Agreement with Troy Resources

25 Jul 2006 07:01

Horizonte Minerals PLC25 July 2006 Horizonte Minerals plc / Index: AIM / Epic: HMZ / Sector: Mining 25 July 2006 Horizonte Minerals plc ('Horizonte' or 'the Group') TO DEVELOP BRAZILIAN GOLD PROSPECT WITH SERTAO MINERACAO LTDA, A 70% OWNED SUBSIDIARY OF AUSTRALIAN MINER TROY RESOURCES Horizonte Minerals plc, the AIM listed exploration and development companyfocused on Brazil and Peru, has signed a Letter of Intent (LOI) with Australiangold producer Troy Resources NL's 70% owned local subsidiary Sertao MineracaoLtda ('SML') to advance Horizonte's Goias Velho gold exploration project inBrazil. The concession area, that has yielded positive gold anomalies, iscontiguous to SML's projects, which also includes the operating Sertao goldmine. It is the intention of the two parties to delineate further economicopen-pit resources in close proximity to the mine. The Goias Velho project consists of seven contiguous exploration licensestotalling 13,300 ha covering the Santa Rita greenstone belt. This extendsnorthwest from the town of Goias Velho, an historical centre of colonial goldmining activity. A series of gold geochemical anomalies along the greenstonebelt within the concession package have been defined by Horizonte throughinitial reconnaissance work, including soil and stream sediment sampling. The ground to the north and east of the Goias Velho project is alreadycontrolled by SML and totals 92,371 ha. The Sertao gold mine located 18km northof the Horizonte's project area, produced 69,580 ounces of gold at an averagecost of US$98 (A$129) per ounce in 2004/05. Troy has already defined targets 20km north west of the Sertao mine at theAntena Cluster, with an estimated resource of 860,000 tonnes at a grade of 2.12g/t Au for 58,700 oz. It also recently identified the Digo Digo prospect locatedto the east of the Horizonte ground, described as a 5.6 km long NW-trendinggossan horizon. Under the terms of the of the LOI, SML can earn up to a 70% interest in theGoias Velho property by spending US$650,000 on exploration within two years.Once expenditure levels have been reached a new Joint Venture company will beestablished to take the property through to production. This would be 30% ownedby Horizonte and 70% by SML, and would function on a "contribute or dilute"basis. In the event that either parties participating interest is diluted below10% it shall convert to a 2% net smelter return (NSR). Horizonte CEO Jeremy Martin said: "We are pleased to be working with SML on thisproject, they are an established mining company with a proven track record ofgold discovery in the district. The deal is in line with our strategy ofidentifying quality early stage projects before securing a partner to assume thehigh financial exposure of development and production, while maintaining upsidefor Horizonte. "This model is particularly applicable to the Goias Velho project. Due to thenature and style of gold mineralisation found in the district, explorationdrilling needs to be closely spaced, which is a costly process. SML, with theuse of Troy's drilling equipment, is able to test targets in a far more costeffective manner than using contract drillers. Importantly any discovery can befast tracked through to production with ore treated at SML's mine facility tothe north of the project area, generating a revenue stream." "The deal also enables us to concentrate on our advanced projects in Brazil andPeru, which we believe have significant upside potential. This is emphasised byour recent announcement at El Agulia in Peru, outlining high grade silvervalues. We are currently undertaking further exploration work and will updatethe market as soon as possible." 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 six years of mining and management experience, graduatedwith a degree in geology from the Camborne School of Mines, and an MSc inmineral 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 Contacts Jeremy Martin/David Hall Horizonte Minerals plc Tel: +44 (0)20 7495 5446 David Paxton Hichens Harrison Tel: +44 (0)20 7382 7785 Hugo de Salis St Brides Media & Finance Ltd Tel: +44 (0)20 7242 4477 John Frain/Fergal Meegan Davy Tel: +353 1 679 6363 This information is provided by RNS The company news service from the London Stock Exchange