Dynamite Resources Ltd.
TSX VENTURE : DNR

Dynamite Resources Ltd.

July 09, 2007 08:30 ET

Dynamite Resources Ltd.: Major Diamond Drilling Program Commences at Lake Torrens IOCG(U) Prospect Adjacent to Olympic Dam, South Australia

Highlights - Drilling has commenced at the Titan Prospect within the Lake Torrens IOCG(U) Project, South Australia. - The Titan Prospect is a confirmed IOCG(U) - style mineralized system. - The Lake Torrens IOCG(U) Project is located immediately to the north, east and west of the world class BHP Billiton Limited's Olympic Dam Mine in South Australia. - The Titan Prospect is located approximately 25km from Olympic Dam

TORONTO, ONTARIO--(Marketwire - July 9, 2007) -

NOT FOR ISSUE IN THE UNITED STATES OR TO U.S. NEWSWIRE SERVICES

Dynamite Resources Ltd. ("DNR") (TSX VENTURE:DNR) is pleased to announce the commencement of drilling on the Lake Torrens Iron-Oxide Copper Gold Uranium ("IOCG(U)") Project in South Australia. Dynamite can earn up to a 51% interest in the project from WCP Resources (ASX:WCP) through a combination of exploration expenditures and a fixed call option.

Drilling has commenced at the Titan Prospect using a rig capable of drilling both reverse circulation ("RC") pre-collars and diamond tails to combined depths in excess of 900m. This machine will drill RC pre-collars for the first three high priority holes and then commence diamond drilling the "tails". A second diamond rig is currently being mobilized to drill the remaining "tails". The drillholes have been designed to test gravity anomalies that are associated, but not coincident with magnetic anomalies within basement rocks from approximately 650 metres depth.

Drilling is also planned during this campaign at the Marathon South prospect located 25 km northeast of Olympic Dam, where strongly haematite-altered breccias were first intersected by Tasman Resources NL (ASX:TAS) in late 2005.

"We are drilling high quality IOCG(U) targets adjacent to Olympic Dam. Our partner on the Lake Torrens Project, WCP Resources, have the operational skills and regional knowledge to undertake discovery drilling programs and bring any future resources to account" states Dynamite Resources Chairman Stan Bharti.

Titan Prospect Background

Titan Prospect is a confirmed large iron-oxide, copper-gold-uranium mineralized system, approximately 30km north of Olympic Dam. It was first drilled by Western Mining Corporation immediately after the discovery of Olympic Dam, and followed up with further drilling by Tasman Resources. Best intersections to date include:

- BD 1: 334m at 0.1%Cu;

- TI 2: 154m at 0.08% Cu, 17ppb Au, 0.5ppm Ag, 40ppm U; and,

- TI 6: 47m at 0.30% Cu, 60ppb Au (inc. 5m at 1.14% Cu, 0.25ppm Au)

To date, only a very small part of the overall system (covering an area of approximately 20km2) has been tested, and the Company believes that there is good potential for intersections of much higher grades than previously measured.

Exploration Expenditure and Farm-in Arrangements

Dynamite can earn up to a 51% interest in the Lake Torrens Project from WCP Resources. WCP Resources has a joint venture with Tasman Resources Limited on the Lake Torrens Project. WCP Resources has the right to earn 65% of the Lake Torrens Project, by incurring expenditures of Australian Dollars ('AUD')6.5 million. Dynamite has agreed to fund the AUD6.5 million expenditure over a 5 year period, in exchange for 50% of WCP's interest in the Lake Torrens Project. Dynamite has a call option to increase its overall equity in the Lake Torrens Project to 51% by paying a pre-determined amount to WCP Resources. The transaction is subject to the completion of Formal Agreements which are expected to be concluded by 31 July 2007 or such other dates as agreed by Dynamite & WCP Resources.

Tau Mining Limited (UK) Update - Uranium Properties

Further to the previously announced acquisition of Tau Mining by Dynamite Resources, the Company has successfully completed one of the key milestones to conclude this transaction, namely its subsidiary, Tau Finance Inc. ("Finco"), has closed its previously announced private placement financing (the "Offering") of subscription receipts (the "Subscription Receipts"). The total offering was for 56,250,000 Subscription Receipts at a price of $0.80 per Subscription Receipt for gross proceeds of $45 million. Dynamite intends to use the net proceeds from the Offering to acquire Tau Mining Limited (UK) ("Tau Mining"), exploration expenditures on the Company's and Tau Mining's properties and for general corporate purposes, as more particularly described in the press release of the Company on June 14th, 2007.

Dynamite is in the process of preparing the offer documents for Tau shareholders and the meeting materials for a special meeting of Dynamite shareholders to be held on August 7, 2007.

Dynamite's Chairman, Stan Bharti, also stated that "We are very excited about the Tau Mining acquisition as it provides terrific access to uranium within the prolific Tien Shan Mineral Belt."

Qualified Person

The technical and scientific information in this document is based on information compiled by Mr Gavin Daneel, who is a Member of The Australasian Institute of Mining and Metallurgy and qualifies as a qualified person under National Instrument 43-101. Mr Daneel, who is a full-time employee of WCP, has reviewed the technical and scientific information in this press release.

Cautionary Note Regarding Forward-Looking Information. This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the future financial or operating performance of the Company, its subsidiaries and its projects, statements regarding exploration prospects, statements regarding the potential and financial impact of the proposed transaction, the terms and conditions of the acquisition, receipt of requisite approvals and the execution of definitive agreements, the benefits of the proposed acquisition, the identification of mineral reserves and resources, costs of and capital for exploration projects, exploration expenditures, timing of future exploration, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, title disputes or claims, limitations of insurance coverage and the timing and possible outcome of pending litigation and regulatory matters. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, political and social uncertainties; the actual results of current exploration activities; delay or failure to receive board or regulatory approvals; timing and availability of external financing on acceptable terms; not realizing on the potential benefits of the proposed transaction; conclusions
of economic evaluations; changes in project parameters as plans continue to be refined; future prices of mineral prices; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and shortages and other risks of the mining industry; and, delays in obtaining governmental approvals or required financing or in the completion of activities. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

To view a copy of "Lake Torrens IOCGU Project" map, please visit the link below:

http://www.ccnmatthews.com/docs/drlmap1.pdf

To view a copy of "Proposed Drilling Campaign for Titan Prospect" map, please visit the link below:

http://www.ccnmatthews.com/docs/drlmap2.pdf

THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ACCURACY OF THIS RELEASE.

Contact Information

  • Dynamite Resources Ltd.
    Stan Bharti
    (416) 861-5876