Geologix Explorations Inc.

Geologix Explorations Inc.

March 23, 2010 11:00 ET

Geologix Options La Joya Project, Peru to Empresa Minera Los Quenuales

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 23, 2010) - Geologix Explorations Inc. ("Geologix" and the "Company") (TSX:GIX)(FRANKFURT:GF6)(BERLIN:GF6)(STUTTGART:GF6)(MUNICH:GF6) is pleased to announce it has executed an option agreement with Empresa Minera Los Quenuales S.A. ("EMLQ"), a Peruvian subsidiary of the Glencore group, granting EMLQ an option to earn up to a 70% interest in the Company's La Joya Project located approximately 185 kilometres southeast of Lima in Huancavelica Department, Peru.

Pursuant to the terms of the agreement, EMLQ may earn an initial 51% interest in the property by completing US$2,000,000 in expenditures over three years. In year one, the agreement calls for a minimum commitment of 1,500 metres drilling. Upon successful completion of these expenditures, a joint venture will be formed (49% Geologix and 51% EMLQ).

Under the terms of the option agreement, EMLQ may earn an additional 19% interest in the project, for a total of 70%, by providing a bankable feasibility study ("BFS") within 6 years of formation of the joint venture. The BFS must be completed within 2 years from the election to exercise the additional 19% interest. EMLQ may exercise the right to off-take 100% of the metal production on terms that are arms length, by providing the Company's proportion of project financing to commercial production on a loan basis to be repaid from 90% of cash flow.

The La Joya property is comprised of 17 concessions totalling 14,600 hectares. The property is underlain by a zone of skarn, formed at the contact between granodioritic to dioritic intrusions and calcareous sediments of Jurassic to Cretacious age. Sedimentary units are silicified with lesser dolomitization. Two zones of mineralization have been identified to date by the Company.

Precious metal mineralization (gold, silver +/- copper and molybdenum) is located in the Central Zone where an interpreted intrusive unit intrudes the sediments. The area of potential mineralization measures approximately 2,500 metres from south to north. Gold values in these areas are as high as 6.59 grams per tonne ("g/t") gold and occur in gossan zones. Silver anomalies assayed as high as 1,411 g/t silver in the Central Zone.

A second zone of mineralization is located at La Joya West, where a structurally controlled, intrusive related zone of mineralization is dominated by zinc and lead mineralization. Mineralization is hosted in mantos, replacement bodies and structures within calcareous sediments. Maximum analytical results are 60% zinc and 25.5% lead in select samples.

Dunham Craig, President and CEO stated "The Company is very pleased to have EMLQ as a partner in the project as they have the experience and capital to develop the property to final production. EMLQ has been responsibly operating mines in Peru - and we are very pleased to have their capability applied to the project's development. Additionally, if EMLQ elects to exercise its right to 100% of the metal off-take, taking the project to commercial production will not require any capital from Geologix, but will retain the Company's interest in future cash flow after payback."

Geologix Explorations Inc. is a mineral exploration company focused on acquiring, exploring and developing gold properties in North and South America. The Company has a wealth of experience in the mining industry taking early stage exploration prospects to final feasibility and ultimately to production.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Geologix Explorations Inc.
    Jeffrey Wilson
    V.P. Corporate Communications
    (604) 894-1742
    Toll Free in Canada and USA: 1 (888) 694-1742
    Geologix Explorations Inc.
    Dunham Craig
    President & CEO
    (604) 694-1742