Minotaur Exploration Ltd. Announces Two New JVs To Spend AU$9M In Wake of Today's Takeover Offer For Breakaway

11:02 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 backed up its proposed takeover of Breakaway Resources Limited (ASX:BRW), announced today, with a separate round of deals likely to see $9 million injected into immediate copper and gold exploration work on Breakaway-owned assets in both Western Australia and Queensland.

The two proposals -Minotaur led joint ventures under the Company's recently announced alliance with a new private equity cornerstone investor - could see major work commence on the ground at Leinster in WA and Eloise in Queensland, as early as October.

The joint venture cash injection will be triggered immediately shareholders of Perth-based Breakaway approve the separate takeover of the company by Adelaide-based Minotaur.

Minotaur's Managing Director, Mr Andrew Woskett, said in announcing the two JV deals today, that it 'delivers a triple whammy' of growth for Minotaur in line with its strategy to emerge as a fully fledged pure copper-gold and gold play focused on high potential copper and gold fields in renowned mineralised provinces.

'Minotaur's exploration team has identified and prioritised drill targets at both the Eloise (copper-gold) and Leinster (gold) projects. We have backed this up with a funding commitment, subject to the Breakaway takeover completing, from our Alliance partner that will deliver the exploration intensity best able to elevate both projects to realisation' Mr Woskett said.

Under an agreement executed today between Minotaur and its Alliance investor, a new exploration joint venture over BRW's Eloise regional tenements will see the investor earn up to 50% interest in the Eloise tenure through spending $6 million on exploration over the next four years.

A second new Minotaur-Alliance joint venture will see the investor earn up to 50% interest in BRW's Leinster regional tenements through spending $3 million on exploration over 3 years.

The move is the first significant deal between the two since Minotaur and the investor formed their Alliance in June to seek joint venture exploration and acquisition opportunities in gold and copper-gold provinces around Australia.

The Alliance last month executed a smaller deal to acquire Breakaway's 14-tenement 160km2 Scotia project, 65km north of Kalgoorlie in Western Australia, for $600,000.That deal is going through final settlement.

The proposed Eloise JV covers Queensland tenements EPM17838, EPM18442, MDL431 and MDL432 (515 km2), but excludes those areas subject to a joint venture between Breakaway and Sandfire Resources NL (the Altia Joint Venture).

Mr Woskett said the Alliance parties consider the Eloise tenements to be prospective for iron oxide copper-gold (IOCG) mineralisation.

The first year work program requires minimum expenditure by the Alliance partner of $1.7 million for their initial 14% stake.

The Alliance's proposed Leinster JV is over tenements in the goldfields of Western Australia, comprising 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 Ni, Cu or PGE elements in ore processed.

Mr Woskett said the tenements are evidently gold prospective and the Alliance partner will spend a minimum $900,000 on exploration in the first 12 months to earn their initial 15% interest.

Minotaur will operate and manage both Alliance joint ventures.

'These new JVs confirm the commercial benefit of the recently formed Alliance and, importantly, also reassure Breakaway shareholders that should Minotaur's takeover bid for their company be accepted, immediate 'in-the-ground' activity will start on drill targets on Breakaway's tenements.

'Subject to exploration success, that should result in discovery upside for Breakaway shareholders making the transition into Minotaur through their acceptance of our offer. 'It also 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.'

Mr Woskett said Minotaur firmly believed the nature of the exploration funding model was 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,' he said.

Minotaur announced earlier today that it will offer one Minotaur share for every 10 Breakaway shares for a minimum of 90% of Breakaway's scrip - an offer representing a 33.4% premium to the target company's volume weighted average share price over the past month.

At full acceptance, Breakaway shareholders will hold 28.7% of the enlarged Minotaur group.

On a 30 June 2013 pro-forma basis Minotaur will have a market capitalisation of around $19 million, cash and listed investments of about $10 million and consolidated ground holdings in Australia totalling 18,347km2.



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:

Andrew Woskett
Minotaur Exploration Limited
TEL: +61-8-8132-3400
or +61-458-555-470

Kevin Skinner
Field Public Relations
TEL: +61-414-822-631