Gold-Ore Resources Ltd.
TSX VENTURE : GOZ

Gold-Ore Resources Ltd.

August 10, 2005 11:34 ET

Gold-Ore Resources Ltd.: Heads of Agreement Signed to Acquire Bjorkdal Gold Mine, Sweden

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 10, 2005) - Gold-Ore Resources Ltd. (the "Company") (TSX VENTURE:GOZ) is pleased to announce that it has signed the Heads of Agreement (HOA) to purchase 100% of the share capital of Bjorkdalsgruvan AB of Sweden from Minmet plc of Dublin, Ireland. The assets of Bjorkdalsgruvan AB include the operating mine, plant, reserves/resources and exploration properties of the Bjorkdal gold mine located in northern Sweden.

Agreement

Under terms of the HOA, the Company will pay Minmet a total of US$3.0 million in cash and US$5.0 million in cash and/or equivalent value of common shares over a five year period as per the table below. On signing the HOA, and each month until closing a Share Purchase Agreement (SPA), the Company will pay Minmet US$25,000. These payments are credited against the initial payment due on closing the SPA. The Company intends to complete a comprehensive due diligence review of the assets within 120 days.



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Equivalent Value of
Due Date Cash Payment Common Shares
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On closing the SPA $500,000 PLUS $ 500,000
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On or Before 1st Anniversary $500,000 PLUS $ 750,000
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On or Before 2nd Anniversary $500,000 PLUS $1,000,000
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On or Before 3rd Anniversary $500,000 PLUS $1,250,000 or cash
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On or Before 4th Anniversary $500,000 PLUS $1,500,000 or cash
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On or Before 5th Anniversary $500,000
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General Project Description

Bjorkdal is located 30 kilometres northwest of the city of Skelleftea and 750 kilometres north of Stockholm, Sweden. The area has a long history of mining and has developed excellent infrastructure including paved roads, low cost hydropower and a skilled labour force. Community support for mining ventures is very strong. The climate of north Sweden is moderated by the Gulf Stream and is very similar to Timmins, Ontario. At full production Bjorkdal was Europe's largest gold mine and has produced 850,000 ounces of gold since 1988. Minmet acquired the operation in 2003 and completed a thorough compilation of the database and significantly reduced plant operating costs.

Reserves and Resources

The open pit mine contains proven and probable reserves of 1,612,000 tonnes grading 1.94 grams/tonne Au for 101,000 ounces of gold. Measured and indicated resources are 6,870,000 tonnes grading 1.61 grams/tonne Au for 345,500 ounces and inferred resources of 3,000,000 tonnes grading 1.71 grams/tonne Au for 164,500 ounces.

The three-dimensional block model was established by Multiple Indicator Kriging methods with Datamine software. (Parameters: US$400/oz gold price, 0.77 grams/tonne gold cut-off, mining dilution 5%, mining recovery 95% and recovered revenue of 80.87%.) Mineral resources which are not mineral reserves do not have demonstrated economic viability. The reserves and resources calculations (December 13, 2004) were prepared by Dan Tucker BSc Honors, FGS and were checked and signed off by Hans-Eric Lundgren of ARRC Geological Consulting, a geologist and registered "Qualified Person" by the Svenska Gruvforeningen (Swedish Mining Association) and are fully consistent with Australia's JORC reporting code. The Qualified Person has no relationship to the Company. The Bjorkdal mine is fully permitted modern operating mine and is only materially affected by the price of gold. There are no other issues that materially affected the estimates of the mineral resources and mineral reserves.

Under average historical production rates of approximately 65,000 ounces per year, the current reserves could sustain production for 1.5 years. The Company plans to conduct additional grade control drilling to further define the reserves and convert resources to reserves thereby extending the life of the mine. Currently the plant is processing low grade, B-ore stockpile material and produces over 20,000 ounces of gold per year. There is sufficient B-ore stockpile for 4 to 5 years production.

Processing Plant

The 1.3 million tonne per year plant was built in 1988 and in a report dated February, 2003, SRK Consulting considered the plant to be capable of treating ore without significant capital injection. Further, SRK considers plant performance can be improved through optimization of the flowsheet. Historical gold recoveries have been 90% utilizing gravity concentration and a flotation circuit.

Geology and Exploration

The Bjorkdal deposit is located within the prolific Skelleftea greenstone belt. Over 130 deposits have been found along the belt including the famous Boliden gold-rich massive sulphide deposit that produced over 3 million ounces of gold at an average grade of 15 grams/tonne Au. Although most of the deposits are mined for base metals, many contain significant gold. The Bjorkdal deposit is a gold-only Intrusion Related Gold System (IRGS) similar in many respects to world class gold deposits including Fort Knox and Pogo in Alaska. The gold is contained in quartz veins within a granodiorite intrusion. The geochemical signature is classic IRGS and includes anomalous tungsten and bismuth. Included in the Bjorkdal assets is an extensive regional and local geochemical data base. Eleven exploration targets with highly anomalous gold values in till are found within a 5 kilometre radius of the mine.

"This is an exciting opportunity and marks the beginning of a new era for the Company" states Glen Dickson, Chairman and CEO of Gold-Ore. "Sweden is very supportive of the mining industry and there are no mineral royalties. We believe that there is the potential to expand the reserve base and extend the life of the open pit. In addition, there are numerous gold and base metal exploration targets in proximity to the mine."

Complete Bjorkdal property information will be posted shortly on the Company's web site at www.goldoreresources.com. Robert S. Wasylyshyn, P. Geo. is the Company's Qualified Person for the Bjorkdal Project.

ON BEHALF OF THE BOARD

Glen Dickson, Chairman


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

Contact Information

  • Gold-Ore Resources Ltd.
    Glen Dickson
    (604) 687-8884
    or
    Gold-Ore Resources Ltd.
    Bob Wasylyshyn
    (604) 687-8884
    (604) 629-0400 (FAX)
    www.goldoreresources.com