NMC Resource Corporation
TSX VENTURE : NRC

NMC Resource Corporation

March 22, 2011 09:25 ET

Initiating Its First Acquisition in North America NMC Resource Announces Letter of Intent

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 22, 2011) - NMC Resource Corporation (TSX VENTURE:NRC) ("NMC Resource") NMC Resource is pleased to announce that it has signed a letter of intent (the "LOI") with Xstrata Copper Canada ("Xstrata") with respect to the Boss Mountain molybdenum mine property ("Boss Mountain" or the "Property"). The LOI is non-binding and is subject to a definitive agreement to be entered into between NMC Resource and Xstrata with respect to the subject matter hereof.

By optioning Boss Mountain, NMC Resource will execute its stated intention to do acquisitions in North America, with a view to producing mineral commodities to compliment production from its NMC Moland molybdenum mine in South Korea. The Property was operated sporadically by Noranda in the 1960's, 70's and 80's mainly as an underground mine and produced molybdenum ("Mo") ore at average grades ranging from 0.189% Mo (0.315% MoS2) to 0.26% Mo (0.43% MoS2). It was closed in 1983 due to low Mo price and has not been in operation since.

When Noranda terminated mining operations, there was still a considerable resource (non-compliant with NI 43-101) remaining to be exploited. NMC Resource intends to confirm and expand upon this resource with its planned exploration programs. The surface area adjacent to three small open pits was drilled by Noranda to test the extent of near surface mineralization and this zone will be examined further by NMC Resource. The model that NMC Resource is working towards is an open pit mine with grades consistent with those currently being mined in similar operations.

Mr. Yoo Sup Han, President and CEO of NMC Resource says, "We visited the Boss Mountain mine site and reviewed all maps and data available. We also checked the existing tailings dam with a consultant, which has been well taken care of and has capacity for additional tailings. We see this as great opportunity for our company to develop a new molybdenum operation at Boss Mountain. We intend to drill and define the resource as soon as we can."

The Property is located approximately 10 kilometres west of Hendrik Lake, BC within Cariboo Mining District. It has road access and a power line. Certain permits are still in place for the Property.

Under the terms of the LOI, Xstrata will grant to NMC Resource an option (the "Option") to earn a 100% interest in the Property during an option period of three years by: (i) incurring expenditures on the Property in an aggregate amount of not less than CAD$1,000,000 and up to CAD$3,000,000; and (ii) conducting drilling on the Property of no less than 10,000 meters, at least 50% of such drilling to be situated in the areas delineated and marketed as "target zones" to be mutually identified and agreed upon.

Additionally, Xstrata will retain the right to back-in (the "Back-in Right") to a 49% interest in the existing deposit on the Property (the "Existing Deposit") for payment equal to: (i) 2 times the expenditures incurred by NMC Resource on the Existing Deposit if the Back-in-Right is exercised on or prior to the said expenditures totaling up to CAD$10,000,000; and (ii) 3 times the expenditures incurred by NMC Resource on the Existing Property if the Back-in-Right is exercised on or after the said expenditures in excess of CAD$10,000.000. Upon the exercise of the Back-in Right, a joint venture will form between Xstrata and NMC Resource with respect to the Existing Deposit. In the event Xstrata does not exercise the Back-in-Right, then NMC Resource will pay to Xstrata: (i) an option exercise payment of CAD$5,000,000 in equal installment over a period of five years, to commence after the payback of development costs on the Property has been achieved; and (ii) a 2% net smelter return royalty (the "Royalty") with respect to the Property.

Xstrata will retain the right to back-in to a 51% interest in any new deposit (excluding the Existing Deposit and over a threshold of 500,000 tonnes of copper equivalent) for payment of CAD$10,000,000. Upon the exercise of the New Deposit Back-In Right, a joint venture will form between Xstrata and NMC Resource. The exercise of the New Deposit Back-In Right will effectively extinguish any Royalty obligations with respect to the new deposit.

NMC Resource Corporation: NMC Resource has been producing molybdenum from its NMC Moland Mine in South Korea since April 2010. NMC Resource is a part of Dong Won Resource Group in South Korea. Dong Won Resource Group has been involved in production of iron, gold, coal, oil and gas since 1962.

NMC RESOURCE CORPORATION

Yoo Sup Han; President, Chief Executive Officer and Director

Forward-Looking Statements: This news release includes certain forward-looking information and forward-looking statements (collectively "Forward-Looking Statements") concerning the future performance of the Company's business, operations and financial performance and condition, as well as management's objectives, strategies, beliefs and intentions. Specifically, this news release includes Forward-Looking Statements regarding NMC Resource's plan to "execute its stated intention to do acquisitions in North America, with a view to producing mineral commodities to compliment production from its NMC Moland molybdenum mine in South Korea", NMC Resources' intention to "confirm and expand upon this resource with its planned exploration programs", NMC Resources' plans "to develop a new molybdenum operation at Boss Mountain" by intending to "drill and define the resource as soon as we can", NMC Resource's option to earn a 100% interest in the Property during an option period of three years and that Xstrata will retain the right to back-in with respect to the Existing Deposit and the New Deposit. Forward-Looking Statements are frequently identified by such words as "may", "will", "plan", "expect", "anticipate", "estimate", "intend" and similar words referring to future events and results. Forward-Looking Statements are based on the current opinions and expectations of management. All Forward-Looking Statements are inherently uncertain and subject to a variety of risks and uncertainties, including the speculative nature of mineral exploration and development generally and specifically in respect of the interpretation of the geology, continuity, grade and size of mineral deposits, unanticipated operational or technical difficulties, fluctuating commodity prices, competitive risks and the availability of financing, changes in laws or regulations, changes in the financial markets and changes in general economic conditions, as described in more detail in our recent securities filings available at www.sedar.com. Such Forward-Looking Statements are based on a number of assumptions, including but not limited to the level and volatility of the price of molybdenum, the availability of financing, the accuracy of reserve and resource estimates and the assumptions on which those estimates are based and the ability to achieve and maintain certain operational efficiencies. Should one or more risks and uncertainties materialize or should any assumptions prove incorrect, then actual events or results may differ materially from those expressed or implied in the Forward Looking-Statements and we caution against placing undue reliance thereon. We assume no obligation to revise or update these Forward-Looking Statements, except as required by applicable law.

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

Contact Information

  • NMC Resource Corporation
    DH (Do Hyung) Kim
    (604) 643-1730
    (604) 642-6192 (FAX)
    www.nmcresource.com