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DOT Executes MOU for Acquisition of San Alfredo Project in South America

DOT Resources Ltd. ("DOT" or the "Corporation") is pleased to announce the execution of a Memorandum of Understanding ("MOU") for the acquisition of 100% of a 37,500 hectare (92,666 acre) mineral concession in Paraguay, South America.

The San Alfredo Project (the "Project", "Property" or "Concession") is located in northeast Paraguay, approximately 70km from the town of Concepcion. The Property is considered to be very prospective for nickel, copper, and platinum group element ("PGE") mineralization.

The MOU, which will be superseded by a Purchase and Sale Agreement (the "Agreement"), describes the terms for the acquisition of 100% of the shares of Minera Itape S.A. ("MISA"), a private company under the laws of Paraguay that currently controls the Concession. Upon execution of the Agreement, DOT agrees to issue 1,000,000 common shares of the Corporation's stock to the vendor. In addition to certain obligations as to maintaining the Concession in good standing, the Corporation will invest at least US $100,000 in qualifying expenditures during the first 12-months after closing the transaction. Closure of the Agreement is subject to the approval of the TSX Venture Exchange ("TSXV") and other customary requirements and contingencies.

ABOUT PARAGUAY

Paraguay is significantly under-explored in comparison with the bordering mineral-rich countries of Brazil, Bolivia, and Argentina. Changes to the mining laws and foreign investment policies in 2007 and 2011 have resulted in increased foreign investment in the natural resource sectors. Today the country is a pro-development and pro-mining jurisdiction with considerable untapped mineral potential. Paraguay has highly favorable tax laws, an economy based on highly-efficient agriculture, and an excess of low-cost hydroelectricity.

Important mineral projects in the country include: a continuing gold mining venture at Paso Yobai and titanium sands projects in Alto Parana and Canindeyú Provinces.

John J. Komarnicki, President and CEO, commented on the acquisition and the potential of the Project: "We are very pleased to grow DOT through the acquisition of the San Alfredo Property. This exciting project includes a huge land position with significant potential to host a large nickel-copper-PGE deposit. Yet the terms of the MOU allow us to conserve capital and focus on milestone-driven exploration. The first year requirements are very modest, and we expect to use this time to advance our understanding of the mineral system and demonstrate the value of the Project."

THE SAN ALFREDO PROJECT

The Project was spawned by a major geophysical anomaly identified in the late 1970's by the Anschutz Corporation and later investigated, but not rigorously tested, by INCO and others. The geophysical target strikes almost east-west and is at least 40 km long and 2 km wide. The geophysical anomaly and geological setting have characteristics of a large magmatic nickel-copper-PGE system. The intensity and large scale of the feature prompted INCO and joint venture partners to visit the site and conduct early stage exploration in the late 1990's. Smaller exploration companies advanced the Project through limited geophysics, geochemistry, and small-scale drilling between 2000 and 2008.

The source of the geophysical anomaly does not outcrop, but drilling confirmed the presence of a significant body of ultramafic rocks, primarily dunite and peridotite. These are igneous rocks containing very low silica, but high magnesium and iron. They are sourced from very deep within the Earth and tend to be enriched in elements such as nickel, copper, cobalt, chromium, and platinum group elements. The geological setting suggests that the ultramafic rocks at San Alfredo are Precambrian or early Paleozoic in age.

Little is known about the details of the drilling on the Project. However, technical reports describe sparse indications of chalcopyrite (copper iron sulfide), pyrrhotite, pyrite, and rare millerite (nickel sulfide) in the drill core. The drilling reportedly did encounter nickel values up to 3,000 ppm, along with anomalous copper (340 ppm), and cobalt (100 ppm). There are also reports of weakly anomalous assays for platinum and palladium (up to 20 ppb).(1) The presence of anomalous concentrations of nickel, copper, cobalt, and PGE's in non-sulfide horizons is considered a favorable indication of the potential for economic concentrations of these metals within the ultramafic complex.

The descriptions of the rocks and mineralogy from drill core at the Project are consistent with the large stratiform (or layered) type of ultramafic complex. Large examples of these complexes, such as the Bushveld Complex in South Africa, Voisey's Bay and Thompson Nickel Belt in Canada, and Pachenga in Russia are host to some of the largest deposits of nickel and PGE's in the world.

These ultramafic complexes tend to differentiate as they crystallize; sulfide and platinum group minerals segregate into layers, often near the base of a magma pulse or magma chamber. Economic concentrations of nickel, copper, cobalt, and PGE's, if present, are most often associated with these sulfide-rich layers. Given the huge scale of the anomaly, the Project has not been significantly explored. While details are not yet available, widely spaced drilling has reportedly tested only a 3,000 meter strip along the central axis of the anomaly (less than 10% of the strike length of the feature). It does not appear that drilling has penetrated the margins or border zones of the ultramafic complex.

(1) While the Corporation is confident as to the quality of the technical work performed by previous workers, the reader is cautioned that DOT has been unable to verify these assays or confirm that they were generated with sufficient quality assurance or other oversight as dictated by NI 43-101. The Corporation considers these data as historic indications and places no economic significance on the values.

The Corporation is engaging specialty expertise to evaluate the Project and recommend an appropriate exploration program. The Corporation believes that the potential is very significant. The key to success will be a systematic program aimed at achieving the important milestones that will confirm that potential and advance it towards a major discovery.

DETAILS OF THE TRANSACTION

While the closure of the transaction is dependent upon the execution of a definitive agreement and approval by the TSXV, the parties have executed in good faith the MOU that provides substantial detail that will govern the terms of the Agreement. The Corporation expects the final Agreement to be executed before the end of December, 2014.

The material terms and conditions of the proposed acquisition are summarized as follows:

  • Upon closing, DOT will assume the obligations associated with the terms of the Concession, in compliance with the laws of Paraguay, for the exploration and development of the Property.
  • Upon closing, the Corporation will issue 1,000,000 common shares of DOT to the vendor. DOT will issue a further 4,000,000 common shares upon achieving several key exploration and development milestones. If exploration and development milestones are not met and DOT decides not to continue towards the next milestone, some or all of the additional 4,000,000 shares will not be issued at which point DOT's right to the Property will terminate.
  • DOT will invest a minimum of $100,000 in qualifying expenditures on the Project in the first 12 months after closing. Subsequent property investment will be contingent on technical merits and project milestones.
  • The vendor will retain a Net Smelter Royalty of 2.5% on the production and sale of all products from the Property.

Source: http://www.dotresourcesltd.com/

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