Discovery Ventures Inc.

April 04, 2011 09:01 ET

Discovery Ventures Inc. Announces Option Agreement With Minera La Sarita

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 4, 2011) - Discovery Ventures Inc. ("Discovery") (TSX VENTURE:DVN) is pleased to announce that the TSX Venture Exchange has accepted for filing the Option Agreement with Minera La Sarita S.A. de C.V. (a private Mexican company) announced in the news release dated December 8, 2010.

Discovery can earn an 80% interest in four mining concessions covering an area of approximately 829 hectares (2048 acres) known as the La Sarita property located approximately 20 kilometers southwest of Moctazeuma, Sonora, Mexico.

Pursuant to the terms of the Agreement, Discovery can exercise the option by paying the Vendor:

1. $225,000 on the closing of the Agreement; $300,000 on or prior to the first anniversary of closing; $500,000 on or prior to the second anniversary and $1,000,000 on each of the third 3rd and 4th anniversaries in addition to $25,000 which has been paid to date.

2. Additionally, Discovery is required to issue 1,000,000 common shares on or prior to closing; 2,500,000 shares on or prior to the 2nd anniversary of closing; 3,000,000 shares on or prior to the 3rd anniversary of closing; and 4,000,000 shares on each of the 4th and 5th anniversaries of closing.

3. Lastly, Discovery is required to incur the following property expenditures: $300,000 on or prior to each of July 27, 2011 and 2012; $500,000 on or prior to July 27, 2013; and $800,000 on or prior to July 27, 2014.

4. Notwithstanding the above, Discovery may make a one time lump sum cash payment of the Vendor in lieu of any remaining payments or expenditures on or prior to the following dates: $1,000,000 on or prior to July 27, 2011; $1,250,000 on or prior to July 27, 2012; $1,500,000 on or prior to July 27, 2013; or $2,000,000 on or prior to July 27, 2014.

Upon the exercise of the option, the parties have agreed to participate in a joint venture to carry out further exploration and development work. Discovery's initial participation interest in the joint venture will be 80% and the Vendor will hold the remaining 20%. Following exercise of the option and upon commencement of commercial production, Discovery has agreed to pay a 3% net smelter return royalty to the Vendor, 1.5% of which can be repurchased by Discovery for the payment of $2,000,000, at any time. The Vendor has granted a right of first refusal to Discovery in the event the Vendor offers to sell or transfer any of its 20% interest in the property.

Dr. Matt Ball, P.Geo. states in his 43-101 qualifying Report on the La Sarita property:

"A two-phase exploration program is recommended for the property. The initial phase, estimated at CDN $300,000 includes geological mapping, trenching and drilling. The second phase will consist of geochemical and geophysical surveys and exploratory and possibly in-fill drilling. The second phase is estimated at CDN $580,000.

Phase 1 will test readily apparent epithermal vein/replacement zones and delineate other partially exposed zones of skarn and disseminated mineralization. The first objective is to define a zone of high-grade silver-copper mineralization (in the order of 20 meters in width and 100 meters strike length or more). The second objective is to better define skarn zones and areas of disseminated mineralization or widespread alteration. Phase 2 is designed to follow-up results of phase 1 where warranted and to explore for additional zones of skarn and disseminated copper mineralization.

La Sarita is a property of merit and continued exploration is recommended. Reconnaissance exploration work ahs successfully identified high-grade silver mineralization in veins, high grade copper in replacement zones and disseminated style copper mineralization. Exploration should continue, aimed at evaluating the known zones, identifying high grade zones and exploring the area for a large zone of low-grade copper mineralization."

The necessary equipment and labour force is in place to begin the first phase of this program and work is expected to begin right away.

On Behalf of the Board,
David W. Rees, President

This press release contains projections and forward-looking information that involves various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance of Discovery such as the statement that the closing of the Agreement may occur and that the option may be exercised. There are numerous risks and uncertainties that could cause actual results and Discovery's plans and objectives to differ materially from those expressed in the forward-looking information, including the inability to obtain exchange approval or inability to close the agreement for any reason. Actual results and future events could differ materially from those anticipated in such information. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice.

Neither the TSX Venture Exchange Inc. nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange Inc.) accepts responsibility for the adequacy or accuracy of this press release.

Contact Information

  • Discovery Ventures Inc.
    Dave Rees
    (604) 290-5696