Mindoro Resources Ltd.
TSX VENTURE : MIO
FRANKFURT : OLM

Mindoro Resources Ltd.

February 26, 2008 09:00 ET

Mindoro Resources Ltd.: Expanded Nickel Laterite Resource Potential Enhances Foundation for Value-Added, Local Processing

EDMONTON, ALBERTA--(Marketwire - Feb. 26, 2008) - Mindoro Resources Ltd. (TSX VENTURE:MIO)(FRANKFURT:WKN 906167) is pleased to advise that reconnaissance geological mapping of its Surigao District tenements, north of its Agata project, has greatly expanded their global nickel laterite resource potential. Mapping at Agata had previously outlined an area of potential nickel laterite mineralization covering approximately 600 hectares in the Agata North and Agata South project areas where resource delineation drilling programs are ongoing. Results of the regional mapping program indicate potential for a further 1,650 hectares of nickel laterite mineralization on the adjacent Tapian Main, Tapian SF and Mat-I tenements. This further reinforces Mindoro's plans to evaluate the feasibility of establishing a local processing plant to maximize economic returns to all stakeholders.

SURIGAO NICKEL LATERITE DISTRICT

The Surigao District in north-east Mindanao, Philippines, is not only a current and historical gold producing district but, with the recent discovery of a cluster of porphyry copper gold deposits, it also has high potential to become a major copper-gold camp. Mindoro has multiple gold and copper-gold targets in the District at varying stages of drill evaluation.

The Surigao Region is now emerging as a major nickel producing district, and there are at least eight nickel laterite deposits either in production or being developed. These include the SR Metals Mine, immediately adjacent to Mindoro's Agata nickel laterite project. At Agata, significant drill results have previously been reported by Mindoro (see releases on Mindoro website).

Much of the Surigao District nickel laterite production has been as direct shipping ore (DSO) to processing plants in Japan, Australia and China. However, a new generation of High Pressure Acid Leach (HPAL) plants, currently being used with great success by Sumitomo on its Philippine Coral Bay operation, shows considerable promise for the local processing of Surigao ores. In fact, Sumitomo recently announced plans to proceed with permitting to construct an HPAL plant in the Surigao District. This HPAL technology has a proven track record, in contrast to HPAL operations previously attempted in Australia. Construction of local processing plants, rather than simply shipping out raw product, would greatly increase the returns to all stakeholders; including Mindoro, its Philippine partner, the local people, local government units, and to the Philippines itself. Mindoro considers a tonnage threshold of 50 million WMT (wet metric tonnes) to be of potential interest for this scenario.

As noted in a February 7, 2008 news release, there is abundant evidence of the beginning of a trend for local/on-site processing of Philippine laterite ores and the growth of a large high-value industry in the Philippines. We expect that the prolifically nickel laterite-mineralized Surigao District will be an important part of this evolution.

RESULTS OF REGIONAL EVALUATION OF MINDORO TENEMENTS

Reconnaissance geological mapping was recently carried out over Mindoro's Surigao tenements with the objective of defining areas of potential nickel laterite mineralization. These tenements are on the continuation of the geological trend north from the nickel laterite mineralization in the SR Metals tenement, and from the Agata project where resource delineation drilling programs are in progress in two areas. Results from Agata have been reported in a number of news releases in the past two years (see Mindoro website). At Agata North alone (see accompanying map), an Exploration Target of 50 to 60 million wet metric tonnes (WMT) (see news release dated June 20, 2007) in a grade range of 0.9 percent to 1.1 percent nickel and from 28 to 32 percent iron has been defined. As a result of drill results to date, and production grades achieved from the immediately adjacent SR Metals Mine, the upper grade range is herein increased to 1.5 percent nickel (from 1.1 percent nickel) and 46 percent iron (from 32 percent iron).

Nickel laterite in the Surigao District is manifested by the development of thick, purple-coloured clayey soils over favorable ultra-mafic rocks. Geological mapping by Mindoro has outlined lateritic soils on ultra-mafic rocks over extensive areas on these projects, as shown in the accompanying map. Areas of lateritic soils were defined on the Tapian Main (approximately 1,304 hectares), Tapian SF (163 hectares) and Mat-I (220 hectares) projects, aggregating more than 1,650 hectares. This compares with a total of 600 hectares of laterite outlined on the Agata project.

Based on the mapping alone, there is no guarantee that nickel grades and thickness will be of commercial interest. Accordingly, a program of reconnaissance auger drilling is commencing in the near future to give a preliminary indication of nickel content and laterite thickness. This will be followed by detailed NI 43-101 compliant resource delineation drilling programs, as is ongoing at Agata.

At Agata, Mindoro is continuing to fast-track the DSO scenario with the objective of achieving production in 2008. A detailed update on both the Agata North and Agata South projects will be provided shortly.

ABOUT THE AGATA NICKEL LATERITE PROJECT

The nickel laterite prospect is situated on the Agata project, Surigao Gold District, northern Mindanao, Philippines. There are eight nickel laterite mines already in production, or advancing to production in the Surigao District, providing DSO to markets and processing plants in China, Japan, Korea and Australia. The geological extension of the Agata nickel laterite mineralization into an adjacent property, two kilometers south of Agata, is in production and product is being shipped to markets in China (see website for map).

As reported on March 13, 2007, the current objective on the Agata North project is to define a NI 43-101 compliant resource adequate, initially, for three to five years of production at a rate of 500,000 to 700,000 wet metric tonnes per annum of direct shipping-grade material for the ferro-nickel markets of China, India and Korea. Mindoro has a target production date of the first half of 2008, and would ramp up production to one million tonnes or more per year thereafter depending on market demand. The initial drill program covers less than 15 percent of the area of nickel laterite mineralization mapped to date at Agata. On June 20, 2007, Mindoro released a revised global Exploration Target for Agata North as follows:

- Combined ferruginous overburden, limonite and saprolite horizons: 50 to 60 million wet metric tonnes (WMT) at a grade of 0.9 to 1.5(i) percent nickel and 28 to 46(i) percent iron.

(i) herein revised upwards from 1.1 percent nickel and 32 percent iron

The reader is cautioned that the nickel laterite mineralization at the Agata North and South projects are currently exploration targets only. The potential quantity and grade of the exploration target described above is conceptual in nature. There has been insufficient exploration to define mineral resources and it is uncertain if further exploration will result in the targets being delineated as mineral resources or that these resources, if delineated, will be economic or sufficient to support a commercial mining operation. Until a feasibility study has been completed there is no certainty that the company's projections will be economically viable.

This Exploration Target will form the basis for evaluating several attractive value-added local processing options, as noted above. In the meantime, Mindoro will continue to fast-track the DSO scenario with the objective of achieving production in 2008.

The Agata North nickel laterite mineralization covers approximately 340 hectares. A total of 143 drill holes have been completed to date within this area. Average thicknesses and grades encountered and a specific gravity of 1.20 and 1.50 grams per cubic centimeter were used for the limonite and saprolite ore respectively to arrive at the above Exploration Target. The Exploration Target does not include significant thicknesses of low-grade, partially lateritized saprolitic rock, grading in the 0.6 to 0.8 percent nickel range, that also has market potential. Nor does it include additional areas of nickel laterite mineralization on the Agata South project, where Mindoro is in a joint venture with a Philippine mining contractor (Delta Earthmoving).

Mineralization grades and thicknesses encountered to date meet and exceed company expectations and are in line with requirements for DSO ferro-nickel feedstock, demand for which remains strong, especially for material grading in excess of 1.2 percent nickel, which Mindoro anticipates will comprise the bulk of its material. Philippine nickel laterite ores generally have lower moisture, sulfur and phosphorous content than its competitors in New Caledonia and Indonesia.

In particular, Agata has strong competitive advantages, with good grades, just two to three kilometers from tide water, with corresponding low haul distance and costs, and only two days shipping from China. Uniquely, DSO nickel laterite operations have a low-capital cost and offer a rapid route to production and cash-flow.

However, it is management's strong conviction that the real future for the Agata project is for enhanced value, local processing. Mindoro management believes that it has excellent potential to outline sufficient resources to support this concept. Several attractive alternatives are emerging, which include: at the low technology end of the spectrum, constructing a blast or electric furnace for nickel pig iron production (low grade ferro-nickel product which is increasingly entrenching itself as a substitute for refined nickel in stainless steel production), atmospheric leaching for which pilot testing on another Philippine laterite has produced promising results, and a new generation of High Pressure Acid Leach (HPAL) plants. The new generation HPAL plants are being used by Sumitomo on its Philippine Coral Bay operation. This HPAL technology has much lower capital costs and is far more efficient than HPAL operations previously attempted in Australia. Sumitomo recently announced a doubling of capacity at Coral Bay, and plans to construct a new HPAL plant in the Surigao District.

Programs are carried out under the supervision of Tony Climie, P.Geol. president of Mindoro, who is a qualified person as defined by National Instrument 43-101. Sample preparation and assaying is being performed by McPhar Laboratory of Manila, an ISO 9001/2000 accredited laboratory. Ni, Co, Fe, MgO and Al2O3 assays are performed by AAS after an HCl-HNO3-HClO4 digest, and SiO2 by gravimetric method. Normal Quality Control and Quality Assurance procedures are being carried out, using a system of duplicate, standard and blank samples.

ABOUT MINDORO

Mindoro is a Tier 1 Issuer trading on the TSX Venture Exchange (MIO) and the Frankfurt Stock Exchange (WKN 906167). In addition to advancing the Agata nickel laterite project towards production, Mindoro has announced an initial 43-101 compliant gold-silver mineral resource estimate on its Kay Tanda gold-silver project, and is proceeding to advance this project. The company has also identified 22 porphyry copper-gold prospects in the Philippines and has an aggressive strategy of drilling multiple targets in 2008.

This release may contain forward-looking statements including management's assessments of future plans and operations, and expectations of future production. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks include, but are not limited to, the risks associated with the mining and exploration industry (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production). The assumptions used in the preparation of such statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.

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

Contact Information

  • Mindoro Resources Ltd.
    Penny Gould
    Executive Vice President
    (780) 413-8187
    Email: penny@mindoro.com
    Website: www.mindoro.com
    or
    Ascenta Capital Partners Inc.
    Trent Dahl
    Investor Relations-Canada
    (604) 628-5800 or Toll Free: 1-866-684-4209 ext. 228
    Email: info@mindoro.com
    or
    Argentuminvest GmbH
    Richard Mayr
    Investor Relations-Europe
    +49.9421.785250
    +49.9421.785255 (FAX)
    Email: info@argentuminvest.com