TORONTO, ONTARIO (FRANKFURT: GDQ)(BERLIN: GDQ) ("the Company")
is pleased to announce it has entered into a joint venture
agreement with its Brazilian partner, Alto Tocantins Mineralcao
Ltda (ATML) related to the Serra do Navio manganese property and
the Matapi iron prospects.
The agreement establishes two new companies registered in Brazil
that will hold the titles for the mineral concessions - one company
for manganese assets, the other for iron assets. The agreement
stipulates that exploration of the properties will be directed by
Ecometals. Upon commencement of commercial production, the
enterprise will be governed by a three person board of directors,
of which Ecometals will have two representatives and Alto Tocantins
will have one representative.
"We are very pleased to have established this joint venture for
two great projects, in a world class mineral province," said Fran
Scola, Chief Executive Officer of Ecometals. "What is so exciting
about these projects is the ability to commence production in the
near term in an area that already has excellent existing
infrastructure."
Terms of the agreement concerning the two enterprises are
described below.
Manganese Company
Ecometals owns 66% and ATML holds 34% of the Serra do Navio
manganese property, which hosts a past-producing mine. ATML's
ownership is free carried (ie. held without paying operating costs)
until commercial production is achieved. Ecometals has the option
to purchase from ATML an additional 14% interest in the manganese
assets for US$6 million for a period of 4.5 years from the
commencement date of the agreement. Ecometals also has a second
option with a 7.5 year term to purchase an additional 10% interest
for US$15 million.
The Serra do Navio property is situated 195 km northwest of Port
Santana and is connected to the port by road and rail. During its
34 years of operation, Serra do Navio was one of the world's
largest producing manganese mines. Operating continuously from 1963
to 1997, it produced in excess of 30 million tonnes of high-grade
manganese ore.
There are three components to the Serra do Navio project:
- Stockpiled, previously mined manganese ore at Port
Santana;
- Stockpiled, previously mined manganese ore at the mine
site;
- In situ oxide and carbonate manganese ore that was not
mined.
"The stockpiled, previously mined manganese ore at Port Santana
is ready to ship," said Mr. Scola. All the previously mined ore at
both locations is 100%-owned by Ecometals.
Ecometals has historical resource data for Serra do Navio that
are not compliant with National Instrument 43-101. The Company
intends to conduct new exploration studies during 2008, working
toward a fully compliant resource estimate.
The estimated 2008 exploration budget for the Serra do Navio
concession area is US$2.9 million and consists of three
components:
- Resource estimation for the stockpiled, previously mined ore
at Port Santana and the mine area;
- Metallurgical test work on the stockpiled, previously mined
ore;
- Drill testing of the F-12 primary manganese deposit.
Exploration activities will be managed by Metal Data SA
consultants, who will coordinate the work undertaken by other
contracting groups.
Iron Ore Company
Ecometals will pay US$2 million to ATML for 60% ownership in 11
new mineral concessions, which have an area of 64,152 hectares
(64.1 sq. km.). These concessions are new to Ecometals and are not
part of the existing Matapi iron project. In addition, Ecometals
and ATML have established that Ecometals owns 60% of the Matapi
iron project, which is being transferred into a new company. The
remaining 40% interest in the new company will be held by ATML,
which is free carried to commercial production. Ecometals has a
five-year option to purchase an additional 20% interest from ATML
in the iron assets for US$8 million. Ecometals has a second
seven-year option to purchase an additional 10% interest for US$15
million. Ecometals has agreed to pay ATML a production royalty of
US$0.25 per tonne of iron ore FOB.
The Matapi iron project is situated approximately 90 km
north-northwest of Port Santana, in the northern portion of
Ecometals' concession areas, totalling 94,514 hectares (94.5 sq.
km.). The Matapi project area is located six km west of the
railroad line and most of the Company's iron concessions can be
accessed by road. The iron potential of Amapa State has only been
recently recognized. Several iron deposits are in the same region
as the Matapi iron project, including the MMX Amapa mine, Solida
mine and Vila Nova deposits. The MMX Amapa and Vila Nova deposits
and the Matapi iron project are all sedimentary banded iron
formation within the Archean age Vila Nova Formation.
Regional aeromagnetic data indicate the banded iron formation at
Matapi has a combined strike length of six km. Virtually no
exploration has been undertaken in the concession area, apart from
29 drill holes completed in a small area by Tocantins at the Matapi
iron project.
Due to a lack of bedrock exposure, regional aeromagnetic data
have been very useful in defining the overall distribution and
structural controls for the iron mineralization. A number of
priority magnetic targets have identified in the Company's
concession area and will be explored in detail in 2008.
The estimated 2008 exploration budget for the Matapi concession
area is US$2.2 million. The program includes ground magnetic
surveys, pitting and diamond drilling on the Matapi project and
other priority anomalies. In addition to the field activities, the
Company will engage Metal Data SA consultants to carry out economic
modelling and metallurgical test work on the Matapi iron
mineralization.
Qualified Person
Steven R. McMullan, P.Geo, Vice President of Exploration for
Ecometals Limited, is a Qualified Person as defined by National
Instrument 43-101 and has supervised the preparation of the
technical information and verified the data reported in this news
release. Mr. McMullan has reviewed and approved this news release
for public disclosure.
About Ecometals
Ecometals Limited is a Canadian-listed mineral exploration and
development company focused on mineral resources in Latin America.
Ecometals also holds 44.4% of Atomaer Holdings Pty Ltd., a private
Australian holding company.
Cautionary Statement Regarding Forward-Looking Statements
Some of the statements contained in this release are
forward-looking statements, such as statements that describe
proposed exploration activities and expenditures at Serra do Navio
and Matapi and the anticipated commencement of commercial
production at Serra do Navio and Matapi. Since forward-looking
statements are not statements of historical fact and address future
events, conditions and expectations, forward-looking statements by
their nature inherently involve unknown risks, uncertainties,
assumptions and other factors well beyond Ecometal's ability to
control or predict. Actual results and developments may differ
materially from those contemplated by such forward-looking
statements. Material factors that could cause actual results to
differ materially from those contained in such forwarding-looking
statements include, among other things, fluctuations in manganese
and iron prices; procurement of required capital equipment and
operating parts and supplies; equipment failure; unexpected
geological or hydrological conditions; inability to enforce legal
rights; defects in title; success of future exploration and
development initiatives; competition; operating performance of the
facilities; environmental and safety risks including increased
regulatory burdens; weather and other natural phenomena; the
speculative nature of exploration and development, including the
risks of obtaining necessary permits and approvals from government
authorities; operating hazards, and availability of labor,
materials and equipment; changes in governmental laws, regulations,
economic conditions; changes in national and local government
legislation, taxation, controls, regulations, policies and
political or economic developments. These forward-looking
statements should not be relied upon as representing Ecometals'
views as of any date subsequent to the date of this release. There
can be no assurance that forward-looking statements will prove to
be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on any forward-looking
statements.
A map showing concessions of Ecometals and other mining
companies in Brazil can be viewed in a pdf version of this news
release posted to the Ecometals website.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
Contacts: Ecometals Limited Mark Kesselman Chief Financial
Officer Email: info@ecometalslimited.com Website:
www.ecometalslimited.com Barnes McInerney Inc. Colin Languedoc
Senior Consultant (416) 367-5000 (416) 367-5390 (FAX) Email:
clanguedoc@barnesmcinerney.com
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