Salazar Resources Ltd. (the "Company") is pleased to provide an update on the ongoing development of the El Domo deposit.
On March 26, 2013, the Company announced an investment and participation agreement (the "Agreement") with Urion Mining International BV, a wholly owned subsidiary of Trafigura Beheer B.V. (together referred to as "Urion"), a privately held international commodity trading and logistics company. The terms of the Agreement were such that Urion made an investment of $2 million into the Company to assist with the development of the El Domo deposit, including funding for a preliminary economic assessment ("PEA"). On completion of the PEA, Urion held an option to provide further funding for the development of the project. Under the terms of the Agreement, Urion had the option to negotiate a new agreement to provide mine operation and development expertise and development capital. In return Urion could have earned an interest in the Company or the Project and would have secured off-take rights to purchase all production from future operations.
A mutual decision has been made with Urion to terminate the Agreement. Urion no longer wished to provide mine operating and development services for the El Domo deposit and attempts by Urion to have a third party mine operator provide the services resulted in terms and conditions put forward that were too dilutive to the Company's interests in El Domo and were consequently not seen as beneficial to the Company and its shareholders.
Urion remains a significant shareholder and supporter of Salazar; however, Urion's rights under the Agreement, including off-take and earn-in rights, have expired. The Company intends to maintain an ongoing working relationship with Urion who have expressed a desire to provide assistance in the project development plans.
The Company is currently in discussions with several potential funding and technical partners and views this as an opportunity to create a new partnership at a time when the market is looking for projects in the development stage and with the high-grade, low CAPEX qualities of El Domo.
Mr. Fredy Salazar, CEO of Salazar Resources, stated, "We have made significant progress over the last year and are encouraged by the changes made by Ecuador to the mining law regarding the medium-sized mining category. I am very grateful to Urion and their team for the great support we received through the completion of the positive PEA. As we continue the development of the El Domo Deposit, we look forward to creating new partnerships. With the PEA complete and the positive metallurgic testing results, the Company is preparing for the pre-feasibility phase for the El Domo Deposit."
ON BEHALF OF THE BOARD OF SALAZAR RESOURCES LIMITED
Fredy Salazar, President & CEO, Salazar Resources Limited