Adventure Gold Inc. (TSX VENTURE:AGE) and Mazorro Resources Inc. (TSX-V: MZO; Frankfurt: JAM), has announced that they have signed a letter of agreement pursuant to which Mazorro has acquired an exclusive option to earn up to 70-per-cent interest in 26 claims covering an area of approximately 352 hectares of the Company's Lapaska Gold property in Val d'Or East area, by spending $7.7M in exploration expenditures, issuing 3,000,000 shares of Mazorro, paying $250,000 in cash payment and paying $2,000,000 over the next 6 years.
Adventure Gold will be the operator until Mazorro earns 70% interest.
Under the terms of the option agreement, in order to acquire an initial 50% undivided interest in the Property (the "First Option"), Mazorro is required to provide total cash payments of $250,000, a total of 3,000,000 common shares and has committed to conduct exploration of $1,700,000 over a period of three years from the completion of a definitive option agreement. Consideration payable is summarized as follows:
Following the exercise of the First Option, Mazorro shall have the option to acquire an additional 20% undivided interest in the Property (the "Second Option"), thereby acquiring a total undivided interest of 70%, by making additional cash payments of $2,000,000 and by conducting additional exploration of $6,000,000 over another three year period. Mazorro shall have the option of paying up to 75% of the required cash payments for the Second Option in common shares at a price equal to the market price of the Company's shares on the TSX Venture Exchange (the "Exchange") on the date such payment is payable less the maximum applicable discount allowed by the policies of the Exchange, subject to the required regulatory and corporate approvals, including disinterested shareholder approval, as applicable. After the Second Option periods, Mazorro shall be entitled to become the operator of the Property.
"Adventure Gold is very pleased to start a new partnership with Mazorro to explore and develop the Lapaska gold Property. We have already identified quality drilling targets in three different areas and we are ready to start a 4,000 meter drilling program immediately following completion of the definitive agreement." stated Mr. Marco Gagnon, President and CEO of Adventure Gold.
The completion of the definitive option agreement is subject to: (i) the provision to Mazorro of a satisfactory National Instrument 43-101 ("NI 43-101") compliant technical report on the Lapaska property; (ii) the completion by Mazorro of an initial private placement financing of $250 000; (iii) the completion of a second private placement financing (on terms and conditions to be determined at a later date); and, (iv) obtaining the required regulatory approvals including the acceptance of the Exchange. The parties have agreed to deploy their best efforts to complete the closing of the definitive agreement by January 31, 2011. The parties can mutually agree to extend this date.
The Lapaska Property
The Property is 100%-owned by Adventure Gold Inc. and is favourably located between the past producing gold deposit Sigma II to the east (150,000 ounces at 2.5 g/t Au: Placer Dome, 1997) which was operated by open pit method and the Simkar gold deposit to the west (NI 43-101 inferred resource of 105,000 oz at 5.3 g/t Au: Megastar – MDV: TSX-V, September 2008). The Property contains three significant gold-bearing zones: the Lapaska Central, West and Lourmet zones and is also strategically located along the prolific Cadillac Larder Lake Gold Break, a regionally extensive structure that is spatially related to numerous gold mines.
The Company announced its first NI 43-101 compliant resource estimate for the Property on February 9, 2010 and filed a NI 43-101 technical report on SEDAR on March 19, 2010. The NI 43-101 report was prepared by independent qualified persons from InnovExplo, a consultant firm based in Val d'Or, Quebec. InnovExplo estimated that the Central Zone deposit has Inferred Resources of 220,000 metric tonnes grading 3.14 g/t Au for a total of 22,197 ounces at a cut-off grade of 2.0 g/t Au. Mazorro has requested that InnovExplo update its report for the purposes of the proposed transaction. The Company will file the updated NI 43-101 report supporting mineral resource estimates on SEDAR within 45 days.
The InnovExplo technical report recommends additional drilling targeted at adding new resources to the existing mineral inventory at the Property. A 3D isometric view of the block model shows the location of the current resources and the potential to extend these resources by exploration. The ore shoots plunging to the south-east are still open at depth. Additional sub parallel ore shoots that could be repeated in the south-western extension at depth and laterally (east and west) near the surface are still not tested by drilling.
InnovExplo also indicates that the gold mineralization intersected in the West Zone (not included in the mineral resource estimates above) shows similarities to the gold mineralization observed generally in feldspar porphyry dykes ("G dykes") which represent a significant portion of the mineralization at the Sigma Mines (4 million ounces produced). The West Zone is characterized by a series of sub horizontal veins and veinlets bordered by vertical shear zones hosted by a porphyry G dyke type. A drilling program to test the west down plunge of the system below 200 meters is recommended in the West Zone. A 2 kilometre long underexplored area between the West Zone and the Lapaska Central Zone has also been highlighted in the 43-101 report as an area with good exploration potential for gold.
The Property lies at the junction of favourable lithologies and deformation corridors associated to the Cadillac Larder Lake Gold Break. Regional east-west-trending intermediate to felsic dyke swarms favourable to host gold mineralization are found on the property and are often associated with induced polarization (IP) anomalies. The coincidence of favourable lithologies, deformation corridor and IP anomalies represents targets that warrant additional exploration work that will be the subject of Mazorro's initial exploration drilling plans.
"Mazorro is excited to be entering into the Lapaska option agreement with Adventure Gold. The Lapaska property has strong exploration potential and allows us to immediately participate in advanced stage exploration to add to the existing defined mineral resources. We look forward to all the benefits of working in the established Val d'Or gold mining camp and in the mining friendly jurisdiction of Quebec", stated Mr. André Audet, CEO of Mazorro.
Mr. Jules Riopel, Vice-President Exploration and Acquisitions of Adventure Gold, is acting as qualified person (as defined by NI 43-101) and has reviewed and approved the scientific and technical information in this press release.
Source: Adventure Gold Inc.