Mindoro Resources Ltd.
TSX VENTURE : MIO
FRANKFURT : OLM

Mindoro Resources Ltd.

May 12, 2008 12:27 ET

Artisanal Miners Expose High-Grade, Porphyry-Related Copper Mineralization at Mindoro's American Tunnels Prospect

EDMONTON, ALBERTA--(Marketwire - May 12, 2008) - Mindoro Resources Ltd. (TSX VENTURE:MIO)(FRANKFURT:WKN 906167) is pleased to report that five areas of high-grade copper mineralization have been discovered recently by artisanal miners at the American Tunnels porphyry copper-gold prospect on the Agata Project. These are being actively mined from six shafts and tunnels. The high-grade copper mineralization occurs in intrusive dykes and sills that exhibit porphyry and skarn-related alteration and occur in proximity to strong and untested IP chargeability anomalies. Given the strength of copper mineralization observed and extent and nature of alteration, the intrusive-related copper mineralization is taken as strong evidence of a significant porphyry copper-gold source nearby, probably related to the adjacent IP anomalies. Detailed evaluations are in progress.

Artisanal miners have been mining epithermal gold in the American Tunnels area for several decades (to see accompanying map please visit Mindoro's website at www.mindoro.com). The phenomenon of the artisanal miners now mining high-grade copper ore is the result of both the discovery of the high-grade copper mineralization and high copper prices, which can support this small scale mining and transportation of raw ore to China for processing.

Mindoro, working with the Philippine Mines and Geosciences Bureau, encourages local miners to profit from legitimate small-scale mining of shallow ores, providing that this is done in an environmentally and socially acceptable manner. The company is working in several areas to assist in the formation of small-scale mining cooperatives to assist this process. Mindoro sees this as a mutually beneficial operation; with the artisanal miners earning a living and at the same time providing useful information on the potential for large-scale associated deposits at depth. The relatively small loss of ore at these shallow levels is not considered a detriment to potential large scale mining operations by Mindoro.

There are now six tunnels/shafts in operation over an area of 150 m by 50 m. A further 11 workings are being actively mined for epithermal gold (an overprinting shallower event). The copper ore is being mined by manual methods; ore grading 5 percent to 15 percent copper is loaded into 40 kg sacks and sold to local buyers to be sent to China for processing. Mindoro sampled one of the more easily accessible shafts, obtaining the following results from channel samples:

1.1 m vertical channel sample across exposed part of dyke at 7.91% copper, 0.23 g/t gold and 35.70 g/t silver;

1.0 m horizontal channel sample across floor of shaft at 4.89% copper, 0.15 g/t gold and 16.80 g/t silver;

1.9 m vertical channel sample across exposed part of dyke at 7.37% copper, 0.13 g/t gold and 27.80 g/t silver;

1.05 m vertical channel sample across exposed part of dyke at 2.02% copper, 0.07 g/t gold and 7.70 g/t silver

Mapping by Mindoro and petrology work by an independent petrologist, indicate mineralization is associated with multi-phase syenite, quartz monzonite, monzodiorite and diorite intrusives. These occur as dykes, sills, and small stocks of intruding ultramafic rocks. Petrographic studies indicate early potassic alteration (secondary biotite, actinolite), plus the copper minerals chalcopyrite, covellite and bornite. This is overprinted by later phyllic (sericite+/-calcite+/-actinolite+/-epidote) and skarn alteration/mineralization. These features are indicative of a porphyry copper setting. A younger epithermal gold mineralization event cuts the earlier porphyry-related alteration.

The American Tunnels prospect is characterized by a strong IP chargeability anomaly, extending over 800 m by 300 m, is capped by a resistivity anomaly and coincident with a magnetic anomaly. Extensive copper, gold and zinc soil anomalies are associated. The IP chargeability anomaly is part of a string of strong chargeability anomalies extending over at least six kilometers of strike through the Agata Project, which are associated with intersections of splays of the Philippine Fault and cross-cutting faults. In a remarkable geological coincidence, extensive nickel laterite mineralization is juxtaposed in close proximity to the porphyry copper-gold prospects, and is itself the subject of intensive economic evaluation and pre-development work by Mindoro.

The American Tunnels is an as yet untested high-priority drill target for both epithermal gold and especially, for porphyry copper-gold mineralization. The extent of alteration, abundance and strength of copper-gold showings, and of the associated IP anomalies, indicate a source of considerable potential interest.

ABOUT THE AGATA PROJECT

Epithermal gold and porphyry copper-gold

The Agata Project is situated in the Surigao Gold District, northern Mindanao, Philippines. The Surigao Gold District is not only a current and historical gold producing district, but with the recent discovery of a cluster of porphyry copper-gold deposits by two Anglo-American joint ventures, it also has high potential to become a major copper-gold mining camp. Mindoro has multiple gold and copper-gold targets in the Surigao District at varying stages of drill evaluation. Agata itself has a cluster of porphyry copper-gold prospects and two epithermal gold prospects which are being advanced by Mindoro.

During 1999, seven of eight drill holes completed by Mindoro on Agata's Assmicor Prospect intersected better than 0.5 g/t gold near surface in oxidized intrusives and dykes. The two best holes were 1.1 g/t gold over 19 meters and 1.4 g/t gold over 24 meters. The mineralization is open to the north and east. Porphyry-related alteration, accompanied by grey quartz-magnetite veins with copper and gold mineralization, characteristic of the margins of a porphyry copper-gold system, was intersected associated with east-dipping dykes and intrusions. At the nearby Limestone Prospect, two 1999 drill holes encountered 2.7 g/t gold and 2.2 g/t gold over seven and eight meters respectively, at shallow depths; mineralization resembles important limestone-hosted gold deposits in Nevada, US.

Extensive IP geophysical surveys, subsequently carried out in 2004-2005 defined strong and semi-continuous chargeability with resistivity and magnetic anomalies, extending over at least six kilometers at Agata. Abundant gold and copper-gold showings are associated with this trend, as well as extensive alteration and soil geochemistry anomalies. The major porphyry targets defined are the American Tunnels and the North and South porphyry prospects.

The North porphyry prospect is a large and strong chargeability anomaly of greater than 28 m/secs covering 1.2 kilometers by 500 meters. It is coincident with soil copper and gold anomalies, and alteration of ultra-mafic rocks (pyrite and magnetite disseminations and silica veining). Several copper showings and intrusive dykes have been found in the area. A 2005 drill program experienced considerable operational difficulties in the intensely fractured broken and gougy ultra-mafic cap rock and three holes were lost at shallow depths. This degree of structural preparation is consistent with that seen associated with porphyry copper-gold systems. Mindoro is developing a strategy it believes will overcome the drill-operational difficulties.

The South porphyry prospect is also a large, 1.5 kilometer by 500 meters, and strong chargeability anomaly of greater than 28 m/secs, with a flanking high resistivity anomaly. Geology consists of limestone, greenschist and ultra-mafics intruded by small dykes or stocks of altered intrusive, likely the top of a much larger intrusive complex, exhibiting phyllic alteration in places. There are ongoing artisanal gold mining operations in the area. Soil geochemical surveys defined gold, zinc and copper anomalies. Evidence strongly points to a porphyry copper-gold system at depth. In 2006 a single hole was drilled on the South Target, which also encountered operational difficulties and was terminated before target depth. However, in this case it is believed that the target can be drilled from the western side and the difficult ultra-mafic cap rock circumvented.

Agata Nickel Laterite

The Surigao Region is now emerging as a major nickel producing district and there are at least eight nickel laterite deposits either in production or being developed, providing direct shipping ore (DSO) to markets and processing plants in China, Japan, Korea and Australia. These include the SR Metals Mine, immediately adjacent to Mindoro's Agata nickel laterite project. At Agata, significant drill results have previously been reported by Mindoro (see releases on Mindoro website). Agata has strong competitive advantages, with good grades, just two to three kilometers from tide water, with corresponding low haul distance and costs, and only two days shipping from China.

On April 30, 2008, Mindoro reported an initial 43-101 resource estimate from the Agata North nickel laterite project. The estimate for combined Measured and Indicated Resources is 4.40 million wet metric tonnes (WMT) grading 1.25 percent nickel, 0.063 percent cobalt and 23 percent iron, at a cut-off grade of 0.80 percent nickel. In addition, the Inferred Resource estimate is 2.45 million WMT grading 1.23 percent nickel, 0.062 percent cobalt and 22 percent iron, also at a cut-off grade of 0.80 percent nickel. The resource estimate represents just 15 percent of mapped area of nickel laterite at Agata North. Drilling is ongoing and updated resource figures will be released as they come to hand.

Exploration Target for Agata North is;

Combined ferruginous overburden, limonite and saprolite horizons: 40 to 60 million wet metric tonnes (WMT) at a grade of 0.9 to 1.5 percent nickel and 18 to 28 percent iron.

On August 23, 2007, Mindoro announced that it had reached agreement with Delta Earthmoving Inc., an experienced nickel laterite mining contractor, to explore and advance to production if warranted, the Agata South nickel laterite project. The agreement does not cover Agata North. A total of 186 drill holes and 2,248 meters have been drilled, covering 50 hectares, near the southern boundary. Assays have not yet been reported by Delta.

Enhanced Value, On-Site Processing Alternatives

While much of the Surigao District nickel laterite production has been as DSO to processing plants in Japan, Australia and China, several attractive alternatives are emerging for local processing, which include; at the low technology end of the spectrum, ferronickel smelting, heap-leaching for which pilot testing on another Philippine laterite deposit has produced promising results, and a new generation of High Pressure Acid Leach (HPAL) plants. HPAL technology is currently being used with great success by Sumitomo on its Philippine Coral Bay operation, and show considerable promise for the local processing of Surigao ores. In fact, Sumitomo recently announced plans to proceed with permitting to construct an HPAL plant in the Surigao District. This HPAL technology has a proven track record, in contrast to several HPAL operations previously attempted in Australia.

Construction of a local processing plant, rather than simply shipping out raw product, would greatly increase the returns to all stakeholders; including Mindoro, its Philippine partner, the local people, local government units, and to the Philippines itself. Mindoro considers a tonnage threshold of 50 million WMT to be of potential interest for this scenario.

Programs are carried out under the supervision of Tony Climie, P.Geol., president of Mindoro, who is a qualified person as defined by National Instrument 43-101. Sample preparation and assaying is performed by McPhar Laboratory of Manila, an ISO 9001/2000 accredited laboratory. Gold assays were by 50 gm fire assay fusion; where gold assays greater than 3 ppm were by gravimetric finish and by AAS where the gold values were less than that threshold. Silver was determined by AAS after an HCl-HNO3-HClO4 digest. Normal Quality Control and Quality Assurance procedures are being carried out, using a system of duplicate samples. MRL has also conducted assays verification by using standard samples and re-assaying of field, coarse and pulp duplicates.

The potential quantity and grade of the exploration target described above is conceptual in nature. There has been insufficient exploration to define mineral resources other than those disclosed in this release, and it is uncertain if further exploration will result in the targets delineating additional mineral resources or that these resources, if delineated, will be economic or sufficient to support a commercial mining operation. Until a feasibility study has been completed there is no certainty that the company's projections will be economically viable.

ABOUT MINDORO

Mindoro is a Tier 1 Issuer trading on the TSX Venture Exchange (MIO) and the Frankfurt Stock Exchange (WKN 906167). In addition to advancing the Agata nickel laterite project towards production, Mindoro has announced an initial 43-101 compliant gold-silver mineral resource estimate on its Kay Tanda gold-silver, and recently, on its Agata project. The company has also identified 22 porphyry copper-gold prospects in the Philippines and has an aggressive strategy of drilling multiple targets in 2008.

This release may contain forward-looking statements including management's assessments of future plans and operations, and expectations of future production. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks include, but are not limited to, the risks associated with the mining and exploration industry (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production). The assumptions used in the preparation of such statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.

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

Contact Information

  • Mindoro Resources Ltd. - Head Office
    Penny Gould
    Executive Vice President
    (780) 413-8187
    Email: penny@mindoro.com
    Website: www.mindoro.com
    or
    Ascenta Capital Partners Inc.
    Trent Dahl
    Investor Relations-Canada
    (604) 628-5800 or Toll Free: 1-866-684-4209 ext. 228
    Email: info@mindoro.com
    or
    Argentuminvest GmbH
    Richard Mayr
    Investor Relations-Europe
    +49.9421.785250
    +49.9421.785255 (FAX)
    Email:info@argentuminvest.com