Mindoro Resources Ltd.
TSX VENTURE : MIO
FRANKFURT : OLM

Mindoro Resources Ltd.

March 25, 2008 09:00 ET

Mindoro Resources Ltd.: Update on Mindoro's Nickel Laterite Projects

EDMONTON, ALBERTA--(Marketwire - March 25, 2008) - Mindoro Resources Ltd. (TSX VENTURE:MIO)(FRANKFURT: WKN 906167) is pleased to provide an update on its nickel laterite projects. On the Agata North project, a Phase 2 drilling program is underway and 17 drill holes have been completed. The NI 43-101 resource report is nearing completion, and mine planning and permitting are well advanced. The annual production target for the Direct Shipping Ore (DSO) scenario has been revised upwards to one million wet metric tonnes per year. On the Agata South - Delta joint venture project, 186 drill holes have been completed to date. While initial plans are for DSO operations on both projects, due to the large tonnage potential of Mindoro's tenements, and evolution of attractive processing technologies applicable to Philippine ores, the company is actively evaluating enhanced-value, on-site processing alternatives. To this end, mini-bulk samples have been collected for pilot high-pressure acid-leach (HPAL) testing.

AGATA NORTH PROJECT

The independent engineering consultant's resource estimate for the initial starter DSO resource has been received and preparation of the National Instrument 43-101 report is nearing completion. Scoping studies have commenced. The 43-101 report will cover the area drilled to date in the Phase 1 drill program (134 drill holes), constituting about 15 percent of the interpreted nickel laterite mineralization at Agata North. This will be the resource basis for the initial DSO operation and will enable the related economic evaluation to be released. To establish the "global" resource for Agata North, a Phase 2 drill program is in progress and 17 drill holes have been completed to date. Assay results will be reported on a per-cross-section basis as received.

Mindoro is continuing to fast-track the DSO scenario for Agata North with the objective of achieving production in 2008, subject to receipt of all relevant permits. The bench level plans are in preparation for the detailed mine planning design and grade control blending purposes. Construction of the on-site accommodation for mine construction crews is now 60 percent complete. Mining fleet equipment inspection has been carried out, tender specifications have been competed, and bids will be called once relevant permits have been received. Permitting work is well advanced, and one of the key permits, the Environmental Compliance Certificate (ECC) has passed through initial approval stages and is now waiting final approval from the Secretary of the Department of Environment and Natural Resources (DENR).

As reported on March 13, 2007, the current objective on the Agata North project is to define a NI 43-101 compliant resource, initially adequate for three to five years of production at a rate of 500,000 to 700,000 wet metric tonnes (WMT) per annum of DSO material for the ferro-nickel markets of China, India and Korea. On the basis of strong buyer interest in the Agata material and ongoing results, this production target is herein revised to one million WMT per year.

The reader is cautioned that the nickel laterite mineralization at both the Agata North and South projects are currently exploration targets only. The company has not yet established mineral resources or mineral reserves that would support a commercial mining operation. There is no guarantee that future exploration will result in the discovery of 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.

AGATA SOUTH PROJECT - DELTA JOINT VENTURE

On August 23, 2007, Mindoro announced it had reached agreement with Delta Earthmoving Inc., an experienced nickel laterite mining contractor, to explore, and advance to production if warranted, the Agata South nickel laterite project. The agreement does not cover Agata North. A total of 186 drill holes and 2,248 meters have been drilled, covering 50 hectares, near the southern boundary. Assays have not yet been reported by Delta. Drilling is now transferring one to two kilometres north, within the Agata South area.

Mine planning for an initial DSO operation, to commence in conjunction with the Agata North Project is advancing. This gives Mindoro the opportunity to advance another nickel laterite prospect to production at no risk or cost and the potential to share in additional significant cash flow.

EXPANDED GLOBAL RESOURCE EVALUATION ON SURIGAO TENEMENTS

On February 26, 2008, Mindoro advised that reconnaissance geological mapping of its Surigao District tenements, north of its Agata Project, had 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 the potential for a further 1,650 hectares of nickel laterite mineralization on the adjacent Tapian Main, Tapian SF and Mat-I tenements, further reinforcing Mindoro's plans to evaluate the feasibility of establishing a local processing plant to maximize economic returns to all stakeholders (see map accompanying February 26, 2008, news release).

To rapidly assess the potential of this large area, a hand-auger reconnaissance sampling system has been developed to define laterite containing significant nickel values. Holes will be on wide-spacing, at 200 to 400 meter centers, and to relatively shallow depths of several meters (mostly within the upper limonite horizon). If significant nickel values are encountered, detailed resource drilling will follow using mechanical drill rigs. A suitable auger system has been developed and work has commenced. To date eleven holes have been competed.

ENHANCED VALUE, ON-SITE PROCESSING ALTERNATIVES - PILOT SAMPLE COLLECTION

Mindoro is actively evaluating enhanced-value, local processing alternatives for the Agata Project and its other Surigao tenements (see section in "About the Agata Nickel Laterite Project" below). One of these promising technologies is for 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, where it recently announced a doubling of capacity at Coral Bay, as well as plans to construct a new HPAL plant in the Surigao District.

A 125 kilogram mini-bulk sample of limonite material (low nickel and high iron) grading 1.0-1.2% nickel and greater then 40% iron, and a 20 kilogram sample of saprolite material (high nickel and low iron) grading 1.50% nickel and under 20% iron have been collected for pilot high-pressure acid-leach (HPAL) testing. The samples will be sent to the pilot plant laboratory early next week.

ABOUT THE AGATA NICKEL LATERITE PROJECT

Direct Shipping Ore (DSO) Scenario

The Agata nickel laterite prospect is situated on the Agata Project, Surigao Gold District, northern Mindanao, Philippines. There are several nickel laterite mines already in 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 map accompanying the February 7, 2008, news release).

Mineralization grades and thicknesses encountered to date meet and exceed Mindoro's initial 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.

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 one million WMT 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, subject to receiving all necessary permits.

Enhanced Value, On-Site Processing Alternatives

It is management's strong conviction that the real future for the Agata Project, and Mindoro's other Surigao tenements, is for the establishment of an enhanced value, on-site processing plant, and that there is excellent potential to outline sufficient resources to support this concept. Several attractive processing 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); heap 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.

Mindoro sees abundant evidence that the Philippines is at 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.

To justify construction of an on-site processing plant, an adequate tonnage of material needs to be defined. Mindoro considers a threshold tonnage in the order of 50 million tonnes to be of potential interest. The Agata North nickel laterite mineralization covers approximately 340 hectares. A total of 151 drill holes have been completed to date within this area. The initial drill program covers less than 15 percent of the area of nickel laterite mineralization mapped to date at Agata North. On February 26, 2008, 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 percent nickel and 28 to 32 percent iron.

The reader is cautioned that the potential quantity and grade of the Exploration Target described is conceptual in nature, that there has been insufficient exploration to define a mineral resource and that it is uncertain if further exploration will result in the target being delineated as a mineral resource. 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. 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), nor does it include potential nickel laterite mineralization on other Mindoro tenements 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