Oriental Minerals Inc.

Oriental Minerals Inc.

February 10, 2010 13:44 ET

Oriental Minerals Inc.: Option Exercised on Taebaek and Yeonwha Properties, South Korea

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 10, 2010) - Oriental Minerals Inc. (TSX VENTURE:OTL) (the "Company") announced today that it has provided notice of its intent to exercise options on the Yeonwha and Taebaek properties (the "Properties" and each a "Property") located in South Korea. Oriental Minerals is focused on moving the three core mineral deposits in South Korea, Sangdong tungsten-molybdenum, Sangdong molybdenum and Muguk gold forward as a priority. However, your board is cognizant that the Company needs assets for today and a portfolio of projects that have known mineralization and or some mine development in safe, low risk destinations to provide acceptable risk, value and diversity in the longer term. The Taebaek and Yeonwha properties fit the longer term profile and will take minimal finance to model and evaluate to be ranked in the project priority list for longer term development.

Pursuant to an option agreement dated October 9, 2006 (the "Jangseong Option Agreement"), the Company was granted the option to acquire various mineral projects in South Korea held by Se Woo Mining Co. Ltd. (a company owned and controlled by Jae Youl Sim) and certain private individuals, including Jae Youl Sim and members of his family (the "Vendors") for a three year period. On October 9, 2009, immediately prior to the expiry of the Option Agreement, the Company issued the required notice to the Vendors to exercise the option on the Properties.

Pursuant to the Option Agreement, in order to acquire a 100% interest in each Property, the Company must (1) pay US$50,000 in cash and US$50,000 in cash or common shares of the Company, at the discretion of the Company, at the average closing price of the common shares for the 10 day trading average price prior to the payment date (2) on development of the project Oriental must pay a further US$1 million in cash and US$1 million in cash or common shares of the Company, at the discretion of the Company, at the average closing price of the common shares for the 10 day trading average price upon commencement of commercial production and (3) on production output grant a 2% net smelter return royalty to the Vendors. Additionally, in order to keep the option in good standing, the Company must complete a pre-feasibility study on the Property within five years of the transfer of the Properties to the Company.

Mr. Jae Youl Sim currently owns directly and indirectly, through Se Woo Mining Co. Ltd., 20,799,493 common shares, representing 11.34% of the issued and outstanding shares of the Company. Following completion of the initial option exercise payments, Mr. Sim will hold 21,049,403 common shares of the Company representing 11.47% of the then issued and outstanding shares.

The Jangseong Option comprises two contiguous blocks, referred to as Yeonwha which comprises five mining titles (Registration #s 76094, 76361, 76499, 76500, 76501), and Taebaek which comprises three mining titles (Registration #s 76359, 76360, 76505).

The Yeonwha and Taebaek blocks comprising the Jangseong Option are referred to as the Yeonwha I property which lies within the historic Taebaek silver-lead-zinc mining district of South Korea. This district hosts numerous known deposits of 2 to 12 million tonnes in size with combined lead-zinc grades of approximately 10%. All mining in the district ceased by the 1990s due to depressed metal prices. Yeonwha I lies approximately 4 kilometres to the south west of the Yeonwha II property which is currently being evaluated by a Korean joint venture group including Korea Resources Corporation ("KORES"). 

Three past-producing lead-zinc-silver mines lie within the Yeonwha I property; Taebaek, Bonsan and Dongjeom. These deposits were mined from the early 1960s to the early 1990s. The mineralisation occurs in skarns within Cambrian to Ordovician limestone and shale and is hosted within tabular veins and breccia pipes that form discrete ore bodies within each deposit. One of the largest of the ore bodies, Taebaek 1 within the Taebaek deposit, occurs within a sub-vertical tabular vein that attains a maximum thickness of around 9 metres. It has been mined over a strike extent of around 400 to 500 metres and a vertical extent of approximately 400 metres. The top of the vein is around 400 metres below surface.

Detailed 'ore reserves and resources' were documented in a 1991 report by KORES prior to the cessation of mining. The report quotes 'reserves' and 'resources' as categories that can be translated from Korean as 'proved' and 'inferred', however they cannot be assumed to be equivalent to similar terms used under the JORC and NI 43-101 requirements, and therefore the KORES estimates are not compliant and cannot be relied on but provide an indication of the target to be explored.

The historical non-compliant resources include total "proved reserves" for the three deposits of 3.6 million tonnes grading 3.5% lead and 4.8% zinc, of which 96% was contained in the Taebaek deposit, and total "inferred resources" of 3.6 million tonnes grading 3.4% lead and 4.8% zinc, of which 73% was contained in the Taebaek deposit. These figures should not be taken as a statement as to the quantity and quality of the mineralisation as they do not comply with the NI 43-101 instrument. The data is only given as a guide to the tenor of the mineralisation as it has been historically defined.

The scientific and technical information contained in this release has been reviewed and approved by Colin Lutherburrow, AusIMM, an independent geological consultant to Oriental.

On Behalf of the Board of Directors
Brian Wesson
Chief Executive Officer

Forward-Looking Statements
Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors identified in the Company's periodic filings with Canadian Securities Regulators. These factors include the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting drill results and other exploration data, the potential for delays in exploration or development activities, the geology, grade and continuity of mineral deposits, the possibility that future exploration, development or mining results will not be consistent with the Company's expectations, accidents, equipment breakdowns, title matters, labor disputes or other unanticipated difficulties with or interruptions in production and operations, fluctuating metal prices, the possibility of project cost overruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future, the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations, currency fluctuations, regulatory restrictions, including environmental regulatory restrictions and liability, competition, loss of key employees, and other related risks and uncertainties. The Company undertakes no obligation to update forward-looking information except as required by applicable law. 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. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.

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.

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