MELBOURNE, AUSTRALIA--(Marketwire - Oct. 31, 2012) - Mindoro Resources Ltd. (TSX VENTURE:MIO) (MDO.AX) (OLM.F) (Mindoro, "the Company"), is pleased to announce completion of the sale of its 100% direct and indirect interest in the Batangas gold project and 75% direct and indirect interest in the Tapian San Francisco copper-gold project, both located in the Philippines, to Australian based Red Mountain Mining Ltd ("Red Mountain").
As consideration for the sale ASX listed Red Mountain (RMX) has issued Mindoro with 100 million fully paid RMX ordinary shares, with full voting rights, to be held in escrow for 12 months, together with 50 million Performance shares. The Red Mountain shares issued to Mindoro are valued at around A$10 million. Mindoro now holds a 55.8% interest in Red Mountain on an undiluted basis.
The Performance shares would convert to full voting shares upon Red Mountain upgrading the Indicated Resource at Batangas to 600,000 oz of gold and completing a scoping study that demonstrates a viable gold mining project based on more than 50% of the Indicated Resource converting to Mineral Reserve or equivalent by the 31 October 2013. The Performance Shares, if converted, will be subject to a further voluntary escrow of up to 12 months. The Performance Shares will be cancelled after 12 months from completion if the above objectives are not achieved.
Mindoro's President and CEO Jon Dugdale said, "we are delighted to have completed the sale of the Batangas and Tapian San Francisco gold and copper-gold assets to Red Mountain, as the transaction matches funding for an expanded drilling program, and development expertise, to these high quality assets and the Philippines based exploration team". "Mindoro shareholders maintain exposure to resource growth and exploration upside through the Mindoro shareholding in Red Mountain and potential to convert the Performance shares."
Red Mountain Chairman and acting CEO Neil Warburton stated, "Our strategy is three tiered, convert low grade/high tonnage gold resources into higher grade mineable reserves, use existing infrastructure to fast track development, further explore our large land holdings and test multiple targets to establish long mine life."
The drilling program at Batangas continues to test high-grade gold targets at Archangel and high-grade targets are being defined at Lobo for drilling from early next year. This program has been funded via a loan facility of up to A$1 million from Red Mountain. The loan is now an intercompany loan between Red Mountain and it's now wholly owned subsidiary Red Mountain Mining (Singapore) Pte Ltd that holds the interests in the Philippines subsidiaries and assets.
Mindoro's President and CEO, Jon Dugdale, has joined Red Mountain's Board as an Executive Director while remaining President and CEO of Mindoro, and will become Managing Director of Red Mountain from early 2013 following resignation as Mindoro President and CEO. The appointment of Mindoro's new CEO will be announced in due course.
On behalf of the Board of Directors:
Jon Dugdale, President and CEO
Mindoro is a Tier 1 Issuer trading on the TSX Venture Exchange (MIO), Australian Securities Exchange (MDO) and Frankfurt Stock Exchange (WKN 906167). Mindoro has a 75% interest in the Agata Nickel Project, Mindanao and the Pan de Azucar Sulphur-Copper-Gold project, Iloilo, both of which are the subject of option and joint venture agreements with TVI Pacific Inc. (release 27 September 2012). Mindoro also holds a 55.8% stake in ASX listed Red Mountain Mining that has a 100% direct and indirect interest in the Batangas gold and copper-gold projects, and a 75% direct and indirect interest in the Tapian San Francisco copper-gold project.
Mindoro's exploration programs are prepared and/or designed and carried out under the supervision of Tony Climie, P.Geo., who is a qualified person as defined by National Instrument 43-101 and is a competent person as defined by the JORC Code, and who has reviewed and verified the pertinent disclosure of exploration related technical information contained in this news release.
This release may contain forward-looking statements including management's assessments of future plans and operations, and expectations of future production. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks include, but are not limited to, the risks associated with the mining and exploration industry (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty with respect to results of exploration, the uncertainty of estimates and projections relating to production and the uncertainty of the availability of capital). The assumptions used in the preparation of such statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The Company does not undertake to update forward-looking statements except where required to do so by law.