Mandorin Goldfields Inc.

Mandorin Goldfields Inc.

January 30, 2006 06:39 ET

Mandorin Goldfields Inc.: Update

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 30, 2006) - Mandorin Goldfields Inc. ("Mandorin" or "the Company") (TSX VENTURE:MGD) is pleased to announce the following:

Duration Projects

As announced on November 21, 2005 Mandorin, on behalf of its Hong Kong joint venture project company, Duration Gold Limited ("DGL"), has reached agreement to acquire a 100% interest in a portfolio of mines and advanced gold projects in Zimbabwe (the "Duration Projects"). Subject to regulatory authority approval. Since that date Mandorin has become intrinsically involved in the management and development of the Duration Projects. Mandorin is pleased to provide the following update on progress:

- Re-organization of the business owning the Duration Projects and The signing of a comprehensive Sale Agreement

- The ownership structure of the Duration Projects has been restructured to allow affective integration with the business of DGL, a holding company by the name of Duration Investments Private Limited (Zimbabwe) ("DIPL") is now the ultimate beneficial owner of the Duration Projects.

- Following completion of due diligence investigations, DGL signed a comprehensive purchase agreement with shareholders of DIPL on 25 January 2006. This agreement supercedes and replaces the binding heads of agreement previously signed.

- The comprehensive sale agreement was presented to the Zimbabwean authorities for statutory approval on 26 January 2006.

- The signing of a full financial participation Agreement with an indigenous party to acquire a substantial participative interest in DIPL

- DIPL has signed an agreement with Eldocia Investments (Private) Limited ("Eldocia") a company that is wholly owned by indigenous Zimbabweans whereby, immediately following the purchase of DIPL by DGL, Eldocia will subscribe for new shares to be issued in DIPL. The initial subscription will be to acquire a 15% full beneficial shareholding in DIPL. Eldocia will pay for the shares in cash, which will be applied to the further development of the business.

- Eldocia holds a first right of refusal to subscribe for additional shares to be issued in DIPL for the fulfillment of indigenization requirements. These shares are to be valued by mutual agreement or alternatively by a suitable international financial institution, on fair and reasonable terms.

- DGL is pleased to welcome Eldocia as a partner in the business. The inclusion of a local partner on full commercial participation basis is clearly value additive and is in line with DGL and Mandorin's business model.

- Agreement with Casmyn Mining Zimbabwe (Private) Limited ("Casmyn")

- As previously reported on November 21, 2005, DIPL has a joint venture arrangement with Casmyn on a group of properties north west of Bulawayo. The proportional holding of the Joint Venture is effectively 49:51 with the majority held by Casmyn. The joint venture is currently completing a feasibility study on the establishment of a 30,000 tonne per month oxide, heap leach operation. The oxide resource on the property is limited to the top 10-30meters.

- During DGL's due diligence investigations of DIPL the potential of the underlying sulphide ore was recognized.

- Historic drilling and sampling indicates the potential for substantial open pittable sulphides. Old oxide workings extend for a combined strike of more than 5000m on the properties and attain widths of as much as 50m with vertical side walls to 15m depth (pit floors in sulphide).

- DIPL assisted by DGL have now agreed with Casmyn that DIPL will acquire the majority interest and management of the sulphide ore joint venture, for a payment of US$51,000 (payable in Zimbabwe Dollars) to Casmyn. In effect the sulphide joint venture will now be 51:49 in DIPL's favour and under DIPL management. DIPL is also required to carry the first US$100,000 dollars of joint venture expenditure, whereafter the parties will contribute in proportion to their respective interests.

Commissioning of the Athens Mine CIP plant

- Despite the usual teething problems associated with plant commissioning, the Athens plant succeeded in producing 7.1kg of fine gold in its first smelt. This production was yielded from tailings re-treatment and is well in line with expectation from this material. Installation of the No 2 mill and crushing plant are proceeding well. Completion of the crushing plant will allow DIPL to treat oxide ore from open pit sources on a static leach, while fines are screened out and added to tailings for milling and CIP treatment.

Final equipment for completion of Queens Mine, milling CIP plant sourced

- A mill motor and screens which were the only remaining requirements needed to complete the 20,000 tonne per month milling, CIP plant at Queens have been sourced and will shortly be shipped from the Port of Durban to Bulawayo. Installation is expected to be complete by the end of March 2006.

Check sampling of Klipwal completed

- The check sampling of Klipwal mine under the supervision of Mandorin's Competent Person, Mr. Peter Haworth has been completed. A total of 2480 samples have been submitted to SGS Lakefield in Johannesburg for fire assay. Results of the first 1680 samples have been returned and are indicating gratifying correlation with historically reported sampling data. It is expected that the historic sampling can be verified to NI43-101 standard at the completion of this exercise.

- Mandorin have also identified an error in the estimation technique previously applied to the wide "J Reef" by previous owners. This reef has historically been mined over an effective mining width of over 10m, however resource estimates ahead of stoping are limited to exploration drive widths of only 1.8m. It appears that historic resource estimates for J reef may be understated by as much as five fold. Mr. Peter Haworth continues to investigate the issue and should shortly be in a position to submit resource estimates for third party competent person's review.


The Company reports that it is continuing to obtain subscriptions for the previously announced non-brokered private placement to raise up to Cdn.$2,400,000 from the sale of up to 34,285,714 common shares of the Company at a price of Cdn.$0.07 per share. This amount includes the increase in the size of the private placement by up to Cdn.$600,000 announced on December 30, 2005. The Company has added an additional over-allotment option to raise up to an extra Cdn.$200,000 by issuing up to 2,857,143 common shares of the Company at a price of Cdn.$0.07 per share. The Company will pay finder's fees allowable under TSX Venture Exchange policies. The private placement is subject to compliance with applicable securities laws and to receipt of regulatory approval.

The proceeds from the proposed private placement will allow Mandorin to undertake/finalize additional due diligence investigations on advanced prospective projects, the progressing of the proposed Klipwal Mine acquisition by Mandorin's joint venture project company, Duration Gold Limited (Mandorin will be advancing by way of shareholder loan, the cash component, as per the agreement terms outlined in the news release of October 31, 2005, to Duration Gold Limited), and for working capital.


"I am pleased to see that our portfolio is taking shape and progressing well on both the technical and administrative sides of the business. We are getting through the sometimes frustrating and time consuming stage of the acquisition process and will soon be able to give more focus to the development of the mines that we are acquiring. Accordingly we are currently giving attention to expanding our management team to provide additional technical and commercial management skills that a business of this size requires.

Discussions with financiers and analysts is affirming the emergence of keen support for the company and its business plan."


Scientific and technical information contained in Mandorin's news releases are verified by Mr. Peter Haworth (Pr Eng; PrSciNat), Vice-President of Mineral Resource Development of Mandorin, acting as Mandorin's "Qualified Person".


On behalf of

Mandorin Goldfields Inc.

Malcolm L Stevens, Executive Chairman and President

Errol Smart, Director and Chief Executive Officer

Statements in this press release other than purely historical information, including statements relating to the Company's future plans and objectives or expected results, constitute forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company's business, including risks inherent in mineral exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements.

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

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