Arco Resources Corp.
TSX VENTURE : ARR

Arco Resources Corp.

December 02, 2009 09:30 ET

Arco Options Three Properties in Oaxaca, Mexico to Silex Ventures

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 2, 2009) - Arco Resources Corp. (TSX VENTURE:ARR) ("Arco" or the "Company") is pleased to announce that it has entered into an agreement in principle with Silex Ventures Ltd. ("Silex") dated November 30, 2009 (the "LOI") under which it will grant Silex the right to acquire up to a 100% interest in three of Arco's claim blocks, including the Lachiguiri property (together, the "Properties"), all located in Oaxaca, Mexico (the "Proposed Acquisition").

Silex is a capital pool company incorporated in British Columbia, and intends for the Proposed Transaction to constitute its Qualifying Transaction as such term is defined in the policies of the TSX Venture Exchange (the "Exchange"). The Proposed Acquisition is a non-arm's length transaction, as the two companies have a common director. Upon completion of the Proposed Acquisition, Silex expects to be a Tier 2 Mineral Exploration Issuer.

Pursuant to the terms of the LOI, Silex will earn a 90% interest in the Properties over a three-year period in consideration for total cash payments of $250,000 and 3,000,000 common shares of Silex, subject to Exchange approval. Silex has also agreed to reimburse Arco for tax payments of 120,584 Mexican Pesos due on the Properties in January of 2010. The remaining 10% interest in the Properties will remain with Arco as a carried interest. Silex may elect at any time during the term of the option to purchase Arco's 10% carried interest in the Properties for $1,000,000. Once such election is made, Silex will have one year to pay this amount.

Concurrent with the Proposed Acquisition, Silex will undertake a financing (the "Financing") for gross proceeds of not less than $1.5 million to fund exploration programs on the Properties.

Summary of Significant Assets

Paul Cowley, P.Geo. and Chief Geologist for Arco Resources Corp., is the Qualified Person, as defined in National Instrument 43-101, who has reviewed and approved the technical content of this news release.

The Properties consist of the Lachiguiri, Silacayoapan and Nino Perdido properties. The Lachiguiri Property is of primary interest to the Proposed Acquisition. A technical report under National Instrument 43-101 was prepared for Arco and filed on SEDAR on May 20, 2009 detailing this property and a two-phase exploration program recommended by the authors, Dale Schultz, M.Sc., P.Geo., and Richard Culbert, Ph.D., P.Eng.

Lachiguiri Property

The Lachiguiri property comprises 4200 hectares, located approximately 140 kilometers southeast of the City of Oaxaca, near the town of Santiago Lachiguiri. It consists of the Pochotle and Pochotle II claims, which are each 100% owned by Arco Exploraciones, S.A. de C.V., a subsidiary of Arco.

Near the center of this property, a cluster of old workings focused on the silver-rich lead and zinc sulfide mineralization that appears to occur in shoots within a laterally continuous silicified zone related to a fault near the contact between a massive limestone and a younger conglomerate unit. The silicified zone exhibits typical epithermal precious metal textures. Dump sampling from the old workings include values between 133 and 1510 grams per tonne (gpt) silver. The higher grades of silver are associated zinc-lead-arsenic-moly-copper mineralization that sporadically occurs along 2 kilometres of strike length. Collectively, twenty-nine of 564 rock samples collected by Arco's Mexican subsidiary in 2005 and 2006 returned silver values between 214 and 1510 gpt. In addition to this locality, other areas of silicification with similar epithermal vein textures are present and unexplored on the property. The property appears to have potential for both disseminated and bonanza-grade mineralized shoots.

A revised technical report on the Lachiguiri property (the "Technical Report") is being prepared for Silex under National Instrument 43-101. The Company will issue a further news release on completion of this Technical Report.

Silacayoapan

The 33,587 hectare Silacayoapan property located in the western part of the state covers multiple known vein systems. In the Oaxaca State Geology and Mining Monograph dated 1996, at least 4 vein systems are present, two of which are the Providencia and Soledad vein systems. Providencia is documented as a hydrothermal vein system with grades in the order of 16 gpt gold and 130 gpt silver. The Soledad vein system is documented as a hydrothermal vein system with copper grades in the order of 3%. Arco has not confirmed these grades quoted in the Monograph. The property has the benefit of a government sponsored 200 tonnes per day beneficiation plant in the area which, although not currently operational, could be re-activated with proven mill feed from the district.

Nino Perdido

The 2,256 hectare Nino Perdido property lies in a gold-silver-rich district southwest of the capital of Oaxaca and previously worked by the Spanish in historic times. According to the 1996 Oaxaca state Geology and Mining Monograph, gold grades in the area can reach between 6 and 13 gpt. Arco has not confirmed these grades quoted in the Monograph.

Description of Significant Conditions to Closing

Sponsorship of a qualifying transaction of a capital pool company is required by the Exchange unless exempt in accordance with Exchange Policies. Silex intends to apply for an exemption from sponsorship requirments, however there is no assurance that it will obtain this exemption. Completion of the Proposed Acquisition is also subject to satisfactory completion of due diligence, including the Technical Report and a title opinion on the Properties, the completion of the Financing, and the approval of the directors of each company, the shareholders of Silex, and the Exchange.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

About Arco Resources

Arco holds a 100% interest in six mineral claim blocks located in the State of Oaxaca, Mexico through its Mexican subsidiary. The Company has two 43-101 compliant projects, the Lachiguiri project (Ag,Pb,Zn) and the Tres Hermanas project (Ag,Pb,Zn). In addition the Company has begun to focus its efforts on its Cuatro Venados and Taviche claim blocks, each of which have had historical production of gold and silver. For further information on the Company please go to www.arcoresources.com.

On behalf of the Board of Directors of Arco Resources Corp.

Warren McIntyre, President and Chief Executive Officer

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Arco Resources Corp.
    Warren McIntyre
    President and Chief Executive Officer
    604 639 2866
    604 662 3904 (FAX)
    www.arcoresources.com