Minotaur Exploration Limited Two Joint Ventures Arranged with Alliance Partner

10:41 AEST July 15, 2013 ABN Newswire (C) 2004-2013 Asia Business News PL. All Rights Reserved.

Adelaide, Australia (ABN Newswire) - Minotaur Exploration Limited (ASX:MEP) has cemented its recently established alliance with a private equity company ('Investor') through the creation of two new joint ventures. This development builds on Minotaur's announcement to ASX dated 14 June 2013 of an initial alliance transaction relating to Minotaur's acquisition (note 1) of Breakaway Resources Ltd's Scotia gold tenements near Kalgoorlie (completion of which is pending).


HIGHLIGHTS

An agreement executed today with the Investor triggers two separate joint ventures in the event Minotaur's off-market takeover bid for Breakaway Resources Ltd (ASX: BRW) is successfully concluded, namely:

- a new exploration joint venture over BRW's Eloise regional tenements (Eloise JV), earning up to 50% for exploration expenditure of $6 million within 4 years; and
- a new exploration joint venture over BRW's Leinster regional tenements (Leinster JV), earning up to 50% for exploration expenditure of $3 million within 3 years.

Minotaur and Investor (Alliance parties) formed an Alliance in June 2013 to seek joint venture exploration and acquisition opportunities in gold and copper-gold provinces around Australia.

The agreement provides a mechanism for the two exploration joint ventures to commence following successful completion of Minotaur's proposed off-market takeover bid for Breakaway (Bid Note:2).

The proposed joint ventures are between Investor and the relevant subsidiaries of Breakaway which hold the applicable tenure.


ELOISE JV

The proposed Eloise JV covers Queensland tenements EPM17838, EPM18442, MDL431 and MDL432 (515 km2), but excluding those areas subject to a joint venture between Breakaway, its wholly owned subsidiary Levuka Resources Pty Ltd and Sandfire Resources NL (the Altia joint venture - note:3).

The Alliance parties consider the tenements to be prospective for iron oxide copper-gold (IOCG) mineralisation.


Main terms of the Eloise JV are:

- joint venture will be initiated when and only when Minotaur's bid for Breakaway successfully completes

- minimum expenditure of $1,700,000 within 12 months (Investor earns 14%)

- an agreed work program accommodates the minimum expenditure requirement

- Stage 2 expenditure of $1,300,000 within further 12 months (Investor earns a further 11%)

- Stage 3 expenditure of $3,000,000 within further 24 months (Investor earns a further 25%)

- In total, Investor may earn 50% beneficial interest in the tenements by sole funding $6,000,000 within 4 years

- Minotaur will be the Operator and Manager of the joint venture.


LEINSTER JV

The proposed Leinster JV covers tenements in the goldfields of Western Australia. It comprises 3 Exploration Licences, 9 Mining Licences and 5 Prospecting Licences covering 270 km2. Norilsk Nickel Australia Pty Ltd retains a 2.5% Net Smelter Return royalty on any ore containing Ni, Cu or PGE elements for which payment is received from production4.

The Alliance parties consider the tenements to be prospective for gold mineralisation. The tenements are listed in Table 1.


Main terms of the Leinster JV are:

- joint venture will be initiated when and only when Minotaur's bid for Breakaway successfully completes

- minimum expenditure of $900,000 within 12 months (Investor earns 15%)

- an agreed work program accommodates the minimum expenditure requirement

- Stage 2 expenditure of $600,000 within further 12 months (Investor earns a further 10%)

- Stage 3 expenditure of $1,500,000 within further 12 months (Investor earns a further 25%)

- In total, Investor may earn 50% beneficial interest in the tenements by sole funding $3,000,000 within 3 years

- Minotaur will be the Operator and Manager of the joint venture.

For details, refer Breakaway Resources Ltd release to ASX dated 30 May 2013, Breakaway released from claw-back and pre-emptive rights.


Table 1: Leinster Project Tenements

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Tenement ID Location
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E37/0761    MT CLIFFORD
E37/0909    MT CLIFFORD
M37/0806    MT CLIFFORD
P37/7170    MT CLIFFORD
P37/7370    MT CLIFFORD
P37/7371    MT CLIFFORD
P37/7372    MT CLIFFORD
P37/7373    MT CLIFFORD
E36/0235    WILDARA
M36/0475    WILDARA
M36/0502    WILDARA
M36/0524    WILDARA
M36/0526    WILDARA
M36/0548    WILDARA
M37/0877    WILDARA
M37/0878    WILDARA
M36/0511    YILLAREE JV
------------------------

COMMENT

Andrew Woskett, Minotaur's Managing Director, said:
'These joint venture agreements confirm the commercial benefit of the recently formulated Alliance.

Minotaur is honoured that the Investor has again placed its trust in our abilities to deliver value through exploration activity and by so doing tangibly support Minotaur's bid for Breakaway.

'Most importantly, this funding arrangement assures Breakaway shareholders that, should Minotaur's bid be successful, immediate 'in-the-ground' activity will start on drill targets identified by Minotaur's exploration team, on Breakaway's tenements. Subject to exploration success, that should result in discovery upside for Breakaway shareholders transitioning into Minotaur through their acceptance of the bid.

'It provides a mechanism for Minotaur to unlock value through shared risk and reward and substantiates the value proposition for the proposed change of control transaction.

'Minotaur's Board believes that this type of exploration funding model is entirely suited to the current equity climate. We believe that consolidating Breakaway's assets into the Minotaur group and then funding activity on Breakaway ground through the strategic participation of our Alliance Investor represents a good tri-partite win for all parties involved.'

Notes:
1 Refer Minotaur release to ASX dated 20 May 2013 Minotaur acquires Scotia tenements from Breakaway.
2 Refer Minotaur release to ASX dated 15 July 2013 Recommended Takeover Offer for Breakaway Resources.
3 Sandfire Resources may earn 60% by spending $4,000,000 or 80% by spending $8 million over the Altia Pb-Zn-Ag joint venture project area.




About Minotaur Exploration Limited:

Minotaur Exploration Limited (ASX:MEP) specialises in application of cutting-edge geophysical techniques to locate virgin mineralisation deep below the surface. Often, economic mineral deposits are contained within basement rocks, buried below several hundred metres of transported cover (overburden) and cannot be located through surface exploration methods such as soil sampling, geochemical assays and drilling. Minotaur’s remote sensing and interpretative approach has proven very successful.

The directors and management of Minotaur each have around 30 years of exploration, mining and mineral resource experience and are eminently qualified in their respective fields of expertise. Under their direction, Minotaur has earned a strong reputation for technical excellence and a high profile within the Australian resources sector.

Minotaur is actively exploring IOCG style targets in Australia, where geophysics have identified numerous sub-surface anomalies prospective for copper-gold mineralisation. Each of these represents a possible Prominent Hill type orebody. Numerous other targets that are ready for drilling are prospective for base metals such as zinc, lead, copper.



Contact:

Minotaur Exploration Limited
T: +61-8-8366-6000
F: +61-8-8366-6001
E: admin@minotaurexploration.com.au
WWW: www.minotaurexploration.com.au