Orex Minerals Inc. and Fresnillo Plc Sign Association Agreement to Explore Coneto Gold-Silver Project in Durango, Mexico
VANCOUVER, BRITISH COLUMBIA–(Marketwire – Feb. 2, 2012) – Orex Minerals Inc. (TSX VENTURE:REX) ("Orex") is pleased to announce that it has signed a definitive Association Agreement with Fresnillo Plc (LSE:FRES) ("Fresnillo") to explore and develop as one large project their respective mineral concessions in the Coneto gold-silver mining district in northern Durango State, Mexico.
Together, Orex and Fresnillo hold extensive contiguous mineral concessions totaling over 17,600 hectares in the heart of the historic Coneto mining district. These concessions cover more than 40 known mineralized epithermal quartz veins. The project will be managed by a technical committee in which both Orex and Fresnillo will have representation.
Gary Cope, President of Orex, says, "We are very excited about entering into an agreement with Fresnillo to advance the Coneto gold-silver project. Entering this agreement was a logical step, as both companies will bring land and expertise to the project and Fresnillo will contribute exploration funds. Fresnillo's management is also showing their confidence in Orex by taking an equity position in Orex. We are looking forward to successful exploration together at Coneto."
David Giles, Vice-President Exploration of Fresnillo Plc states, "We are pleased to have signed an agreement with Orex to evaluate the Coneto property using the combined experience of our exploration teams."
Terms of the Coneto Association Agreement
- Fresnillo will spend a minimum of US$2 million on exploration during the first year after the necessary exploration permits are obtained. A minimum of 70% of this exploration must be conducted on Orex's concessions.
- Fresnillo will have the option to spend an additional US$2 million per year on exploration for each of the following two years. A minimum of 70% of this exploration must also be conducted on Orex's concessions.
- Upon Fresnillo spending an aggregate of US$6 million on exploration activities, Orex and Fresnillo will each contribute their respective Coneto mining concessions to a new company (NewCo) that initially would be owned 55% by Fresnillo and 45% by Orex.
- Fresnillo will have the right to increase its ownership of NewCo to 70% by either completing a prefeasibility study or spending up to an additional US$21,000,000 in the process of preparing a prefeasibility study.
- If Fresnillo chooses to not exercise the right to increase its ownership of NewCo to 70%, the costs incurred to complete a prefeasibility study will be shared by Fresnillo and Orex in proportion to their ownership of NewCo; 55% by Fresnillo and 45% by Orex.
- Any additional funding required by NewCo will be provided by Orex and Fresnillo in proportion to their respective ownership interests in NewCo at that time.
- Fresnillo will have a right of first refusal to acquire Orex's ownership interest in NewCo if Orex receives an offer for its interest in NewCo that it proposes to accept.
- During the life of the Association Agreement, in the event that Orex, or any of its subsidiaries, enters into a transaction to acquire an interest in any additional mineral properties in Mexico and then later decides to sell or option out that interest to a third party, Fresnillo will have a right of first refusal to participate in such transaction on the same terms and conditions as offered to the third party.
About Orex Minerals Inc.
Orex Minerals Inc. is a junior mineral exploration company, comprised of highly qualified mining professionals with a focus on the exploration of prospective gold and gold-silver properties in Sweden and Mexico.
About Fresnillo PLC
Fresnillo Plc is the world's largest primary silver producer and Mexico's second largest gold producer, listed on the London Stock Exchange under the symbol FRES. Fresnillo has five producing mines, three development projects and five advanced exploration prospects, all of them in Mexico, as well as a number of other long term exploration prospects. In total, it has mining concessions covering approximately 2.1 million hectares in Mexico. Fresnillo has a strong and long tradition of mining, a proven track record of mine development, reserve replacement, and production costs in the lowest quartile of the cost curve for both silver and gold. Fresnillo's goal is to maintain its position as the world's largest primary silver company, producing 65 million ounces of silver and over 400,000 ounces of gold by 2018.
Ben Whiting, P.Geo., is the Qualified Person as defined in NI43-101 and takes responsibility for the technical disclosure in this news release.
ON BEHALF OF THE BOARD OF DIRECTORS
Gary Cope, President
This News Release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties including the non-consummation of the transactions herein contemplated. Actual results may differ materially from those currently anticipated in such statements and Orex undertakes no obligation to update such statements, except as required by law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.