Tiomin Resources Inc.

Tiomin Resources Inc.

May 31, 2006 14:06 ET

Tiomin Plans 14,000 Meter Drilling Program at its Pukaqaqa Copper-Gold Project

TORONTO, ONTARIO--(CCNMatthews - May 31, 2006) - Tiomin Resources Inc. ("Tiomin" or the "Company") (TSX:TIO) is pleased to announce that an additional 14,000 meter drilling program has been approved by our joint venture partner, Compania Minera Milpo S.A.A.("Milpo") on the Pukaqaqa copper-gold project in Peru. The objective of the program is firstly to convert a significant portion of the Inferred resource (estimated at 1.52 billion pounds of copper and 354,000 ounces of gold) into the Measured and Indicated categories (currently estimated at 202 million pounds of copper and 39,000 ounces of gold), and secondly to further expand the known resources and compile sufficient geotechnical and metallurgical data necessary to initiate a feasibility study. The Pukaqaqa option, in which Tiomin has earned a 49% interest, is located on a 31.5 sq km land package situated 10 km northwest of the town of Huancavelica and 230 km southeast of Lima, Peru.

Several mine development scenarios are being contemplated by Tiomin and Milpo, including an 18,000 tpd milling operation fed by 14,500 tpd from open pit mining and 3,500 tpd from higher grade underground mineral extraction.

With a substantial copper resource defined at Pukaqaqa thus far, combined with a strong commodity price environment with spot copper trading at over US$3.80 per pound recently, Tiomin is strategically well positioned with exposure to copper and gold in Peru, as well as to its primary focus of titanium (rutile and ilmenite) and zircon in Kenya.

Pukaqaqa Mineral Resource Estimate (100 % basis)
Category Cutoff Tonnes Cu Au Cu Au
(% Cu) ('000) % g/t '000 lbs '000 ozs
0.3 191 0.58 0.08 2,441 0.48
0.4 170 0.61 0.08 2,287 0.44
0.3 16,933 0.54 0.07 201,590 38.65
0.4 13,796 0.58 0.07 176,408 32.82
Measured & Indicated
0.3 17,124 0.54 0.07 204,031 39.14
0.4 13,966 0.58 0.07 178,696 33.27
0.3 114,654 0.6 0.10 1,516,601 353.88
0.4 93,559 0.66 0.10 1,361,319 312.83

The mineral resource estimate for the Pukaqaqa deposit was prepared by Jorge Hinostroza, Senior Geologist with Milpo. The estimate was reviewed by Doug Reddy, P.Geo, Principal Geologist, AMEC, Qualified Person as the term is defined in Canadian Securities Administrators National Instrument 43-101.

Milpo, the project operator, is a Peruvian mining company listed on the Lima Stock Exchange, and a well known operator of copper, zinc and lead mines. Milpo has an excellent track record in the development and operation of low cost mines, such as the El Porvenir mine in Cerro de Pasco, the Chapi copper mine and the Cerro Lindo polymetallic project and the Ivan copper mine in Chile.

Tiomin is a company engaged in the acquisition, exploration and development of mineral properties in Kenya and Peru, and is currently focused primarily on the development of its Kwale titanium mineral sands project in Kenya. The Company recently signed a mandate with three financial institutions to arrange and underwrite a debt facility of US$120 million. In addition, the Company finalized terms with the Jinchuan Group Ltd. ("Jinchuan") for a US$35 million subordinated debt facility, subject to approval by the TSX and shareholders of the Company. Tiomin also recently closed a private placement of C$7.4 million with Jinchuan. These funds combined with the proceeds of the previously announced best efforts public equity offering to raise approximately C$50 million will be used mainly to complete the US$176 million project financing requirements for the construction and startup of the Kwale project.

Certain of the information contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, including but not limited to those with respect to the prices of copper, gold, rutile, zircon and ilmenite, estimated future production, estimated costs of future production, the Company's sales policy and permitting time lines, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the actual prices of copper, gold, rutile, zircon and ilmenite, the factual results of current exploration, development and mining activities, changes in project parameters as plans continue to be evaluated, as well as those factors disclosed in the Company's documents filed from time to time with the Ontario Securities Commission.

Contact Information

  • Tiomin Resources Inc.
    Jean-Charles Potvin
    (416) 350-3776 ext. 227
    Tiomin Resources Inc.
    Bruce Ramsden
    Chief Financial Officer
    (416) 350-3776 ext. 232
    Tiomin Resources Inc.
    Laurie Gaborit
    Investor Relations
    (416) 350-3776 ext. 222