Tirex Resources Signs Definitive Agreement with Ekin Maden to Commence Copper and Gold Mining Production
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 09/06/11 -- Tirex Resources (TSX VENTURE: TXX) -
-- Ekin Maden is Turkey's leading non-ferrous metals and minerals trading
company since 1982 with significant mining and processing experience in
Albania
-- mining partnership to focus on six deposit areas of the Mirdita District
while Tirex continues exploration targeting discovery in other areas of
property
-- arrangement allows Tirex to move into copper and gold production with
zero share dilution
Tirex Resources ('Tirex') is pleased to announce it has signed a Definitive Agreement ('the Agreement') with Ekin Maden Tic. Ve San. A.S. ('Ekin Maden') to commence commercial production of copper and gold from six areas of the Mirdita District located in Albania. The Agreement allows Tirex to target significant cash flow through a quick transition into commercial production, without any corresponding share dilution relating to the financing of capital and operating expenditures.
The Agreement stipulates that Tirex will contribute six historically known mineral deposits to a newly formed operating company ('OpCo') in which Tirex and Ekin Maden will each hold an indirect 50 percent interest. OpCo will be managed by a technical team within Albania under the leadership of a Board of Directors that has equal representation from both Tirex and Ekin Maden. Funding of the Initial Phase and the Second Phase of development, as set out below, will be pursuant to approval of programs and budgets, with deadlock resolution by an independent Expert.
Key details of the Agreement are outlined below:
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Tirex Ekin Maden
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Contribution 6 Deposit Areas: Tuc, Paluca, 500 tpd mill capacity
to OpCo Qaf Bari, Letitna, Gurthi- (150,000 t/y)
Koshaj, and Fushe Arres Finance of:
Mine development capital
Operating capital
Mining equipment
Possibly new OpCo processing
facilities and all expansions
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Receives via 50% of net ore value less 50% of net ore value less
OpCo mining, processing and sales mining, processing and sales
cost cost
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Other Protection from cash calls for Receives a portion of
24 months through capital and concentrate as compensation
operating loan by Ekin Maden for processing and sales
to Opco services
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Ekin Maden will finance mine development capital, operating capital and mining equipment as well as contribute the mill capacity required by OpCo to commence production and sales. This mill capacity is made available to OpCo via Ekin Maden's existing mill and flotation plant complex located in Fushe Arres, owned by BERALB SH A., an affiliate of Ekin Maden, which has recently completed a major capacity expansion.
Under the terms of the Agreement, Tirex will transfer the six properties to OpCo and Ekin Maden will fund the capital and operating costs of reaching production. The initial six deposit areas targeted for production are Tuc, Paluca, Qaf Bari, Letitna, Gurthi-Koshaj and Fushe Arres.
The Agreement has been structured to expedite OpCo commencing production through a multi-stage process as follows:
Initial Phase of Production
Ekin Maden will fund the capital (and, if needed 24 months operating) costs of the Initial Phase in which OpCo will target to develop 500 tonnes production of ore per day. Ekin Maden, through BERALB, will perform ore processing and sales agency for OpCo.
The mill capacity required for the Initial Phase is in place and fully constructed and operational. This capacity will be dedicated for the use of OpCo under the terms of an Ore Processing Agreement and Sales Agency agreement between BERALB and OpCo. BERALB is entitled to a portion of the produced concentrate as compensation for processing and sales services. OpCo will receive the gross proceeds of the remaining concentrate sales less all repayment of any operating loan advances from Ekin Maden and the costs of production and sales.
OpCo will not be responsible for the repayment of any of the capital expenditures incurred by Ekin Maden to date relating to the construction of the BERALB mill. A maximum of 25% of OpCo net profits are earmarked to pay mine capital expenditure debt financed by Ekin Maden, in respect of the Initial Phase, with the balance being paid in 24 months of first ore delivery to BERALB.
Potential Growth (Second Phase)
Under the terms of the Agreement, OpCo will then enter into its second phase, targeting production of at least an additional 500 tonnes per day. The ore processing and sales agency arrangement will remain in place. Tirex (through OpCo) will participate in the ownership of any new OpCo processing facilities constructed to service the Second Phase production while Ekin Maden will have the obligation to fund or arrange financing for the construction of such facilities, if required. It is anticipated that future expansion of mill facilities would be required if OpCo's production profile exceeds 2000 tonnes per day, as targeted.
If expanded mill capacity is required under the Second Phase, then OpCo will have the option to participate in the profitability of the milling and processing of ore through direct processing facility ownership over and above the profitability targeted as miners during the Initial Phase.
Tirex Chief Executive Officer, Bryan Slusarchuk, states, 'Tirex is forging ahead in this unique opportunity to create a substantial copper and gold production profile with no corresponding shareholder dilution. As we grow the cash flow from our mining operations, we will continue to concurrently target the discovery of new economic ore bodies within the Mirdita District. We are proud to be working with Ekin Maden within the production process, a company with an outstanding track record as Turkey's leading non-ferrous metals trading group with well established mining interests in Albania.'
Ekin Maden Chief Executive Officer, Erol Kohen, states, 'Ekin Maden looks forward to creating a significant mining partnership with Tirex Resources on these deposits within the Mirdita District in Albania. The new OpCo will work to the highest international standards while creating significant benefits for the local communities, the country and stakeholders.'
The Agreement is subject to regulatory and European Bank of Reconstruction and Development approval.
Tirex Deposits
Current on-site assessment work is taking place at Fushe Arres, Tuc and Qaf Bari. While Tirex has not drilled these areas, the deposits are of significant interest due to past historical work and the existence of underground mine workings. According to early 1970s resource estimates (not National Instrument 43-101 ('NI 43-101') compliant) by the Albanian Geological Survey (AGS), the deposits at Fushe Arres totals 1,115,600 tons of 1.04% Cu, within which is a 267,000 tons zone near surface of 2.77% Cu, Qaf Bari totals 445,700 tons of 2.07% Cu and Tuc totals 2,072,000 tons of 1.54% Cu. It is the belief of the Tirex technical team, who now have more than 5 years of onsite experience drilling four separate areas within the District, that the Fushe Arres, Qaf Bari and Tuc deposit areas have room for significant expansion and importantly are prospective for precious metal exploitation. Tirex's advanced stage drilling at Koshaj, Gurthi and Letitna where thick zones of copper, zinc, gold and silver rich volcanogenic massive sulphide mineralization were encountered, has demonstrated that often historical deposit reports either omit or do not recognize gold, silver and zinc mineralization, having dominantly focussed on copper.
The early 1970's historical AGS calculations classify the deposit resources in a combination of C1 & C2 categories, being based on the Russian deposit reporting system and are roughly equivalent to the NI 43-101 inferred and indicated categories. These historical resources are not compliant with NI 43-101 and should not be relied upon. A qualified person within the meaning of NI 43-101 has not done sufficient work to classify the historical estimate as current mineral resources or reserves and additional work will be required to upgrade or verify the historical estimates. Tirex is not treating the historical estimates as current mineral resources or reserves but considers them important as a guide for future work in the District.
Modern Mining in Mirdita District
Ekin Maden is the only modern miner in the Mirdita VMS District of Albania, with current production at the Lak Roshi and Munelle deposits. Both Lak Roshi and Munelle were in production during Albania's communist era as were many of the deposits on Tirex's ground. Lak Roshi, Munelle and the six deposits being contributed by Tirex to the joint venture are Kuroko type VMS deposits with comparable copper and zinc grades.
About Ekin Maden Tic. Ve San. A.S.
Ekin Maden is a well-established, respected and privately held mining company whose principals have extensive expertise and experience in mining, metals trading and operations. Ekin Maden is the owner of the largest copper mine in Albania, namely BERALB SH. A. Ekin Maden was established in 1982 and is a leading Turkish company involved in lead, zinc, copper and chrome ore exporting, the importing of lead, zinc, aluminum metals and copper cathodes, mining, and mine finance. The annual turnover of Ekin Maden companies is approximately $1,000,000,000 USD.
John Nicholson, P.Geo., Mirdita Project Manager and a Qualified Person under the meaning of Canadian National Instrument 43-101, is responsible for the technical content of this news release.
Further details on Tirex Resources Ltd. and the Mirdita Project can be found on the Tirex website at www.TirexResources.com.
ON BEHALF OF TIREX RESOURCES LTD.
Bryan J.R. Slusarchuk, CEO and Director
Forward-Looking Statements. This Tirex News Release may contain certain 'forward-looking' statements and information relating to Tirex. Such statements include but are not limited to statements about the Agreement, the production arrangements and the timing of the mine development, mill construction and ore production. Often forward-looking statements or information include words such as 'plans', expects', 'intends', 'anticipates', 'estimates' 'forecasts', or variations of such words and phrases or statements that certain actions, events or results 'may', 'could', 'would', 'might' or will be taken occur or be achieved. Although forward-looking statements and information contained in this release are based on the beliefs of Tirex management, which we consider to be reasonable, as well as assumptions made by and information currently available to Tirex management, there is no assurance that the forward-looking statement or information will prove to be accurate. The assumptions made include assumptions about Tirex's ability to move forward with the arrangements as set out in the definitive agreement. The forward-looking statements and information contained in this release are subject to current risks, uncertainties and assumptions related to certain factors including, without limitations, obtaining all necessary approvals, feasibility of mine and plant development, exploration and development risks, expenditure and financing requirements, title matters, operating hazards, metal prices, political and economic factors, competitive factors, general economic conditions, relationships with vendors and strategic partners, governmental regulation and supervision, seasonality, technological change, industry practices, and one-time events as well as risks, uncertainties and other factors discussed in our quarterly and annual and interim management's discussion and analysis. Should any one or more of these risks or uncertainties materialize or change, or should any underlying assumptions prove incorrect, actual results and forward-looking statements and information may vary materially from those described herein. Accordingly, readers should not place undue reliance on forward-looking statements and information contained in this release. We undertake no obligation to update forward-looking statements or information except as required by law.The six mineral deposits which Tirex will contribute to OpCo are historical in nature, and Tirex has not reported any mineral resource (as defined in NI 43-101) and there are no NI 43-101 compliant technical reports prepared in respect thereto.
'Neither the 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 news release.'
Contacts:
Tirex Resources Ltd.
Bryan J.R. Slusarchuk
CEO and Director
604-687-7160 or Toll Free: 1-877-687-7160
604-687-7165 (FAX)
info@TirexResources.com
www.TirexResources.com