Caldera Resources Inc.

Caldera Resources Inc.

October 18, 2006 09:24 ET

Caldera Resources Inc.: Completion of Ellendale Project Joint Venture Agreements

SOUTH PERTH, WESTERN AUSTRALIA--(CCNMatthews - Oct. 18, 2006) - Caldera Resources Inc. (TSX:CDR) -


- Further to Caldera's press release of June 6, 2006, Caldera has signed two joint venture agreements with respect to its Ellendale East and Ellendale South projects with Resource and Investment NL("R&I") (formerly Namakwa Diamond Company NL) to advance the next stage of exploration of a significant new diamond discovery within Australia's Ellendale Diamond Field.

- Caldera has completed the issuance of 3,000,000 common shares to Mr Ron Winston, of New York's Harry Winston Inc, in consideration for a release of all of Mr. Winston's rights in and to the Ellendate East and Ellendale South Projects.

- R&I has completed a $250,000 placement with Caldera on the issuance of 2,500,000 common shares priced at $0.10 per share. In addition, R&I has been granted warrants and a pre-emptive right to maintain an aggregate 19.9% fully diluted stake in Caldera, including a right to maintain its interest by participating in future equity issues.

Caldera Resources Inc.("Caldera") today announced that it has executed two joint venture agreements (the "Joint Venture Agreements") with Resource and Investment NL ("R&I") pursuant to which it has granted to R&I an option to acquire a 51% working interest in each of Caldera's Ellendale East and Ellendale South projects.

Prior to the execution of the Joint Venture Agreements, Mr Ron Winston released all of his rights and title to the Ellendale East and Ellendale South Projects in consideration for 3,000,000 common shares of Caldera priced at $0.10 per share. In addition Mr Winston received 5,000,000 ordinary shares of R&I and 500,000 ordinary shares of Blina Diamonds Ltd., a major shareholder of R&I.

Joint Venture Agreements

Under the terms of the Joint Venture Agreements, R&I will have the ability to earn a 51% interest in each project under different commercial terms and conditions.

At Ellendale East, R&I will have the right to earn a 51% interest by:

- spending A$5 million on exploration over a 3-year period, of which at least A$1.5 million is intended to be expended during the 2006 and 2007 field seasons, including large-diameter drilling utilising a Bauer BG 20 rig; or

- in lieu of this, paying to Caldera 49% of that portion of its earn-in exploration commitment not yet spent on the tenements at the time.

At Ellendale South, R&I will have the right to earn a 51% interest by:

- spending A$1.5 million on exploration over a 3-year period from the date on which the tenements were granted; or

- in lieu of this, paying to Caldera 49% of that portion of its earn-in exploration commitment not yet spent on the tenements at the time.

R&I will have the right to relinquish its rights in relation to both projects at any stage during the earn-in period, in which case the joint ventures will terminate and all data accumulated will be handed back to Caldera. Namakwa will manage and be responsible for the development of all work programs on behalf of each joint venture and for the funding of all joint venture expenditure until it has earned its 51% interest.

Mr Ron Winston will have the right to buy, at fair market value, 30% of all run-of-mine production of diamonds produced by both joint ventures from the Ellendale East and Ellendale South tenements, being 15% from Namakwa's 51% interest and 15% from Caldera's 49% interest.

Placement in Caldera Resources

In addition, R&I has completed a private placement of 2,500,000 common shares of Caldera at a price of C$0.10 per share, representing a total investment of C$250,000. As part of this placement, R&I was granted warrants to acquire19,658,752 common shares at a price of $0.15 per share until October 17, 2009. These warrants are being held in escrow and will be released to R&I at the rate of 1,000,000 warrants for each $100,000 expended pursuant to the Joint Venture Agreements until a total of $1,500,000 has been expended at which time all of these warrants will be released. The private placement shares and warrants provide R&I the opportunity to acquire a stake of 19.9% of the entire issued capital of Caldera if all of these warrants were exercised.

Caldera has also issued a further 4,203,656 warrants to R&I each to acquire a common share at a price of $0.15 per share until October 17, 2009. These warrants were issued to permit R&I to maintain its 19.9% stake in Caldera as Caldera's currently outstanding warrants and stock options are exercised. These warrants will only be exercised to the extent that these convertible securities are exercised pro rata to maintain the 19.9% interest.

Finally, R&I has been granted the right to participate in any future equity issues by Caldera to maintain its 19.9% interest. The maximum number of shares that can be issued pursuant to this right is 10,000,000 common shares.

All of the above transactions were approved by shareholders at the annual and special meeting of Caldera held on July 10, 2006.

Exploration Activities

R&I has commenced exploration activities on the Ellendale East and Ellendale South Project. The following is a summary of the activities to date as set out in R&I's press release dated October 18, 2006.

The projects comprise five Exploration Licences and Exploration Licence Applications covering an area of over 800km2, located between 20km and 70km south east of the recently commissioned Ellendale 4 mining operation. Caldera has previously announced the discovery of up to six potential new lamporite pipes within the Ellendale East Project, including a substantial target with an area of more than 200 hectares.

Aircore Drilling Program - Caldera Joint Venture

R&I commenced a major aircore drilling program at Ellendale East in mid-September 2006, which was designed both to confirm previous results and to test magnetic anomalies not yet drilled by Caldera. To date, 17 holes and 1,569 metres of drilling have been completed. R&I's major shareholder, Blina Diamonds NL, is managing and operating the exploration program on a "cost plus" basis, leveraging off its extensive exploration infrastructure in the region.

Drilling has so far been concentrated on anomalies ELL8 and ELL27, where Caldera previously reported microdiamonds and indicator minerals from a "volcaniclastic quartz tuff" intersected at depths of between 50 and 70 metres below surface. The current drilling program has successfully intersected this unit in all holes drilled to date, and approximately one tonne of drill cuttings have been dispatched to Diatech's laboratory in Perth for recovery of diamonds and indicator minerals.

Geophysical surveys completed by Caldera in 2005 identified 47 magnetic targets within the Ellendale East area. Reconnaissance drilling of a number of these targets resulted in the recovery of fragmental rocks containing diamonds and diamond-indicator minerals (chromites). Petrological studies undertaken by Dr Greg Pooley describe the diamond host rock as a "volcaniclastic quartz tuff". The lithology is considered one of the predominant diamond-bearing rocks in the Ellendale Field and was recognised in six of the targets drilled by Caldera.

One of the targets drilled by Caldera covers an area in excess of 200 hectares.

Detailed logging of the recently completed drill holes suggests that "volcaniclastic quartz tuff" occurs as a distinct unit within the Permian-aged, Grant Formation. This interpretation would mean that the material is 250 million years older than the Ellendale Field lamproites and unrelated to this period of volcanism. The identification of diamonds and diamondiferous indicator minerals in rocks of this age suggests the possibility that a new and previously unrecognized diamond emplacement event may exist in the West Kimberley region.

Drilling of the other magnetic targets in the Ellendale East area will continue for another month. Initial results from processing of drill chips are expected to be available within the next three weeks.

Other Activities.

Caldera is engaged in diamond exploration in Australia through five projects. Two projects are located in the Pilbara region of northern Western Australia, one of which is joint ventured with Mr. Ronald Winston of Harry Winston Inc. The Company also has two projects located adjacent to the Ellendale Lamproite Field in the Kimberley region of Western Australia. One project is located on the Yilgarn Craton of Western Australia which is joint ventured with SouthernEra Diamonds Inc. (TSX:SDM). The SouthernEra tenements also include a joint venture with BHP Billiton Limited on a nickel/platinum project.

Caldera also has three base metal/gold projects in South Australia. One of these projects is the Mt. Carulina Project which is an Olympic Dam - style base metal/gold target.


No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This News Release includes certain "forward-looking statements". All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding potential mineralization and reserves, exploration results, and future plans and objectives of Caldera, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially form those anticipated in such statements. Important factors that could cause actual results to differ materially from Caldera's expectations are exploration risks detailed herein and from time to time in the filings made by Caldera with securities regulations.

Cusip: 1287D 105

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