HZM.L Regulatory News (HZM)

6 Dec 2007 07:01

Horizonte Minerals PLC06 December 2007 Horizonte Minerals plc / Index: AIM / Epic: HMZ / Sector: Mining 6th December 2007 Horizonte Minerals plc ('Horizonte' or 'the Company') Tangara Gold Project Option Granted to Australian Miner Troy Resources Overview • US$2.8 million Option Agreement with Troy Resources for the Tangara gold project in Brazil • US$800,000 staged cash payment, US$2.0 million exploration and development commitment • Additional US$2 million cash payment upon exercise of option to advance project to production • Royalty to Horizonte of US$30 per ounce up to 500,000 oz produced • Net Smelter Return ('NSR') of 2% on production in excess of 1 million oz gold • Agreement fast tracks the development of the Tangara gold project and provides mid term cash flow potential for the Company • Incoming funds allow Horizonte to fast track resource development on other core projects Horizonte Minerals plc, the AIM listed exploration and development companyfocused on Brazil and Peru, has signed an Option Agreement with Troy Resources(ASX:TRY), through its wholly owned subsidiary Reinarda Mineracao Ltda, tooperate and develop Horizonte's Tangara Gold Project in the Carajas MineralProvince in Brazil. The agreement provides Horizonte with a staged cash paymentof US$800,000, a further US$2 million exploration and development commitment aswell as a royalty payment on production. This demonstrates both Troy's and theCompany's belief that the area has the potential to host economic goldmineralisation. Horizonte CEO Jeremy Martin said, "This agreement highlights the prospectivityand potential of Tangara. It ensures that the project is fast tracked andreceives the high cost investment associated with resource development leadingthrough to production. It confirms our business model of risk managing ourexploration programmes and provides Horizonte with a return on its investment,with potential for significant mid term cash flow from royalties on futureproduction. Troy is an excellent mining partner with a proven track record offast tracking projects to production. The Tangara project has excellentinfrastructure, especially considering Troy will be commencing production inearly 2008 at the Andorinhas gold project just 20km to the south of Tangara. Welook forward to developing the strategic association between both companies.The funds from this transaction will be used to fast track our other coreprojects through to the resource definition stage." Work completed at Tangara over the last 18 months has included soil and streamsediment sampling, ground geophysics, auger and diamond drilling, with the mainfocus being the Malvinas target, a 5km long by 1km wide gold in soil anomaly.The drilling here returned multiple economic intersections including: • DDH 4 - 35m grading 2.5 g/t Au, including 6.75m grading 9.8 g/t Au • DDH13 - 12m grading 5.0 g/t Au, including 2m grading 18.7 g/t Au • DDH14 - 2m @ 4.8 g/t Au • DDH23 - 2m @ 4.25 g/t Au • DDH24 - 4m @ 2.4 g/t Au Troy is building its land position in the area with mining scheduled to start atthe Andorinhas gold project in January 2008, located 20km to the south ofTangara, where the Lagoa Seca satellite deposit contains indicated and inferredresources of 700,000 tonnes grading 2.8 g/t Au for 64,000 oz. Open-pitmodelling here has defined a probable reserve of 480,000 tonnes grading 3.1 g/tAu for 48,320 oz (Source: Troy Quarterly Report ended 30 June 2007). Bycombining both companies' exploration packages, the production potential isenhanced. Terms of the Option Agreement The three year Option Agreement entitles Troy to acquire 100% of the Tangaraproject by making cash payments totalling US$800,000 to Horizonte. US$200,000is payable on signing and a further US$100,000 paid every six months thereafter.In addition Troy must expend US$2 million on exploration on the project withinthree years. If Troy wishes to exercise the option after three years, it willmake a further payment of US$2 million to the Company. Troy will then make aproduction royalty payment to Horizonte of US$30 for every ounce of goldproduced from the Tangara project area up to a maximum of 500,000 oz. In theevent of more than 500,000 oz being produced, a royalty of 1% NSR shall apply.This royalty will increase to 2% NSR in the event of production exceeding 1million oz. Sampling, assaying, and QA/QC Procedures adopted by Horizonte in the collection, preparation and storage ofsamples from the auger drilling programme, conform to industry-wide bestpractice and with chain of custody being observed for all samples. Analysis isundertaken by ACME Labs at its laboratories in Vancouver, Canada, and theCompany maintains QA/QC on all analytical work via the inclusion of certifiedreference materials and field duplicates and blanks, in addition to monitoringof the laboratory's own internal check-analysis. The above information has been reviewed and verified by Mr. Jeremy Martin, aDirector and Chief Executive of Horizonte, for the purposes of the Guidance Notefor Mining, Oil and Gas Companies issued by the London Stock Exchange in March2006. Mr. Martin, with seven years of mining and management experience,graduated with a degree in geology from the Camborne School of Mines, and an MScin mineral exploration from the University of Leicester and is a member in goodstanding with the Society of Economic Geologists and the Institute of MiningAnalysts. * * ENDS * * For further information visit www.horizonteminerals.com or contact: Jeremy Martin/David Hall Horizonte Minerals plc Tel: 020 7495 5446 David Paxton Hichens Harrison Tel: 020 7382 7785 Hugo de Salis St Brides Media & Finance Ltd Tel: 020 7242 4477 John Frain/Fergal Meegan Davy Tel: +353 1 679 6363 Notes to Editors: Horizonte Minerals Plc is an AIM listed mineral resources exploration groupfocused on the discovery, appraisal and development of gold and base metaldeposits in Brazil and Peru. The Company has two primary gold explorationprojects in Brazil, and one silver-zinc-lead project in Peru. The two Braziliangold projects, Tangara and Falcao, are located to the south of the highlyprospective Carajas Mineral Province. Both projects cover an area ofapproximately 300 sq km and are centred over greenstone belts, with known goldmineralisation. The scale of these project areas, the overall aerial extent ofthe mineralised system and the high density and magnitude of related goldanomalies (identified in river sediments, surface soils and rocks), indicate thepotential for multiple deposit discoveries. The silver-zinc-lead project is located in the historic mining district of Cerrode Pasco in Central Peru. Sampling and limited historic drilling on this projecthas demonstrated the high grade potential of this project. Additional projectsinclude the 4,660 hectare on the prospective Achaean aged Crixas greenstonebelt, where multiple nickel-copper anomalies have been defined and the 25,556hectare Lontra Ni Project situated in the Araguaia mobile belt, which flanks theeastern margin of the Carajas Mineral Province of northern Brazil. This information is provided by RNS The company news service from the London Stock Exchange