Lero Gold Corporation

Lero Gold Corporation

December 01, 2006 07:30 ET

Lero Gold Corporation: Acquisition of the Karchiga Copper-Gold Project North East Kazakhstan

LONDON, UNITED KINGDOM--(CCNMatthews - Dec. 1, 2006) - Lero Gold Corp. ("Lero", or the "Company") (TSX VENTURE:LER) is pleased to announce that it has entered into an agreement to purchase 73.9% of "Eildon Enterprises Ltd" the registered and beneficial owner of 94.75% of the capital of GRK MLD LLP ("MLD"), a limited liability partnership incorporated under the laws of the Republic of Kazakhstan. Upon completion of this transaction Lero will indirectly own 70% of MLD.

MLD holds the rights to subsoil use for exploration and mining of copper on the Karchiginskoye Deposit in the Eastern-Kazakhstan Area of the Republic of Kazakhstan ("Karchiga"), and is expected to enter into a contract with the Ministry of Energy and Mineral Resources of the Republic of Kazakhstan (the "Competent Authority"), which will permit MLD to explore and mine at Karchiga, in accordance with the laws of the Republic of Kazakhstan. MLD has submitted a draft contract to the Competent Authority and it is expected that the contract will be signed in the next few weeks. The consideration for the acquisition of the Eildon shares will be the repayment by Lero of certain historic expenses and the assumption of certain liabilities in connection with the exploration of Karchiga, and the issuance by Lero of 2,000,000 common shares. Completion of the acquisition is subject to the approval of the TSX Venture Exchange.

The Karchiga Copper-Gold deposit, which covers a total area of 47.3km2 is a mid-Palaeozoic aged metamorphosed volcanic hosted massive sulphide deposit (VHMS) located in the extreme NE of the Republic of Kazakhstan, within 40km of the Chinese border. The project is readily accessible and is situated on gentle undulating terrain. Three short diamond drill holes drilled during October 2005 confirmed the presence and continuity of high grade massive and disseminated copper sulphide mineralisation at the property. The mineralisation is contained within a shallow dipping tabular structure ranging from 2m to 25m in thickness with a strike length exceeding 1.3 km. The deposit is geologically robust and is situated within the world class Rudny Altai VHMS belt resulting in significant potential for the discovery of additional mineralisation along 10 strike km of the fertile VHMS horizon contained within the license perimeter.

The deposit was discovered and explored by Soviet geologists during the 1940's and 50's. There has been no systematic exploration of the deposit since that time. Lero sees excellent potential to implement modern exploration techniques and detailed exploration of a number of existing geophysical and geochemical anomalies that to date remain inadequately tested within other parts of the license.

President and CEO of Lero, Nick Clarke said:

"We see the addition of the Karchiga deposit to the Lero portfolio as another step towards achieving our goal of establishing a strong portfolio of gold and base metal properties in central Asia. The acquisition of Karchiga increases the current exposure to a very buoyant base metal market and the potential to increase the company's resource base through discovery".

Notes to Editors:

1. Lero Gold Corporation (TSX VENTURE:LER) is a new base and precious metal exploration company led by a senior management team with extensive expertise in mineral exploration and advanced project management. In July, 2006 Oriel Resources Plc completed its previously announced transfer and sale of its gold related assets into Lero Gold Corporation ('Lero') (formerly ELE Capital Corporation - 'ELE'). Lero resumed trading on TSX Venture Exchange (TSX-V) on Thursday July 27, 2006 under the trading symbol "LER". Lero Gold is currently seeking and evaluating advanced exploration stage gold and base metal projects in Kazakhstan, Kyrgyzstan and Russia. The Company is currently exploring two advanced staged gold deposits in the Tien Shan gold belt in the Kyrgyz Republic.

The TSX venture exchange does not accept responsibility for adequacy or accuracy of this release.

Contact Information

  • Lero Gold Corporation
    Nick Clarke
    President & CEO
    +44 (0) 20 7514 0590
    Lero Gold Corporation
    Darryl Yea
    Non-Executive Chairman
    (604) 699-2458
    Lero Gold Corporation
    Gavin Dallas
    Marketing and PR
    +44 (0) 20 7514 0590
    Bankside Consultants
    Michael Padley / Michael Spriggs
    +44 (0) 20 7367 8888
    Lero Gold Corporation
    Patrick Elliot
    Manager IR
    (604) 643-1744
    Email: info@lerogold.com
    Website: www.lerogold.com