Mazorro Resources Inc.

Mazorro Resources Inc.

December 15, 2010 08:30 ET

Mazorro Announces Option Agreement With Adventure Gold for Lapaska, QC Property and Private Placement for Maximum Proceeds of $250,000

OTTAWA, ONTARIO--(Marketwire - Dec. 15, 2010) - Mazorro Resources Inc. ("Mazorro" or the "Company") (TSX VENTURE:MZO)(FRANKFURT:JAM) announces that it has entered into an agreement with Adventure Gold Inc. (TSX-V: AGE) for an option to acquire up to a total 70% interest in the Lapaska property in the Louvicourt Township of Quebec (the "Property"). The Property is comprised of 26 claims covering an area of approximately 352 hectares located 20 kilometres east of the city of Val d'Or, in the eastern part of the Val d'Or gold mining camp, Quebec.

Under the terms of the option agreement, in order to acquire an initial 50% undivided interest in the Property (the "First Option"), Mazorro is required to provide total cash payments of $250,000, a total of 3,000,000 common shares and has committed to conduct exploration of $1,700,000 over a period of three years from the completion of a definitive option agreement. Consideration payable is summarized as follows:

Date Cash
On signing of the Definitive Agreement 25,000 1,000,000 -  
1st anniversary of the Definitive Agreement 25,000 500,000 500,000 (1 )
2nd anniversary of the Definitive Agreement 50,000 500,000 500,000  
3rd anniversary of the Definitive Agreement 150,000 1,000,000 700,000  
Total 250,000 3,000,000 1,700,000  

(1) Firm commitment from Mazorro.

Following the exercise of the First Option, Mazorro shall have the option to acquire an additional 20% undivided interest in the Property (the "Second Option"), thereby acquiring a total undivided interest of 70%, by making additional cash payments of $2,000,000 and by conducting additional exploration of $6,000,000 over another three year period. Mazorro shall have the option of paying up to 75% of the required cash payments for the Second Option in common shares at a price equal to the market price of the Company's shares on the TSX Venture Exchange (the "Exchange") on the date such payment is payable less the maximum applicable discount allowed by the policies of the Exchange, subject to the required regulatory and corporate approvals, including disinterested shareholder approval, as applicable.

During the First and Second Option periods, Adventure Gold Inc. will remain the operator of the Property. Thereafter, Mazorro shall be entitled to become the operator of the Property.

The completion of the definitive option agreement is subject to: (i) the provision to Mazorro of a satisfactory National Instrument 43-101 ("NI 43-101") compliant technical report on the Lapaska property; (ii) the completion by Mazorro of an initial private placement financing (as described below); (iii) the completion of a second private placement financing (on terms and conditions to be determined at a later date); and, (iv) obtaining the required regulatory approvals including the acceptance of the Exchange. 

The parties have agreed to deploy their best efforts to complete the closing of the definitive agreement by January 31, 2011. The parties can mutually agree to extend this date.

The Lapaska Property

The Property is 100%-owned by Adventure Gold Inc. and is favourably located between the past producing gold deposit Sigma II to the east (150,000 ounces at 2.5 g/t Au: Placer Dome, 1997) which was operated by open pit method and the Simkar gold deposit to the west (NI 43-101 inferred resource of 105,000 oz at 5.3 g/t Au: Megastar – MDV: TSX-V, September 2008). The Property contains three significant gold-bearing zones: the Lapaska Central, West and Lourmet zones and is also strategically located along the prolific Cadillac Larder Lake Gold Break, a regionally extensive structure that is spatially related to numerous gold mines.

Adventure Gold Inc. announced the first NI 43-101 compliant resource estimate for the Property on February 9, 2010 and filed a NI 43-101 technical report on SEDAR on March 19, 2010. The NI 43-101 report was prepared by independent qualified persons from InnovExplo, a consultant firm based in Val d'Or, Quebec. InnovExplo estimated that the Central Zone deposit has Inferred Resources of 220,000 metric tonnes grading 3.14 g/t Au for a total of 22,197 ounces at a cut-off grade of 2.0 g/t Au. Mazorro has requested that InnovExplo update its report for the purposes of the proposed transaction. The Company will file the updated NI 43-101 report supporting mineral resource estimates on SEDAR within 45 days.

Table 1 below summarizes the gold resource estimates using different cut off grades at the Lapaska Central Zone. This information is taken from the InnovExplo technical report prepared for Adventure Gold Inc.

Table 1: Inferred Mineral Resource of Lapaska Central Zone

Cut-off Grade g/t Au Tonnes Avg. Grade g/t Au Ounces of Gold
0.5 2,143,702 1.15 79,324
1.0 864,563 1.81 50,396
2.0 219,590 3.14 22,197

Note: Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.

The InnovExplo technical report recommends additional drilling targeted at adding new resources to the existing mineral inventory at the Property. A 3D isometric view of the block model shows the location of the current resources and the potential to extend these resources by exploration. The ore shoots plunging to the south-east are still open at depth. Additional sub parallel ore shoots that could be repeated in the south-western extension at depth and laterally (east and west) near the surface are still not tested by drilling.

InnovExplo also indicates that the gold mineralization intersected in the West Zone (not included in the mineral resource estimates above) shows similarities to the gold mineralization observed generally in feldspar porphyry dykes ("G dykes") which represent a significant portion of the mineralization at the Sigma Mines (4 million ounces produced). The West Zone is characterized by a series of sub horizontal veins and veinlets bordered by vertical shear zones hosted by a porphyry G dyke type. A drilling program to test the west down plunge of the system below 200 meters is recommended in the West Zone. A 2 kilometre long underexplored area between the West Zone and the Lapaska Central Zone has also been highlighted in the 43-101 report as an area with good exploration potential for gold.

The Property lies at the junction of favourable lithologies and deformation corridors associated to the Cadillac Larder Lake Gold Break. Regional east-west-trending intermediate to felsic dyke swarms favourable to host gold mineralization are found on the property and are often associated with induced polarization (IP) anomalies. The coincidence of favourable lithologies, deformation corridor and IP anomalies represents targets that warrant additional exploration work that will be the subject of Mazorro's initial exploration drilling plans.

"Mazorro is excited to be entering into the Lapaska option agreement with Adventure Gold. The Lapaska property has strong exploration potential and allows us to immediately participate in advanced stage exploration to add to the existing defined mineral resources. We look forward to all the benefits of working in the established Val d'Or gold mining camp and in the mining friendly jurisdiction of Quebec", stated Mr. André Audet, CEO of Mazorro.

"Adventure Gold is very pleased to start a new partnership with Mazorro to explore and develop the Lapaska gold Property. We have already identified quality drilling targets in three different areas and we are ready to start a 4,000 metre drilling program immediately following completion of the definitive agreement" stated Mr. Marco Gagnon, President and CEO of Adventure Gold.

Mr. Jules Riopel, Vice-President exploration and acquisitions of Adventure Gold, is acting as qualified person (as defined by NI 43-101) and has reviewed and approved the scientific and technical information in this press release.

Private Placement Details

The Company announces the initiation of a non-brokered private placement for maximum gross proceeds of $250,000. The Company proposes to issue a maximum of 2,083,333 units (the "Units") at a price of $0.12 per Unit (the "Offering"). Each Unit will be comprised of one common share of the Company and one-half of one share purchase warrant (each whole warrant being a "Warrant"), each Warrant entitling the holder thereof to acquire an additional common share of the Company at a price of $0.20 for a period of two years following the closing of the Offering.

In connection with the Offering, Mazorro may pay finder's fees in accordance with the policies of the Exchange. The proceeds of the Offering will be used by the Company to cover the expenses and initial consideration for this transaction and for ongoing working capital requirements.

Neither the TSX Venture Exchange or 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.

Some statements in this release may contain forward-looking information. All statements, other than of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding potential mineralization) are forward-looking statements. Forward-looking statements are generally identifiable by use of the words "may", "will", "should", "continue", "expect", "anticipate", "estimate", "believe", "intend", "plan" or "project" or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Company's ability to control or predict, that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, without limitation, failure to establish estimated mineral resources, the possibility that future exploration results will not be consistent with the Company's expectations, changes in world gold markets or markets for other commodities, and other risks disclosed in the Company's public disclosure record on file with the relevant securities regulatory authorities. Any forward-looking statement speaks only as of the date on which it is made and except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement.

Contact Information

  • Mazorro Resources Inc.
    Andre Audet
    Chief Executive Officer