Crazy Horse Resources Inc.
TSX VENTURE : CZH

Crazy Horse Resources Inc.

June 15, 2010 14:31 ET

Crazy Horse to Acquire Taysan Copper-Gold Project and Update on Kayapa Copper-Gold Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 15, 2010) - Crazy Horse Resources Inc. (TSX VENTURE:CZH) (the "Company") a Vancouver based mineral exploration company, announces that it has entered into a property purchase agreement dated June 15, 2010 (the "Taysan Agreement") with Taysan Copper Corporation for the acquisition of a 100% interest in the Taysan Copper-Gold Porphyry Project, in Batengas Province, Philippines consisting of two exploration permits and three exploration permit applications covering an aggregate area of 11,309 hectares (the "Project") hosting an advanced copper-gold porphyry deposit (the "Acquisition").

Additionally, further to the Company's news release dated January 14, 2010, the Company has entered into an amendment to its Letter of Intent with Asian Arc Minerals Corp. extending its due diligence period for the review of the Kayapa Copper-Gold Porphyry Project until December 31, 2010.

Proposed Acquisition of Taysan Project

Under the terms of the Taysan Agreement, the Company has agreed, subject to the satisfaction of certain conditions precedent including the receipt of TSX Venture Exchange (the "Exchange") acceptance, to acquire all of Taysan Copper's 100% interest in the Project in exchange for (a) the issue of 20,000,000 common shares of the Company; (b) the payment of US$1,700,000; and (c) the grant of a 1.5% net smelter royalty. Taysan Copper has agreed to distribute the 20,000,000 shares to its shareholders. The Acquisition is arm's length, and if completed will constitute a "reverse take-over" under the Exchange's policies.

The parties' obligations to complete the Acquisition are subject to the satisfaction of the usual conditions precedent including:

(a) the receipt of all necessary approvals of the Exchange and all other regulatory authorities and third parties to the Acquisition;

(b) the completion by the Company of a private placement for gross proceeds of not less than C$7,000,000 to pay the cash portion of the purchase price of the Acquisition and to provide the funds necessary to complete exploration work on the Project as recommended in the independent technical report discussed below.

The Company has agreed, subject to Exchange acceptance, to the payment of a finder's fee of 500,000 shares of the Company to an arms length third party for introducing the Company to Taysan Copper upon the successful completion of the Acquisition.

Summary of the Taysan Copper Project

The following is a summary of the Project based on a technical report prepared in accordance with National Instrument 43-101 ("NI 43-101") by R. Sowerby, of Geosynthesis Pty Ltd. entitled "A Technical Review of Exploration and Resource Estimates of the Taysan Project, Batengas Province, Philippines", in collaboration with Mining Associates Inc. of Australia.

The Project contains a drill defined copper-gold porphyry deposit, and is comprised of two mining exploration permits and three mining exploration permit applications (permits: EXP-IVA-005 and EXP-IVA-016 and permit applications: EPA-IVI-108, EPA-IVI-111 and EPA-IVA-081) over five contiguous claim blocks covering a combined total area of 11,309 hectares. The Project hosts a large and only partly explored copper-gold porphyry deposit similar to other copper-gold porphyry deposits previously mined in the Philippines. The Project is located in southern Luzon, Philippines in a well developed mining province and readily accessible by road located 20km east of the provincial capital and deep water commercial port of Batangas City.

The copper-gold porphyry mineralization at the Project is hosted in potassic altered hornblende diorite and hornblenede dacite porphyry. The area of the mineralized zone defined by historical drilling is approximately 1,500 meters long in NW-SE direction and 0.5km wide and the depth as defined by drilling is approximately 400m from the outcrop at elevation 150mASL to -300mBSL The total extent of the mineralization is unknown at this time, with known historical mineralization in drill logs and assays to a depth of over 400 meters.

Gold mineralisation is broadly associated with copper mineralisation. Highest gold grades are associated with the quartz magnetite stockwork zone. A study of gold distribution undertaken by Chase Resources Corp. in 1995 indicated gold copper ratios approached 1 (ppm Au):1 (% Cu) in the stockwork zone but outside this zone the ratio fell to between 1:2 and 1:3.

Exploration undertaken in recent years outside of the immediate Taysan deposit area has highlighted the presence of prominent IP anomalies and magnetic geophysical anomalies that are spatially associated with known mineralisation. A program of RC and diamond drilling undertaken by Kumakata Mining Company Inc. (Freeport McMoran / JOGMEC) in 2006 and 2007 tested a selection of these anomalies and the northern and southern extent of the Taysan copper-gold deposit. The results of this drilling indicate that copper mineralisation extends to both the north and south of the previously known extents of the Taysan Copper deposit. In addition, broad zones of copper mineralisation have been intersected to the south east and east of the deposit in previously unexplored areas. Gold mineralisation has also been intersected in drilling 2 km west of the historic Antipolo Gold prospect. The potential for structurally hosted and epithermal gold deposits remains largely untested.

The Project area has been explored and drilled by previous companies since 1968. Previous companies involved include Newmont Mining, Benguet Corporation, Chase Resources Inc, Magma Copper, Phelps Dodge and Kumakata Mining Company Inc. (Freeport McMoran / JOGMEC). A total of 195 drillholes had been drilled up to 2009 and are recorded in the current drill hole database with a total meterage of about 44,839.6 of which 144 holes totalling 36,562m were drilled at or nearby the Taysan deposit. The majority of work has focused on resource definition drilling and assessment. This assessment has included scoping studies and pre-feasibility studies undertaken by Benguet in the 1980's and Chase Resources Inc. in the 1990's.

There have been four historical resource estimates to which reference has been located during the preparation of the report, none of which can be classified under current reporting standards due to lack of original drill records (including satisfactory quality assurance and control records), details of estimation methods used and age (all are pre 1997). These estimates are as follows:

Taysan Historical Resource Estimates
Company Author Date Cut-off Cu, % Au, g/t M tonnes Contained Cu, M lb Contained Au, oz
Benguet PAH 1981 NA 0.32 0.31 309 2,180 3,079,718
Chase Chase 1993 NA 0.31 0.13 336 2,296 1,404,344
Chase Snowden 1994 0.20% 0.29 0.23 403 2,577 2,980,050
Chase Snowden 1995 0.20% 0.3 0.21 391 2,586 2,639,896

Certain metallurgy and flotation testing was conducted in 1995 on sulphide material ranging in grade from 0.32% to 0.77% copper and 0.09g/t to 0.43g/t gold. This returned copper recoveries ranging from 87.9% to 93.7% for primary ore and 33.3% to 48.6% for oxide material. Results indicate that the recoveries for copper are consistently good and that recoveries for both sulphide copper and gold are dependent on grade (i.e. recoveries improve with grade). Concentrates grades were 25.5 to 30.1% Cu and very clean with all penalty elements well below limits, except fluorine which was at 150ppm and could be reduced with further work.

A qualified person has not done sufficient work to classify the historical estimate as current mineral resource or mineral reserves. The Company is not treating the historical estimate as current mineral resources or mineral reserves as defined in NI 43-101. The Company cautions the reader that the historical estimates disclosed in this news release should not be relied upon.

A proposed work program for a full Scoping Study, including an in-fill confirmatory drilling programme in 2010 of 6,890m of drilling to bring the existing resources to JORC/NI43-101 compliant standards, is proposed at an anticipated cost of US$4.3m.

Proposed Private Placement

The Company announces its intention to complete a non-brokered private placement consisting of the issuance of up to 9,333,333 units of the Company at a price of C$0.75 per unit, for gross proceeds of up to C$7,000,000. Each unit will comprise one common share and one-half of one common share purchase warrant of the Company. Each whole warrant will entitle the holder to purchase one additional common share of the Company at a price of $1.25 for a period of one year subject to the Company's right to accelerate the exercise of the warrants if the closing price of the Company's shares on the TSX Venture Exchange is equal to or exceeds C$1.75 per share for a period of 10 consecutive trading days between 4 months and a day from date of issue of the warrants and the date of expiry of the warrants.

The proceeds of the private placement will be used to pay the cash portion of the purchase price of the Project, to provide working capital to undertake the proposed work program on the Project (as discussed above), and for general working capital purposes.

Board and Officer Appointments

Concurrently with the completion of the Acquisition, the Company intends to appoint Brian Lueck (currently the President of Taysan Copper) as a director and Chief Executive Officer. Mr. Lueck is currently President, Chief Operating Officer and a director of Solfotara Mining Corporation. He is a registered member of the Professional Engineers and Geoscientists of British Columbia. A Philippine resident for more than 12 years and active in mineral exploration for more than 22 years, Mr. Lueck has past experience as an officer and director of several Canadian public companies involved in mineral exploration in Canada, Philippines, Indonesia, Russia, Venezuela, Costa Rica and the United States.

General

Completion of the transaction is subject to a number of conditions, including Exchange acceptance and disinterested shareholder approval. The Acquisition cannot close until the required shareholder approval is obtained. There can be no assurance that the Acquisition will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in any Management Information Circular or Filing Statement to be prepared in connection with the Acquisition, any information related or received with respect to the RTO may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.

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

The Company has not engaged a sponsor in connection with the Acquisition. The Company intends to apply to the Exchange for waiver from certain requirements of the Exchange's RTO policies, including but not limited to, engaging a sponsor and holding a shareholder meeting.

Qualified Person

The geological data in this news release is based on a technical report prepared in accordance with National Instrument 43-101 ("NI 43-101") by R.Sowerby, of Geosynthesis Pty Ltd. Brian Lueck, the proposed new director of the Company, is the qualified person who has reviewed the geological data summarized in this news release on behalf of the Company.

Extension to Kayapa Project

The Company has completed initial due diligence on the acquisition of the Kayapa Project, previously announced on January 14, 2010. This project consists of two mining exploration permit applications. Whilst the Company has completed its due diligence on the technical merits of this project, the Company is awaiting official confirmation from the Philippine Ministry of Mining to the grant of the permits and legal opinions on the good standing and assignability before proceeding with this transaction. As a result the Company and the owner of the Kayapa Project, Asian Arc Mining Corporation, have entered into an amendment to their Letter of Intent dated January 14, 2010 extending the exclusivity and due diligence periods to December 31, 2010.

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

Grant of Stock Options

Pursuant to the terms of the Taysan Agreement, the Company and Taysan have agreed, subject to Exchange acceptance, that conditional upon the closing of the Acquisition that the Company will granted to new and existing directors and officers an aggregate of 1,100,000 stock options to purchase up to 1,100,000 common shares of the Company at the private placement price of $0.75 in accordance with the Company's stock option plan.

ON BEHALF OF THE BOARD

"Darren Devine"

Darren Devine
President and CEO

This press release includes "forward-looking statements" including forecasts, estimates, expectations and objectives for future operations that are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of Crazy Horse Resources Inc. Statements regarding future fund raising and completion of the Acquisition are subject to all of the risks and uncertainties normally incident with the raising of capital and completing corporate transactions including, but are not limited to, financing risks, inflation and costs of goods and services, property title issues and regulatory approvals. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. Such forward-looking information represents management's best judgment based on information currently available. No forward-looking statement can be guaranteed and actual future results may vary materially. Crazy Horse Resources Inc. does not assume the obligation to update any forward-looking statement, except as required by applicable law.

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 release.

Contact Information

  • Crazy Horse Resources Inc.
    Darren Devine
    President and CEO
    604-638-8067
    604-648-8105 (FAX)