Crazy Horse Resources Inc.

TSX VENTURE : CZH


Crazy Horse Resources Inc.

August 24, 2010 09:38 ET

Crazy Horse Provides Update on Taysan Copper-Gold Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 24, 2010) - Crazy Horse Resources Inc. (TSX VENTURE:CZH) (the "Company") a Vancouver based mineral exploration company, provides the following update on its acquisition of a 100% interest in the Taysan Copper-Gold Porphyry Project, in Batangas Province, Philippines (the "Acquisition") further to its news release of June 15, 2010. The Taysan Project consists 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").

Acquisition and Project Update

The Company has concluded its due diligence on the Acquisition, including the receipt and acceptance of an independent report and legal opinions on title to the Project. A copy of the independent technical report authored by R.Sowerby, of Geosynthesis Pty Ltd. and entitled "A Technical Review of Exploration and Resource Estimates of the Taysan Project, Batangas Province, Philippines", in collaboration with Mining Associates Inc. of Australia can be accessed under the Company's profile at www.sedar.com.

The Company anticipates closing of the Acquisition to occur on or before September 30, 2010 subject to the receipt of shareholder approval and TSX Venture Exchange (the "Exchange") acceptance and completion of the a private placement 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.

Requests for proposals to conduct a six months scoping study have been issued to consultants covering the required disciplines to bring the currently non NI 43-101 compliant resource up to Scoping Study level standard of project evaluation as described in the independent technical report. Three core drilling rigs have been reserved from Quest Exploration Drilling (QED) with a fourth rig committed after one month of operations. A 21 person management team is in place with all project budgets and positions identified.

Proposed Acquisition of Taysan Project

Under the terms of Mineral Property Purchase Agreement dated June 15, 2010, the Company has agreed, subject to the satisfaction of certain conditions precedent including the receipt of Exchange acceptance, to acquire all of Taysan Copper Corporation'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. The Acquisition is arm's length, and if completed will constitute a "reverse take-over" under the Exchange's policies.

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: EP-IVA-005 and EP-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 work completed by Freeport McMoran / Jogmec) included RC and diamond drilling of a magnetic anomaly 800m NNE of the Antipolo gold prospect intersected gold mineralisation associated with oxidised silica-sulphide veining within altered andesitic volcanic. A best intersection of 23 metres at 5.28ppm Au from 84m (including 1 metre at 93.2ppm Au from 84m) was returned from drill hole TDH-1.

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
              Contained Contained
            M Cu, Au,
Company Author Date Cut-off Cu, % Au, g/t tones M lb 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$3.5m.

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. 

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.

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.

Grant of Stock Options

Further to its news release dated June 15, 2010 and discussions with Taysan Copper Corporation, the Company has agreed, subject to Exchange acceptance, that conditional upon the closing of the Acquisition that the Company will granted to new and existing directors, officers, employees and consultants an aggregate of 2,036,500 stock options to purchase up to 2,036,500 common shares of the Company at the private placement price of $0.75 in accordance with the Company's stock option plan. This is an increase of 936,500 stock options from those granted under the Company's June 15, 2010 news release.

Investor Relations Contract

The Company announces that it has entered into an Investor Relations Contract with Kin Communications Inc. dated August 24, 2010, pursuant to which Kin Communications has agreed to provide investor relation services to the Company for a period of 12 months, subject to termination on 30 days written notice, in consideration of the payment C$7,500 per month and the grant of 350,000 stock options to purchase up to 350,000 common shares of the Company at the private placement price of C$0.75. The contract with Kin Communications and the grant of stock options remains subject to Exchange approval and the completion of the Acquisition.

ON BEHALF OF THE BOARD

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.
    Investor Relations
    1-866-684-6730