Metals Exploration Regulatory News (MTL)

2 Feb 2005 11:16

Metals Exploration PLC02 February 2005 FOR IMMEDIATE RELEASE 2 FEBRUARY 2005 Metals Exploration plc Announcement The board of Metals Exploration Plc (LSE code "MTL") is pleased to announce thatthe Company has signed an option agreement in the Philippines over the RunrunoProject. The agreement allows the Company to earn up to 70% economic interest inthe project fully owned by FCF Mining Corporation by the issuance of cash andshares over a three year period totalling US$210,000 and 1,600,000 shares to itstwo shareholders, Filminera Resources Corporation and Christian Mining, Inc. The Runruno Project has been reviewed by Mr Gary Powell, a director of theCompany, as an advanced project having potential for the definition of furthergold and copper resources. During a visit to the Philippines in November, 2004,Mr Powell carried out field investigations and due diligence activities at theproject. The Runruno project has had previous exploration conducted over it buthas never been advanced due partly to the property being the subject of numerouslegal disputes lasting several years, which have now all been legally resolved. The Runruno gold and copper deposit, covered by a granted Exploration Permit EPNo 11-000013, is located approximately 190 aerial kilometres North-Northeastfrom Manila in Northern Luzon and covers some 3,091 hectares. The board of Metals Exploration views the Runruno Project as a uniqueopportunity to enter an advanced project with numerous data and potential forthe increase of its already known resource. Project History From 1969 to 1972, a local mining company (Fil-Am) completed a total of 69diamond drill holes for a total 7,300 meters and developed three exploratoryadits totaling approximately 800 metres. Using the results from this program,Fil-Am calculated an estimated 13.4 Million tonne resource at an average gradeof 1.41 g/t gold, and 0.8 g/t gold cutoff, for a total contained 607,500 ouncesgold. In 1974, Consolidated Goldfields of Australia Ltd. optioned the property fromFil-Am for one year, and in 1975 drilled 9 widely spaced diamond drill holestotalling 1,373 metres and excavated 142 test pits, 2-3 metres deep, over themore prospective areas of the property. Approximately 9,000 metres of drillinghas now been completed at Runruno. In mid-1978, Fil-Am contracted two Japanese companies, Kurimoto Ironworks,Ltd.and Nissho Iwai and Co. Ltd. to conduct a feasibility study for its propertybased on the available diamond drill hole data. Kurimoto sub-contracted thegeological, mining and metallurgical aspects of the feasibility study to DowaEngineering Co. Ltd. The Japanese companies reportedly found that the Fil-Amproperty was economically viable with an estimated resource to be about 450,000ounces gold mineable by block-caving method. In November 1980, Golden Arrow Mining Company, a subsidiary of Apex MiningCompany took an option over the property and reportedly completed 17 diamonddrill holes totalling 1,819 metres. No further work was carried out until theyrelinquished the option in 1987 due to financial and internal managementproblems. On August 28, 1995, Base Metal Mineral Resources ("BMMR"), a subsidiary ofLondon Fiduciary Trust Plc ("LFTP"), executed a Mines Operating Agreement("MOA") with Fil-Am allowing the former exclusive rights to explore, develop andoperate the property. In 1996, LFTP engaged the services of ACA HoweInternational Ltd ("ACA Howe") to calculate a resource estimate for theproperty. In their report, ACA Howe estimated an Inferred Resource containing607,000 ounces gold, and that the resource might be understated by up to 30% dueto poor core recovery. (Hodgson, M. J., June 1996, Geology and ore reserves ofthe Runruno gold deposits: unpublished report prepared for London FiduciaryTrust Ltd by ACA Howe International Ltd.) During 1996, Newmont Philippines, Inc. conducted a field investigation andevaluation of the property, but did not elect to take an interest in theproperty. Later, additional tenements were incorporated into a joint ventureagreement with three other parties, which in 2000, was then joint ventured toGreenwater Mining Corporation, an 80%-owned subsidiary of Placer Greenwater Pty.Ltd. of Singapore (100%-owned subsidiary of Placer Dome Exploration of Canada).The project then covered some 12,390 hectares of land area, of which the currentproperty formed the central portion. Unpublished reports, including ones by byGreenwater Mining Corporation, who have been involved with the project over theyears, suggest that with further work a 2 million oz gold resource isachievable. Diamond drill core samples of the low-grade resource investigated byPlacer, which the company undertook with no exploration of the high-grade quartzveins being mined by the artisan miners, were inspected by Mr Powell during thedue diligence visit, and were found to be stored in a safe and secure manner.The quality of the work carried out by Placer was found to be of a very highstandard and therefore their results can be regarded as not requiring anysubstantial verification process. The Company has also taken account of the fact that the property is situated tothe northwest of Climax Mining Ltd's Didipio Project (20.34M tonnes of Provenand Probable Ore Reserves @ 1.7 g/t Au and 0.65% Cu - contained within a globalresource of 121 million tonnes, grading 0.97 g/t Au and 0.39% Cu, for containedgold of 3.8 million ounces of gold and 470,000 tonnes of copper.). seewww.climaxmining.com.au/project_didipio.htm Commission Under an arrangement entered into in December 2004 with East West Drilling (L)Limited,a major drilling company in the Philippines, (" EWD") agreed to use itsreasonable endeavours to introduce the Runruno Project to the Company inconsideration of the payment of a success fee of £45,000. The Company alsoagreed to accept the subscription by EWD for 1.5m shares at 3p per share and toissue 2m warrants to subscribe for ordinary shares at 3.25p per share. Under thesame arrangements, EWD has introduced one other project to the Company, inrespect of which negotiations are well advanced and which, if completed, willresult in the payment to EWD of a further £45,000, and the subscription by EWDfor a further 1,500,000 shares at 3p per share and 2,000, 000 warrants tosubscribe for shares at 3.25p per share. Gary Powell Mr Gary Powell is a consulting geologist who has been involved in gold andcopper exploration projects for over 20 years. He has a Bachelor of Sciencedegree in geology and is a member of the Australasian Institute of Mining andMetallurgy. He has compiled, read and approved the technical disclosure in thisannouncement. Mr Powell does not have any economic interest in the above mentioned property.He is a Non- Executive Director of the Company and receives separateremuneration for the provision of his technical services. Contact: Steven Smith, Chairman 07797 721 858 Jonathan Anderson, Investor Relations 07950 410 680 or 00639162267575 This information is provided by RNS The company news service from the London Stock Exchange