VizCopper Ltd / Turnbrook

January 26, 2007 19:50 ET

Chilean Partner in the Vizcachitas Project Provides Further Information Regarding GHG Resources' Announcement

SANTIAGO, CHILE--(CCNMatthews - Jan. 26, 2007) - The Chilean co-owner of the Vizcachitas project ("Turnbrook") through its interest in SLM San Jose today commented on yesterday's announcement by GHG Resources Ltd. ("GHG") regarding their option to purchase the interests of Global Copper Corp. ("Global") in Vizcachitas (the "Project" or "Property"). Whilst we are pleased that GHG has disclosed additional information about the nature of the assets that they intend to acquire. Turnbrook would like to provide further information regarding the underlying commercial and legal uncertainties of the Project.

GHG implies that it is within their power "to determine how development of the Property will proceed." To this end Turnbrook would like to clarify certain matters. Chile's Mining Code includes the regulation of a type of mining company, called a Sociedad Legal Minera ("SLM"), of which the SLM San Jose, which owns the interest in the San Jose concession ("San Jose") at the centre and core of Vizcachitas is an example. As the Code envisaged that such companies would develop small scale mining operations, the Code does not provide clear rules to govern the decisions of the shareholders in relation to the development of any projects. What is clear however, is that should any expense, and particularly any development project, that includes San Jose be proposed by GHG at Vizcachitas, and not be acceptable to Turnbrook, we have the legal right to appeal such decision to Chile's Tribunals, up to and including the Supreme Court, a process that we estimate would take not less than 8 - 10 years.

Further, even should the Supreme Court eventually decide against Turnbrook in such a dispute and accept the right of GHG to develop a project at Vizcachitas, we believe that it would only do so by declaring that: (i) such project would be limited in scope only to what was "necessary" to the project itself; and furthermore (ii) such project would also be limited in size solely to the minerals contained within the San Jose concession itself, and not include any minerals outside of San Jose.

Turnbrook is of the opinion that the result for GHG is that it is buying into a potentially lengthy litigation, with eventual development rights uncertain pending a Supreme Court decision, and with their best upside case being a project that would be on a much smaller scale than implied by the June 2006 A.C.A. Howe International report prepared under National Instrument 43-101 ("NI 43-101") and then limited solely to the minerals from within the boundaries of the San Jose concession itself. Any new NI 43-101 Report issued in respect of Vizcachitas will need to reflect this fact since the different mining claims owned by different parties means that there is no singular Vizcachitas "Property" or "Project".

Turnbrook further points out that in response to priorities recently announced by the Government of Chile in relation to renewable energy projects, Turnbrook has embarked upon a feasibility study for a 32 MW hydro electric project in the Vizcachitas Valley. Given the geography of the valley and the fact that the Rocin River crosses though the San Jose concession itself, it is highly improbable that any mine can be designed without the need to divert the Rocin River from its current water course.

With respect to consumptive water rights, by Resolution No. 1278 dated September 13, 2004, the Chilean Water Authority (DGA) declared the Putaendo River and its affluents (including the Rocin River) "exhausted". The "exhausted" declaration implies that it is not possible to apply for new permanent consumptive water rights.

Finally, we wish to advise that Turnbrook has informed GHG that it is independently pursuing consolidation of Vizcachitas with our partners VizCopper Ltd. and that we have made an offer to Global to this effect. Hence we wish to make it clear that we have no intention of entering into any agreement with GHG regarding their consolidation of our interest in Vizcachitas."

Gonzalo Delaveau S.
Guerrero, Olivos, Novoa y Errazuriz
Av. Vitacura 2939, Piso 8
Las Condes, Santiago

Contact Information

  • Guerrero, Olivos, Novoa y Errázuriz
    Gonzalo Delaveau S.
    (56 2) 674 2900 or direct: (56 2) 6742944
    (56 2) 674 2903 or 674 2901 (FAX)