Indico Resources Ltd.

TSX VENTURE : IDI
OTCQX : IDIFF


Indico Resources Ltd.

December 20, 2012 10:04 ET

Indico Resources Ltd.: Additional Drill Results From Phase 2 Drilling Campaign, Ocana Porphyry Cu-Mo-Au Project

Best hypogene drill intersection to date:

OCA010 with 300 metres of 0.70% CuEq

- including 57 metres of 1.53% Cu Eq

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 20, 2012) - Indico Resources Ltd. ("Indico" or the "Company") (TSX VENTURE:IDI)(OTCQX:IDIFF) is pleased to provide additional encouraging drill results from the Phase 2 drilling campaign at the Ocaña Cu-Au-Mo porphyry in Arequipa Region, Southern Peru. In Phase 2, a total of 4733 metres were drilled in 19 holes; the additional significant assay results from holes received since the last news release are shown in Figure 1 and Table 1, and all significant intersections are listed in Table 2.

The northeastern-most hole drilled, OCA010, intersected the highest-grade primary (hypogene) mineralization yet encountered within the diorite breccia. This hole assayed 300 metres of 0.49% copper and 0.17 g/t gold, or 0.70% CuEq*, and including 57 metres of 1.11% copper and 0.21 g/t gold. The hole ended at 300.5 metres within mineralization grading >0.3% copper (Figure 2). To the south, within the diorite and diorite breccia, hole OCA011 intersected 103 metres of 0.53% copper, 0.28 g/t Au (0.81% CuEq) before entering dacite breccia, which returned 122 metres of 0.21% copper. Assays are pending for hole OCA014 drilled perpendicular to the southwest from the same platform. Holes to the west are similarly mineralized with significant gold grades accompanying the copper (Figure 3: OCA004 intersected 264 metres of 0.36% copper and 0.15 g/t gold (0.55% CuEq), including 39 metres of 0.69% copper and 0.20 g/t gold (0.94% Cu Eq).

A primary aim of the Phase 2 programme was testing the thickness and grade of sulphide and oxide supergene mineralization intersected by two holes in Phase 1. This supergene mineralization will be the initial focus for resource definition, as it is amenable to low-cost, acid heap-leaching, based on soluble copper tests on core sample pulps from two Phase 1 drill holes. The supergene target was successfully tested by six vertical holes along the crest of the southern ridge (see Figure 1) and expanded into the centre of the system by three angled holes and one vertical infill hole (OCA016). Results from holes OCA003, 7, 12, and 13 indicate that the supergene blanket is consistently approximately 50 metres thick, and consists of copper oxide and sulphate minerals near the top, grading down into dominantly chalcocite at the base, where it transitions sharply to hypogene chalcopyrite mineralization (Figures 2 - 4). In Table 1, intersections within the mixed zone should be amenable to acid heap leaching. The blanket dips to the west subparallel to the ridge crest, and has an east-west dimension of over 700 metres, with a width over 200 metres at the west end, increasing to 400 metres on the east end. Under the central part of the system the blanket averages about 30-45 metres thick and thins to the east as the slope steepens.

Table 1. Additional Significant Phase 2 intersections**.
Drill Hole From
(m)
To
(m)
Interval Cu
%
Mo
(ppm)
Au
g/t
Ag
g/t
CuEq* Zone
OCADH008 0 68.65 68.65 - - - - - overburden
71.5 355 283.5 0.263 62 0.024 1.4 0.326 hypogene
including 163 241 78 0.376 70 0.030 1.9 0.452 hypogene
OCADH009 54 295 241 0.342 97 0.058 1.3 0.446 mostly hypogene
including 54 63.8 9.8 1.438 79 0.054 1.8 1.536 mixed
and 112 295 183 0.339 104 0.060 1.5 0.450 hypogene
OCADH010 0.5 300.5 300 0.487 119 0.168 2.9 0.699 mostly hypogene
including 13.2 29.5 16.3 0.474 86 0.099 2.0 0.609 mixed
and 146.5 176.5 30 1.650 407 0.321 7.8 2.167 hypogene
or 146.5 203.5 57 1.105 426 0.213 5.7 1.532 hypogene
OCADH011 25 250.3 225.3 0.352 182 0.148 1.8 0.569 hypogene
including 25 128 103 0.527 110 0.279 2.3 0.809 hypogene
including 128 250.3 122.3 0.205 243 0.038 1.3 0.367 hypogene
OCADH012 22 69.5 47.5 0.678 61 0.022 1.6 0.741 mixed
69.5 80.35 10.85 0.325 49 0.019 1.8 0.382 hypogene
OCADH013 32 83 51 0.569 147 0.022 1.4 0.673 mixed
83 201.1 118.1 0.237 93 0.020 1.2 0.311 hypogene
*Copper equivalent calculations represent the total metal value for each metal, multiplied by the conversion factor, summed and expressed in equivalent copper percentage. These results are exploration results only and no allowance is made from recovery losses that may occur should mining eventually result. These equivalent grades should not be interpreted as actual grades since the conversion rations vary with the volatile prices of Cu and Mo and the economic recoveries of Cu and Mo can vary significantly in actual extraction and processing. However, it is the company's opinion that elements considered here have a reasonable potential to be recovered. The three-year, moving-average metal prices used for the purposes of the equivalency calculations are copper $US3/pound, gold $US1500/ounce, molybdenum $US15/pound and silver $US21/ounce.
**Results preliminary pending QA/QC review of re-assayed intervals.

Assay results for holes OCA013 to OCA019 are pending.

Bob Baxter, President and CEO commented, "As the results of our Phase 2 program continue to deliver excellent results, not only do the supergene results to date look like they have the potential to support a mid-size SX-EW copper project, but we also see a higher-grade centre in the hypogene taking shape, which we will continue to follow-up in a future campaign."

Based on the successful Phase 2 results, Indico plans to continue with a Phase 3 program of about 30 short (100 metre) infill drill holes at about 100-metre spacing to further delineate the supergene blanket. This programme is expected to start in early 2013.

Table 2. Significant Phase 2 intersections from previous news release.
Hole From
(m)
To
(m)
Interval Cu
%
Mo
(ppm)
Au
g/t
Ag
g/t
CuEq* Zone
OCADH001 27.4 56.3 28.9 0.187 20 0.021 0.6 0.217 mixed
89 440 351 0.231 83 0.030 1.0 0.304 hypogene
including 89 146 57 0.240 190 0.032 0.8 0.366 hypogene
OCADH002 87 294 207 0.219 151 0.091 0.9 0.370 hypogene
including 168 195 27 0.291 557 0.083 1.6 0.645 hypogene
and 234 294 60 0.348 102 0.157 1.3 0.528 hypogene
OCADH003 1.3 27 25.7 0.207 79 0.051 1.5 0.299 oxide
27 78 51 0.491 71 0.049 1.9 0.582 mixed
78 366.1 288.1 0.226 68 0.026 1.1 0.290 hypogene
including 200 272 72 0.297 95 0.031 1.3 0.380 hypogene
OCADH004 4 37.5 33.5 0.509 121 0.115 1.1 0.665 mixed
including 4 24 20 0.694 124 0.087 1.1 0.831 oxide
37.5 301.45 263.95 0.360 112 0.153 1.8 0.546 hypogene
including 94 133 39 0.689 160 0.198 2.9 0.943 hypogene
and 184 301.45 117.45 0.400 120 0.149 2.3 0.569 hypogene
OCADH005 7 33.5 26.5 0.626 130 0.104 1.2 0.779 mixed
33.5 145 111.5 0.501 118 0.121 2.6 0.675 hypogene
including 59 94.8 35.8 0.659 101 0.177 3.3 0.872 hypogene
145 300.25 155.25 0.203 80 0.020 1.0 0.267 hypogene
OCADH006 11 61 50 0.646 115 0.171 2.7 0.856 mixed
including 26 44 18 1.211 199 0.224 3.6 1.511 mixed
114 299 185 0.251 67 0.076 0.9 0.349 hypogene
including 114 177 63 0.356 71 0.183 1.0 0.535 hypogene
OCADH007 34 87.6 53.6 0.809 108 0.046 1.9 0.916 mixed
108 250.05 142.05 0.151 103 0.014 0.7 0.220 hypogene
*Copper equivalent calculations represent the total metal value for each metal, multiplied by the conversion factor, summed and expressed in equivalent copper percentage. These results are exploration results only and no allowance is made from recovery losses that may occur should mining eventually result. These equivalent grades should not be interpreted as actual grades since the conversion rations vary with the volatile prices of Cu and Mo and the economic recoveries of Cu and Mo can vary significantly in actual extraction and processing. However, it is the company's opinion that elements considered here have a reasonable potential to be recovered. The three-year, moving-average metal prices used for the purposes of the equivalency calculations are copper $US3/pound, gold $US1500/ounce, molybdenum $US15/pound and silver $US21/ounce.

To view Figures 1, 2, 3 and 4 please click on the following link: http://file.marketwire.com/release/ISI1220.pdf

Qualified Person

John Drobe, P.Geo., Indico's Chief Operations Officer and a qualified person as defined by National Instrument 43-101, has reviewed the scientific and technical information that forms the basis for this news release. Mr. Drobe is not independent of the Company as he is an officer and a shareholder.

Diamond Drilling and Sampling Procedures

The diamond drilling was completed using exclusively HQ core size. Core recovery was estimated to be greater than 95% for any given hole. Core was evenly split with a diamond saw, with one half collected for sample preparation and analysis, and the other half retained for future reference. Samples were collected on a 2.0m and 3.0m sample interval. Indico on-site personnel rigorously mark, collect, and track samples which are then security sealed and shipped to Acme, Lima, Peru for preparation. Pulps are then forwarded to Acme's analytical lab in Santiago, Chile.

Analytical accuracy and precision are monitored by the analysis of reagent blanks, certified reference material, and duplicate (coarse rejects and quarter core) samples. Indico inserts blind certified reference material at regular intervals (1 in 20) into the sample sequence by field personnel in order to independently assess analytical accuracy. In addition, representative blind duplicate samples are routinely forwarded to Acme for additional quality control (1 in 20 coarse rejects, and 1 in 40 quarter core). Quality control is further assured by the use of certified reference material inserted 1 in 20 samples. Multi-elements were assayed using Acme's 1E package which includes 4-acid digestion and ICP-ES finish; samples with >1% copper are reassayed using an atomic asorption (AA) finish. Lower detection limits are as follows: Cu >0.001%, Mo >0.001%, Ag >0.5g/t. Gold is assayed by fire assay, in which fusion of a 30-gram aliquote is followed by AA finish; with a lower detection limit of 0.005 g/t. Acme has an 9001:2008 and 17025 International Standard Organization rating.

The geochemical results were compiled and reviewed by John Drobe.

About Indico Resources Ltd.

Indico Resources Ltd. is a resource exploration company focused in the discovery and exploration of porphyry copper-gold deposits in South America. The Ocaña Porphyry Project is the Company's primary exploration project and is currently the main focus of exploration activities. Recently, the Company entered into a Memorandum of Understanding to acquire 51% initially and up to 100% eventually by fulfilling the conditions set out in the press release dated 22 October, 2012 of the Maria Reyna Cu-Mo porphyry-skarn project in the Andahuaylas-Yauri Belt, Cusco Region. This belt hosts several significant deposits, including the Las Bambas porphyry-skarn cluster (1.7 billion tonnes of 0.60% Cu), Haquira (690 million tonnes at 0.59% Cu), and the neighbouring Constancia porphyry deposit (reserves of 450 million tonnes at 0.36% Cu). For more information, please visit our website at www.indicoresources.com; follow us on Twitter: @indicoresources and Facebook: Indico Resources Ltd.

The technical information provided in this news release was reviewed and approved by Robert. W. Baxter (FAusIMM), a director of the Company and a qualified person for the purposes of National Instrument 43-101.

On behalf of Indico Resources Ltd.,

Robert Baxter, President and Chief Executive Officer

Cautionary Statement Regarding Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward looking information" within the meaning of the British Columbia Securities Act and the Alberta Securities Act. Generally, the words "expect", "intend", "estimate", "will" and similar expressions identify forward-looking information. By their very nature, forward-looking statements are subject to known and unknown risks and uncertainties that may cause our actual results, performance or achievements, or that of our industry, to differ materially from those expressed or implied in any of our forward looking information. Statements in this press release regarding Indico's business or proposed business, which are not historical facts, are forward-looking information that involve risks and uncertainties, such as estimates and statements that describe Indico's future plans, objectives or goals, including words to the effect that Indico or management expects a stated condition or result to occur. Since forward-looking statements address events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. All of the Company's Canadian public disclosure filings may be accessed via www.sedar.com and readers are urged to review these materials, including the technical reports filed with respect to the Company's mineral properties. The foregoing commentary is based on the beliefs, expectations and opinions of management on the date the statements are made. The Company disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise.

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

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