Eloro Resources Ltd.

Eloro Resources Ltd.

July 16, 2007 15:52 ET

Eloro Options Four James Bay District Properties to NFX Gold Inc.

TORONTO, ONTARIO--(Marketwire - July 16, 2007) - ELORO RESOURCES LTD. (TSX VENTURE:ELO) ("Eloro" or the "Company") is pleased to announce that it has signed a Letter of Agreement with NFX Gold Inc. ("NFX") allowing NFX to earn a 50% interest in four of Eloro's wholly-owned James Bay District properties in the La Grande volcano-sedimentary belt located north of Goldcorp Inc.'s Eleonore Gold Prospect area. The properties involved in the transaction are the Lemoyne North, Horseshoe, Taiga and Taiga West claim blocks (collectively, the Properties).

Under the terms of the agreement, NFX has an option to earn a 50% interest in the Properties by incurring C$3,000,000 on exploration related expenditures on or before July 15, 2011, as follows:

- C$500,000 on or before July15, 2008

- an additional C$750,000 on or before July 15.2009

- an additional C$750,000 on or before July 15, 2010, and

- an additional C$1,000,000 on or before July 15, 2011

The Properties are currently encumbered with a 1% Net Smelter Return royalty. The obligations of the existing royalty agreement will be assigned from Eloro to the joint venture, subject to the terms thereof.

Since there are common directors to each of the companies, the Board of Directors of each of Eloro and NFX struck an independent committee to review and assess the proposed transaction (the "Proposed Transaction"). In each case, the independent committee was composed of one independent director who is an experienced geologist. Each independent committee reviewed the Proposed Transaction and its underlying property and concluded that the Proposed Transaction was comparable to transactions between other mineral exploration companies relating to comparable properties. Each independent committee recommended to its respective Board of Directors that the Proposed Transaction be approved. The Proposed Transaction is subject to approval of the Boards of Directors and any necessary regulatory approvals.

The Lemoyne North and Horseshoe properties total 99.8 square kilometers and are now contiguous as a result of Eloro staking additional claims in the area in June 2007. The Lemoyne North property straddles the northern border of the Poste Lemoyne Property where Virginia Mines Inc. has outlined a 95,000 ounce gold resource grading 14.5 g/t Au, that included intersections of up to 43.09 g/t gold over 11.65 meters (Source: Virginia Mines Inc. website). Recent work completed at the Lemoyne North Property has identified felsic volcanic rocks with mineralization and alteration similar to the world-class gold deposits in the Doyon-Bousquet-LaRonde belt of the Abitibi. The work has identified target areas for immediate drilling in areas where the alteration is strongest, and where Eloro's 2006 shallow drilling intersected semi-massive sulphides anomalous in gold, silver and zinc. Historic grab sample assays at Lemoyne North (Virginia Gold Mines, 1996, Boreal Exploration, 1998), include grades up to 4.04% copper, 21.22 g/t gold and 38 g/t silver.

The Taiga and Taiga West properties are comprised of 161 claims, totalling 82.7 square kilometers. Both properties are also contiguous as a result of recent additional claim staking by Eloro. At Taiga, the property hosts grab samples with significant assays (Boreal Exploration, 1999) carrying up to 19.34 g/t gold, 2.13% copper and 2.73% zinc.

About Eloro Resources Ltd.

Eloro is a junior exploration company focused on discovering and developing precious and base metal quality resources in the James Bay and Otish Basin districts of northern Quebec, and the Timmins Camp of northern Ontario. Eloro currently has eleven gold-copper-silver properties (807 claims) covering 410 square kilometers in the La Grande and Eastmain Greenstone Belts, proximal to Goldcorp's Eleonore Gold Prospect. Eloro also has an option to earn a 50% interest in 31 claims held by Virginia Mines Inc. Additionally, Eloro now owns 90 km2 of prospective uranium holdings in 10 properties (175 claims). The Timmins area holdings now include both the prospective Silver-Zinc-Gold Hurdman Property, and the 30 square kilometers McArthur Lake Nickel Property.

The technical content of this press release has been reviewed by Martin Bourgoin, P. Geo., Executive Vice-President, Exploration of Eloro, and the Company's Qualified Person under the guidelines of National Instrument 43-101.

Statements in this release that are not historical facts are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Readers are cautioned that any such statements are not guarantees of future performance, and that actual developments or results, may vary materially from those in these "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

  • Eloro Resources Ltd.
    Thomas G. Larsen
    President and CEO
    (416) 868-9168
    Eloro Resources Ltd.
    Jorge Estepa
    (416) 868-9168
    (416) 361-1333 (FAX)
    Website: www.elororesources.com