Boxxer Acquires Option to Purchase 65% of Philippines Gold ProjectPublished by MAC on 2007-05-07
Boxxer Acquires Option to Purchase 65% of Philippines Gold Project
7th May 2007
CALGARY, ALBERTA - Boxxer Gold Corp. (TSX VENTURE:BXX) is pleased to announce that it has executed a letter agreement with ElDore Mining Corporation Limited ("EDM"), an arm's length third party, providing for the entering into of an option agreement to purchase a 28% direct equity interest (the "Option") and the assumption of the opportunity to acquire a further 37% farm-in joint venture equity interest (the "JVA Rights") for a total undivided 65% interest in the Nalesbitan gold project (the "Property") located in the Province of Camarines Norte, within Barangay Dumagman, Municipality of Lobo, Republic of the Philippines.
The Property comprises a contiguous block of 14 mining claims covering 1,184 hectares (approximately 2,800 acres) and is located approximately 300 kms. east-southeast of Manila, on the Bicol Peninsula on the country's main island of Luzon.
The proposed terms and conditions to acquire EDM's equity interest in the Property and the JVA Rights are:
1. Boxxer will assume (by novation) EDM's farm-in rights to the joint venture and the obligations to spend the balance of US$7,000,000 remaining under the farm-in joint venture agreement to earn a 37% interest:
2. Boxxer will acquire EDM's 28% direct Property equity interest by payment of the following cash obligations:
i) a non-refundable payment of US$25,000 to the remaining JV participants Sagacity Holding New Zealand and Eldore Philippines for waiver of their rights of first refusal to allow EDM to transact with Boxxer and for an exclusive 60 day period to complete site visits and technical, financial and legal due diligence
ii) a non-refundable advance of US$40,000 to assist EDM's Philippines incorporated operations company, Nalesbitan Mining Philippines Inc. ("NMPI"), in meeting its financial commitments over the 60 day Property due diligence period.
iii) Payment of US$3,000,000 to EDM, which represents EDM's investment in the Property to date, and an additional US$3,000,000 bonus. The total payments (the "Payments") to EDM would be approximately US$6,000,000, less the expenditures incurred by Boxxer duing the due diligence period, to be paid as outlined in (iv).
iv) the schedule of Payments related to the exercise of the Option will be as follows:
(a) US$50,000 cash payment on signing the Option agreement;
(b) US$100,000 cash payment on completion of a positive feasibility study on the Property
(c) US$250,000 cash payment on the Option being exercised and full transfer of the 28% equity interest;
(d) US$250,000 cash payment on reaching commercial production, and
(e) thereafter US$250,000 per quarter until full payont of the US$6,000,000.
3. A condition precedent to entering into the Option agreement is Boxxer completing a C$1.5 million financing. Boxxer can extend the original 60 day due diligence period for an additional 60 days by making a further US$40,000 cash advance to assist NMPI to cover its obligations.
4. EDM is required to obtain all shareholder and regulatory approvals, if required, in relation to Boxxer's exercise of the Option.
A considerable amount of exploration and development has been completed on the Property over the past 20 years. The Property is underlain by variably altered volcanics and is considered to have potential for epithermal gold-silver mineralization and porphyry related copper-gold-silver molybdenum mineralizatioin. The main area of surface gold-silver mineralization located within the Project is referred to as the Nalesbitan Hill Gold Deposit.
In August 2005, RobSearch Australia Pty Limited, under the direction of Mr. J.M. Blumer; BGenSc, MSc, FAusIMM(CPGeo), MAIG, MMICA, completed a report on the Project for inclusion in a Prospectus filed by EDM for listing of its shares on the Australian Stock Exchange. The report was prepared to conform with the VALMIN and JORC codes of the Australian Institute of Mining and Metallurgy/Australian Institute of Geoscientists, which relate respectively to Expert Reports and the reporting of Mineral Resources and Ore Reserve estimations.
The RobSearch report included the following statement, "Thus an earlier estimate by RobSearch that the Millsite-Singko lode has an exploration target potential to 150 m vertical depth of 1.5 million ozs. gold with a possible grade of 1.5 to 3.0 g/t gold and copper mineralization could well be confirmed by the current drilling program. It should be noted, however, that this exploration target is conceptual and it is uncertain of the current drilling program will result in discovery of a Mineral Resource on the property."
The potential quantity and grade of the "exploration target" are conceptual in nature. There has been insufficient exploration to define a resource and it is uncertain if future exploration will result in the target being delineated as a mineral resource. The basis for the potential quantities and grade are historical and based on diamond drill reverse circulation drilling and trenching results.
It is expected that Boxxer's due diligence should be completed by July 2007. Assuming that Boxxer proceeds with the proposed transaction, Boxxer plans to commence a diamond drilling program and continue metallurgical testwork with the view to completion of a feasibility study on the Nalesbitan Hill Gold Deposit. Mr. Elmer Stewart, P.Geol., a director of Boxxer and a Qualified Person pursuant to National Instrument #43-101, Standards for Disclosure for Mineral Projects, has reviewed the technical information disclosed in this news release.
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Boxxer Gold Corp. Colin Christensen
(403) 503-0822 (FAX)