SOURCE: Legacy Mining Ltd.

January 14, 2008 19:52 ET

Legacy Mining Ltd. to Acquire up to 80% Interest in Major China Gold Property

BELLINGHAM, WA--(Marketwire - January 14, 2008) - Legacy Mining Ltd. (OTCBB: LEYM) has signed a Letter of Intent with Mercury Enterprise Co. Ltd. ("MEC"), a China based joint venture gold company, to acquire up to 80% of a gold property known as the Miaozihe Gold Mine which consists of the Gingishan Exploration License Area (28.0sq.km.) and the Mining Concession (2.80sq.km.) that are contiguous, and located on a main paved road some 30kms from the town of Luoning. Luoning is situated approximately 225km west of Zhengzhou and is also the Provincial Capital of Henan. The Lands and Resources Ministry of the P.R. China have issued the License and Concession.

A Techical 43-101 Report for the Miaozihe Gold Mine was completed January 2007 by Canadian Engineer P.H. Cowdery MBA P.Eng

The Miaozihe mine and plant are operated by Chinese Standards. There are 4 developed levels and one bottom level, which is currently being developed, in the mine. The surface facilities consist of the100 ton/day flotation mill and all the necessary mine infrastructure. According to estimate data of sampling in the veins of the Exploration License Area the Maximum Estimated Grade in Au is 10.28 g/t.

Vein      Estimated Grade in gpt     Estimated Size of Resource (Tns)
                    Au

A1        Min.9.0       Max. 9.0      Min. 200,000      Max. 266,000
A3-A10    Min. 9.66     Max. 11.31    Min. 1,271,290    Max. 1,691,653
Totals    Min. 9.57     Max. 11.00    Min. 1,471,920    Max. 1,957,653

It is estimated that with the expansion of the existing 100 ton/day plant to 200 ton/day capacity and the additional construction of a 300ton/day plant, the project could produce up to 30,000ozs of gold/year, with a gross margin of $10-15 USD million/year. (These figures are based on gold prices between $500-600 USD/oz). With the exploration of all the ten veins and three potentially economic zones, the total resource could exceed 2 million ozs.

Current Status of Operations

The operating costs in this particular area are very low because of the large size of the local available work force. It is estimated that the total operating costs of a 100 ton/day mine and mill would be approximately $50.00 USD/ton, which at the expected grade of 0.3oz/ton gives an equivalent production cost of $185.00 USD/oz Au.

Property History

The area was first explored in 1956 and this work continued on a sporadic basis for almost 30 years. In 1986 the County and Provincial Geological Teams started to carry out a systematic exploration of the area. In 1995 a Chinese joint venture was organized to develop and mine the so-called A1 Vein.

The mine went into production in1998 at a throughput of 100 ton/day and has been operating at this rate to the present day. Since MEC took over the property, it has spent a total of $1,100,000 USD on infrastructure improvements, tunnel refurbishment as well as hoist and pump updating.

Terms of Letter of Intent

The Letter of Intent calls for the Company to acquire 100% of MEC which has an 80% working interest of the Miaozihe Gold Mine, in three stages.

Legacy is to acquire 40% ownership of MEC for 11,800,000 shares of the Company's Restricted 144 Stock and a cash commitment of $200,000 USD towards the development of the project. The Company will acquire the remaining shares of MEC based on a mutually agreed formula within twelve months. There is a 2.5% NSR on the property.

The terms and conditions of the acquisition are subject to a due diligence period of 60 days before a definitive agreement outlining the entire take-over is finalized. A finders fee is payable.

The Company will be raising up to $3,000,000 USD to fund the development and production of the Miaozihe Gold Mine. Terms of the private placement will be announced as they are determined.

/s/ Robert Klein
Robert Klein, President

For further information contact: 1-888-488-6882

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained herein which are not historical fact are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, certain delays in testing and evaluation of products and other risks detailed from time to time in Legacy Mining's filings with the Securities & Exchange Commission.

Contact Information

  • Contact:
    Legacy Mining Ltd.
    1-888-488-6882