Option on Namibia project

25 May 2005 07:00

Copper Resources Corporation25 May 2005 COPPER RESOURCES CORPORATION ("CRC" or "the Company") COPPER RESOURCES ACQUIRES OPTION ON THE HAIB COPPER PROJECT IN NAMIBIA Copper Resources Corporation (AIM: "CRC"), whose principal asset is theHinoba-an Copper Project in the Philippines, today entered into an option andoperating agreement with Deep South Mining Company (Pty) Ltd., Afri-Can MarineMinerals Corporation and African Millennium Corporation (the "Option Agreement")on the Haib Copper Porphyry Project (the "Haib Project") in Namibia. Deep SouthMining Company (Pty) Limited is the holder of the Haib Project explorationlicence, subject to option agreements with Afri-Can Marine Minerals Corporationand African Millennium Corporation. The Haib Project is a substantial low grade sulphide copper porphyry deposit,located in southern Namibia 8 km from the Orange River and the South Africanborder. The property is held by Deep South Mining Company (Pty) Ltd. underExclusive Prospecting License (EPL) 3140. The licence area is 74,563 hectaresand incorporates all of the mineralization within the Haib deposit and asubstantial area around the deposit. The EPL renewal date is 21 April 2007.Renewal of the licence is assured under the Minerals Act of 1992 providing allconditions of the EPL have been satisfied and a reasonable work program issubmitted in support of the renewal application. With 52,000 meters of drilling, the Haib Project is a well-defined deposit thatwas placed on care and maintenance in the late 1990s owing to low copper prices.Previous work has been carried out by Falconbridge (Pty) Ltd. (1963-1964),King Resources of South Africa (1968-1969), Rio Tinto Zinc Corporation(1972-1975), Rand Merchant Bank Ltd. (1992-1993), and most recently by GreatFitzroy Mines NL (GFM) of Australia (1995-1998). The most recent feasibilitystudy work, undertaken in 1995-1997, focused on producing cathode copperutilizing a roast-leach-electro-winning process plant. In 1996, Behre Dolbearestimated the Haib Project resource at 244 million tonnes, grading 0.37% Cu,using a cut-off grade of 0.3% Cu. This equates to 2 billion pounds of containedcopper (net 1.2 billion pounds Cu to CRC based on 60% ownership), substantiallyincreasing CRC's total copper resource base. CRC intends to use the extensivegeological and metallurgical database available on the Haib Project to evaluatethe optimal process recovery method for project development. Under the terms of the Option Agreement, CRC can earn a 60% interest in the HaibProject by incurring initial expenditures of US$1.2 million and through theissuance of 120,000 CRC shares. With further expenditures of US$1.0 million CRCcan earn an additional 10% for a total of 70%. Thereafter, Deep South andAfri-Can have the option to contribute their share of the development cost or bediluted to a 10% non-contributing interest; under the latter scenario CRC canearn up to a 90% interest in the Haib Project through the further issuance of150,000 CRC shares Namibia is a politically stable country in which mining is a major contributorto GDP. The Namibian Government has indicated its strong support to advance theHaib Project to a point where a production decision can be made. Sir Sam Jonah, Chairman of CRC, commented: "The acquisition of the Haib Projectrepresents a low cost entry opportunity for CRC into a second major copperproject. The extensive drilling and metallurgical database available for theHaib Project is already at the standard necessary for a Bankable FeasibilityStudy. The next challenge for CRC will be to evaluate different processrecovery options and assess their relative economic merits. Once completed, CRCwill be able to make a final determination of the long term economic viabilityof the project." Funds raised by CRC from its recently completed IPO on the London AIM Exchangewill be used to complete a detailed Bankable Feasibility Study on its HinobaCopper Project in the Philippines over the next 12-18 months at an expected costof £3.1 million. With its cash position of approximately £9.2 million (i.e.£0.33/share), CRC is well-positioned to undertake work on the Haib Project andto evaluate other copper acquisition opportunities. 25th May 2005 For further information please contact: Copper Resources Nabarro Wells & Co. ODL Securities Mitchell Alland John Robertson Tony ClementsExecutive Vice Chairman +44 (0)787 569 5563 +44 (0)20 7710 7405 +44 (0)20 7903 6281 Copies of the M. Horn & Co. Research Report and AIM admission document areavailable from the Company's website, www.copperresources.com, or from ODLSecurities Ltd. Background Information on Copper Resources Corporation Copper Resources is the ultimate holding company of a group of mineralexploration, development and operating companies. The Group effectively has a92.5 per cent economic interest in the Hinoba-an Porphyry Copper Project (the "Project"), subject to a 3 per cent net benefits royalty payable to the originalclaimowner. The Project is located on the island of Negros in the Republic ofthe Philippines, approximately 700 km south of Manila. The Group's interest in the Project is held under an Integrated Mining andOperating Agreement with Colet Mining and Development Corporation, which holdsmining leases over 90 hectares and approximately 2,900 hectares of mineralclaims (collectively, the "Colet Claims"). The Colet Claims cover two knownporphyry copper deposits, the Don Jose deposit and the A1 deposit, whichcomprise the Hinoba-an property. Over the years, a significant amount of exploration and metallurgical testworkhas been performed on the Hinoba-an property with its previous owners havingspent approximately C$14.7 million. The Hinoba-an property has been subject toapproximately 48,000 metres of diamond drilling and 11,000 metres of reversecirculation drilling. Pre-feasibility studies indicate that the two depositsare well drilled and that all due attention has been paid to core handling,sampling and assaying. A scoping study undertaken in 1998 envisioned a 15 year mine life for the ColetClaims based on a geological resource of 254 million tonnes at 0.46 per centcopper at a 0.30 per cent copper cut-off. The study showed that the depositscould be profitably mined by open pit method with the ore processed in aconventional flotation milling operation to produce approximately 2 billionpounds of recoverable copper and other by-products. Annual production wasestimated at 56,000 tonnes of recoverable copper with an average cash cost(including smelting, refining and by-product credits) of US$0.48/lb of copper. The Company will complete additional infill core drilling on the property and afeasibility study within the next 18 months. Upon completion of the feasibilitystudy, and assuming favourable economics, the Group plans to develop a potential15 million tonnes per annum open pit copper mine on the Hinoba-an property. Thedevelopment of the Project will be dependent on obtaining future financing. In addition, the Copper Resources Group owns 23 unpatented lode claims coveringapproximately 186 hectares in the state of Colorado. The copper deposit on theproperty has historically been mined as an underground operation. The Groupplans to undertake exploration and evaluation on these claims within the nexttwelve months. The exploration and evaluation stage includes a drillingprogramme that will be commenced in early 2006. 25th May 2005 This information is provided by RNS The company news service from the London Stock Exchange