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May 03, 2000
Goldfields Limited Options Tiris Project And Mindoro Appoints New Director
Tony Climie, President of Mindoro Resources Ltd. ("Mindoro") is pleased to announce that Mindoro has granted to Goldfields Limited of Australia ("Goldfields") the option to farm-in to Mindoro's Tiris Project in Sumatra, Indonesia (the "Project"). Subject to a 60 day due diligence period, government and board approvals, Goldfields will have the exclusive right to negotiate a full Joint Venture Agreement whereby Goldfields can earn up to a 70% interest in the Mindoro subsidiary company holding the Project rights as follows:
STAGE 1: Goldfields may earn a 51% interest by spending A$2.5 million (approximately Cdn$2.2 million) on exploration within 3 years of execution of the Joint Venture Agreement. A minimum A$500,000 must be spent within 12 months of the execution of the Joint Venture Agreement. Goldfields will retain no interest if it withdraws before expenditures of at least A$2.5 million. Goldfields will also reimburse Mindoro's outstanding US$75,000 refundable security deposit that is posted with the Indonesian government.
STAGE 2: Goldfields has the option to spend a further A$2.5 million on exploration over 3 years to earn an additional 19% interest in the Project. Once Goldfields has earned its final interest level (either 70% or 51%), a joint venture will be constituted.
STAGE 3: Mindoro may contribute its pro-rata share to the joint venture (49% or 30%) or dilute to a level of 15%, at which time Goldfields will fund all project costs up until a decision to mine. Once a decision to mine is made, Mindoro can either elect to contribute its share of development and capital costs or convert to a gross royalty. The gross royalty being 2% where quarterly average London fixing gold price is less than US$350 and 2.5% where the gold price is US$350 or greater.
While it is solely funding expenditures, Goldfields will be project operator and also the first Manager of the joint venture. Goldfields will utilize Mindoro's experience in technical and operating matters within Indonesia.
Goldfields is a major Australian gold miner that produced 500,000 ounces of gold in 1999 from interests in four operating gold mines, including an 87.5% interest in the Paddington mine in Australia and 25% interest in the world class Porgera mine in Papua New Guinea. The South African company, Harmony Gold Mining Co. Ltd., sixth largest gold producer in the world, recently acquired a 19.95% interest in Goldfields. The joint venture will, therefore, bring considerable financial backing and technical expertise to the Tiris Project.
Mindoro, through its wholly-owned local companies, currently has a 100% interest in the Tiris Project which covers 10,000 hectares in the Lebong Gold District of Sumatra, Indonesia. The principal target on the Project is the Harimau Prospect, a very large and strong epithermal gold-silver system, containing multiple zones of gold-silver mineralization, that has been defined over an area in excess of two by five kilometers. Gold grades in excess of 1 gram per tonne (g/t), and up to 10.6 g/t, from outcrop and float, are widely distributed across the prospect. Silver values range up to 520 g/t.
Mindoro management believes the entry of this strong partner confirms the promise and potential of the Tiris Project, as well as indicating returning investor confidence in Indonesia's extraordinary mineral potential.
NEW DIRECTOR APPOINTED
Tony Climie is also pleased to announce the appointment of Brian Farrell, C.A., to Mindoro's Board of Directors. Mr. Farrell brings to the Board over twenty years of accounting and audit experience, including an extensive background in management and financial consulting. Mr. Farrell, who is currently a partner with Kingstone Ross Pasnik, has also been appointed to the Audit Committee, where his expertise will assist in guiding and strengthening the Board's financial stewardship of Mindoro.
Mindoro is a Canadian mineral exploration company focusing on gold and gold-copper exploration in the Asia Pacific region. Tiris is one of its four core projects. The other three projects are in the Philippines, where Mindoro is planning to drill the Pan de Azucar gold-copper prospect in the near future, commence a resource delineation drill program on its Agata Project later in 2000, and trench the near-by Tapian Project to bring this project to the drill stage. Mindoro trades on the Canadian Venture Exchange under the symbol MIO.
For further information, contact Penny Gould, Executive Vice President
Phone: (780) 413-8187
Fax: (780) 426-2716
The Canadian Venture Exchange has neither approved nor disapproved the information contained herein.
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