Mindoro Resources Ltd.
TSX VENTURE : MIO
FRANKFURT : OLM

Mindoro Resources Ltd.

May 16, 2006 09:30 ET

Mindoro Joint Ventures Apical Gold Project with Developing Gold-Producer

EDMONTON, ALBERTA--(CCNMatthews - May 16, 2006) - Mindoro Resources Ltd. (TSX VENTURE:MIO)(FWB:OLM) is pleased to announce it has signed a Joint Venture Agreement with Medusa Mining Limited of Australia, on Mindoro's Apical Gold Project in Mindanao, the Philippines. Medusa may earn a 70 percent interest by taking the project either to production, in the case of lode deposits, or to feasibility, in the case of bulk-tonnage, porphyry copper-gold deposits. Mindoro and its private Philippine partner would each retain 15 percent interest and are fully carried until Medusa has reached its earn-in.

"The Apical Gold Project has good potential for lode gold production and porphyry copper-gold mineralization," said Tony Climie, P. Geol., President of Mindoro. "Since Medusa will be producing gold from the nearby Co-O Mine and has a processing plant, it makes strategic sense for Medusa to operate Apical, while we focus on our Batangas and Surigao Projects, where we are very busy carrying out multiple drill programs."

The Apical Project comprises approximately 2,084 hectares and is located in the provinces of Agusan del Sur and Surigao del Sur in east Mindanao, near Medusa's Co-O Gold Mine. It has at least two areas of artisanal gold workings, as well as copper showings and covers favourable geology as found in the Co-O Mine area. The Project is currently held under a Mineral Production Sharing Agreement application (APSA).

Medusa has the right to earn a 70 percent interest in the Apical Project by:

(i) in the case of lode deposits, commencing development and by producing the first 500 tonnes of ore, after which Mindoro and its Philippine partner would have the option to contribute to ongoing expenditure, each retaining a 15 percent participating interest, or to reduce to a three percent Net Smelter Royalty ("NSR"), each retaining a 1.5 percent NSR;

(ii) in the case of large, bulk tonnage deposits such as porphyry copper-gold deposits or disseminated or stockwork gold deposits, completing a Bankable Feasibility Study, after which Mindoro and its partner would have the right to contribute to ongoing expenditures or to dilute to a three percent NSR.

Medusa is required to spend US$300,000 within three years of grant of the APSA and spend a minimum of US$150,000 per year subsequently. Mindoro has the right to a 15 percent interest in the Apical Project upon Medusa meeting its earn-in requirements.

Programs are carried out under the supervision of Tony Climie, P. Geol., who is a qualified person as defined by National Instrument 43-101.

ABOUT MEDUSA

Medusa Mining Limited is an emerging gold producer with a focus on the Philippines. It is currently developing the high-grade Co-O Gold Mine in conjunction with its partner, Philsaga Mining Corporation. Co-O has a current resource of 240,000 ounces gold at a grade of 29.7 grams per tonne gold with considerable upside potential. The Co-O Mine occurs within a vein swarm that is currently being explored; the Apical Project may be part of a second vein swarm located in the Tambis area immediately north of and contiguous with the Apical Project. The Co-O Mine is on target to begin production of 40,000 ounces per year from July, 2006, at a cash cost of less than US$200 per ounce. Ore will be processed at the Co-O Plant, which is being re-furbished for a through-put of up to 450 tonnes per day (tpd), and has crushing and grinding capacity of 1,000-1,100 tpd. The plant is within trucking distance of the Apical Project.

ABOUT MINDORO

Mindoro is a Tier 1 Issuer trading on the TSX Venture Exchange (MIO) and the Frankfurt Stock Exchange (OLM). The company has identified 22 porphyry copper-gold prospects and a nickel laterite prospect in the Philippines and has an aggressive strategy of drilling multiple targets in 2006.


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

Contact Information