage.
- Following the delivery of a pre-feasibility report, any additional funding required by NewCo will be provided by Orex and Fresnillo in proportion to their respective ownership interests in NewCo.
- Fresnillo will have a right of first refusal to acquire Orex's shares in NewCo if Orex receives an offer for Orex's interest in NewCo that Orex proposes to accept.
- Fresnillo will participate in a unit private placement of Orex's common shares for a total consideration of US$ 2 million. The price per unit will be set at CDN$ 0.80 and will close on the execution of the definitive joint venture transaction documents. Each unit will consist of one common share and one half of one share purchase warrant. Each whole share purchase warrant will be valid for 24 months from the date of the private placement, and entitle Fresnillo to purchase one additional common share of Orex at a price of CDN$ 1.00 per share.
- During the life of the joint venture, in the event that Orex, or any of its subsidiaries, enters into a transaction to acquire an interest in any additional mineral properties in Mexico, then later decides to sell or option out that interest to a third party, Fresnillo will have a right of first refusal to participate in such transaction on the same terms and conditions as offered to the third party.
Orex will provide further updates regarding the status of the proposed Coneto Joint Venture.
Located in the Mesa Central on the eastern flank of the Sierra Madre Occidental Mountains, Coneto is centrally positioned in the "Mexican Silver Trend". This silver trend, stretching from Guanajuato in the southeast, through the states of Zacatecas and Durango, hosts some of the World's largest silver deposits, including the Real de Angeles, Zacatecas, Fresnillo, La Preciosa, and La Pitarrilla mining camps.
About Orex Minerals Inc.
Orex Minerals Inc. is a junior mineral exploration company, listed on the Toronto Stock Exchange -- Venture board, comprised of highly qualified mining professionals with a focus on the exploration of prospective gold and gold-silver properties.
About Fresnillo PLC
Fresnillo PLC is a senior mining company listed on the London Stock Exchange and is the World's largest primary silver producer. Along with several other producing mines, its namesake Fresnillo Mine in Zacatecas, Mexico, is the largest primary silver-gold mining operation. Fresnillo, a part of the Industrias Peñoles group of companies, has highly qualified exploration and mining professionals working throughout Mexico.
Ben Whiting, P.Geo., is the Qualified Person as defined in NI43-101 and takes responsibility for the technical disclosure in this news release.
ON BEHALF OF THE BOARD OF DIRECTORS
For further information, contact Orex Minerals Inc. at (604) 687-6310,
email email@example.com or visit our website at www.orexminerals.com
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, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties including the non-consummation of the transactions herein contemplated. Actual results may differ materially from those currently anticipated in such statements. Orex relies upon litigation protection for forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.