La Quinta Resources Corporation

La Quinta Resources Corporation

August 28, 2006 03:30 ET

La Quinta Options Major Land Position in Democratic Republic of Congo

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 28, 2006) - La Quinta Resources Corp. ("La Quinta or LAQ") (TSX VENTURE:LAQ) is pleased to announce that it has entered into a Memorandum of Understanding (MOU) with Wa Balengela Kasai-Investments Congo sprl, ("WB. Kasai-Congo sprl, or WBK") to explore and develop 7,010 square kilometres of highly prospective gold exploration licences in the southern portion of the Twangiza Namoya Gold belt in the eastern Congo.

The exploration properties are a contiguous group of 32 exploration licences, or Permis de Recherches, totalling 7,010 square kilometres, abutting and occupying all the ground between Banro Corporation's (TSX:BAA) Lugushwa and Namoya properties in the south of the Twangiza - Namoya gold belt and extending some 120 kilometres to the West. Inferred Resources as outlined by Banro Corporation on Lugushwa are indicated to be 37,000,000 tonnes grading 2.3 gpt Gold containing some 2.735 million ounces. Indicated Resources on Namoya are reported to be 4,560,000 tonnes grading 2.97 gpt gold containing 436,000 ounces and Inferred Resources are reported as 7,818,700 tonnes grading 2.61 gpt gold containing 657,000 ounces of gold. Both properties are reported to be open along strike and at depth and Banro reports exploration work is continuing aimed at further extending these resources. (Banro Corporation Website.)

WB. Kasai-Congo sprl is a Congolese mineral company based in Kinshasa that holds a number of extensive mineral leases in the DRC. WBK's principals are Dr. F. Bodika, a Congolese thoracic surgeon and Mr. J. Malaba, a Congolese businessman both of whom have extensive experience in the mineral industry. WBK originally established this land position in 1997 under the previous mining tenure act and subsequently converted the licenses to the current Code Miniere of the Repubique Democratique du Congo. The properties in the licence area have a long history of both formal and informal mining, having been extensively mined, mostly for alluvial gold, by BelgikaOr from the early 1940's to the 1970's when formal mining and exploration ceased. At least six sites of previous mining can be easily identified and artisanal mining continues on much of the target areas today.

Glen Watson, La Quinta's President, stated, "I am very excited to enter into the MOU and to join together in a Joint Venture Company with Dr. Bodika, Mr. Malaba and WBK. Their long history and knowledge of the DRC and its mineral industry when coupled with their outstanding land position in the Twangiza - Namoya gold belt, on trend and between two of Banro Corporation's premier properties, when coupled with the historic gold production from the area, makes this a highly prospective and very attractive package. Working with WBK will give us a huge advantage in the DRC and we are working to mobilise exploration teams with WBK, at the earliest possible opportunity."

The Memorandum of Understanding with WBK gives La Quinta the option to earn up to 80% in a joint venture company with WBK, by funding US$10 million in exploration expenditure over five years, with a minimum expenditure of $2 million per year. Assuming that the exploration work is successful and properties can be taken to Feasibility Study status over the first five years of the agreement, then the Joint Venture will be entitled develop the properties within the 7,010 square kilometre exploration licence areas by converting them to an Exploitation Licence or licences, in accordance with the Code and Regliement Miniere of the DRC.

Upon the commencement of the Joint Venture, La Quinta will hold a 10% interest in the joint venture company and WBK will hold 90% and La Quinta shall have the right to increase its interest in the joint venture company to an 80% interest by making payments to WBK totalling US$1,500,000 and issuing 8,000,000 shares of La Quinta over the first three years of the agreement. Upon completion of all share issuances and cash payments, La Quinta will be vested with an 80% interest and WBK with a 20% interest in the Joint Venture Company.

During the exploration period ownership of the concessions shall remain vested with WBK and will be transferred to the Joint Venture Company on completion of the Feasibility Study as contemplated in the MOU and formal documentation. WBK shall be responsible with assisting the Joint Venture Company with government relations, local liaison and local management and expediting of the projects in the DRC.

On any gold production, the Joint Venture Company shall pay WBK a net smelter return of 2.5%. La Quinta has agreed to pay Finders or Agents fees in respect of the transaction in the amount of 500,000 shares payable by La Quinta in six instalments, over the first three years of the agreement; prorated and made at the same time as La Quinta is required to make share payments to WBK. There is an Area of Mutual Interest (AMI) established stretching 20 kilometres from the outside borders of any of the rights held in the Joint Venture Company. The parties have also agreed that the Joint Venture Company will establish operating, local relations and finance committees with representatives of each of the parties. As part of the agreement, LAQ will offer two representatives of WBK representation on the Board of LAQ.

The MOU provides for a due diligence period during which La Quinta and its advisors have the right to conduct appropriate due diligence into the terms, conditions, validity and enforceability of WBK's concessions and exploration rights in the DRC. A map showing the location and extent of the exploration leases and their relationship to the Twangiza - Namoya gold belt, plus further discussion of the new initiative by La Quinta Resources in the Democratic Republic of Congo can be found on the Company's website at

Malcolm Swallow, a Director of the Company, is a Vancouver based Mining Engineer, (B.Sc. - Hons. Mining Engineering - Imperial College, London), with over 30 years operating and management experience in the Industry. He is an Associate of the Royal School of Mines, a Fellow of the Institute of Materials, Minerals and Mining and a Chartered Engineer in the UK. He is also a registered Professional Engineer in British Columbia, Canada and acted as the Qualified Person for this news release.

On Behalf of the board

Glen R. Watson, President and CEO

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release, which has been prepared by management.

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