Morumbi Oil and Gas Inc.
TSX VENTURE : MOC

Morumbi Oil and Gas Inc.

May 30, 2011 16:25 ET

Morumbi Enters Into Development Agreement on Prospective Mineral Lands on Bougainville, Papua New Guinea

CALGARY, ALBERTA--(Marketwire - May 30, 2011) -

  • Morumbi has been invited by Isina Resource Holdings Ltd. to be partner of choice

  • Morumbi to be first mover in geologically-resource rich Bougainville

  • Bougainville is one of the worlds best endowed gold and copper districts; largely unexplored since the 1960's discovery of Panguna

Morumbi Oil & Gas Inc. (TSX VENTURE:MOC) ("Morumbi" or the "Company") announces that Isina Mining & Development Ltd., ("IMD") a wholly owned subsidiary of Morumbi, has executed a letter of intent ("LOI") to become the Development Partner of choice for Isina Resource Holdings Limited ("Isina Holdings") on the mineral rich island of Bougainville, Papua New Guinea. Isina Holdings is a landowner company representing 15 villages over traditional lands (the "Isina Lands").

It is the first time in the history of Bougainville that an area, until recently aggressively opposed to mineral exploration, has formed its own development company and invited a foreign partner to jointly explore for and develop mineral resources located on their traditional lands. The Company's Chairman Stephen Shefsky and Chief Executive Officer Mark Brennan participated in the signing ceremony which took place at Tunania village on the Isina Lands on the east coast of Central Bougainville.

The current LOI covers approximately 5,000 hectares that extends from the East coast up over and beyond the Crown Prince Range. Bougainville, although long regarded as having great gold and copper potential based on early work done by German explorers, has a unique history with respect to Mining in that no exploration has been carried out since the 1960's.

Satellite imagery, together with the results of a German Government sponsored Aeromag and geochemical survey over Bougainville carried out by the Federal Institute of Geoscience and Natural Science Hannover and published in 1990, together with the 2007 discovery of extensive alluvial fields in the creeks and rivers of Isina that are now being worked by villagers, single out this area for high-priority exploration programs for gold/copper epithermal and porphyry deposits.

Under the terms of the LOI, IMD paid Kina $10,000 (approximately CDN$ 4,000) on execution and has agreed to pay a further Kina $3,000 (approximately CDN $1,200) per month to Isina Holdings to help it fund certain programs.

Bougainville Geological Setting

Bougainville is situated along an emerging gold-copper Neogene magmatic belt from Lihir to the Solomon Islands on the south west Pacific Rim of Fire. A number of economic gold and gold-copper deposits have been discovered on this belt including Lihir, Panguna, Simberi and Gold Ridge.

On Bougainville there has been no exploration activity since the 1960's on the island which is approximately 250 km long and an average 40 km wide with a North/South spine of ranges made up of nine volcanoes of which two (Mt. Balbi & Mt. Bagara) remain active. The island is one of the world's best endowed gold and copper districts; hosting the world class Panguna Mine with in excess of 40Moz gold equivalent metal surrounded by what is generally accepted as the world's most under explored prospective district for the discovery of additional large gold-copper deposits.

The Isina Lands lie twelve kilometers along the Crown Prince Range to the South of Panguna. Panguna was the world's first large scale gold-copper porphyry mine, which at its opening in 1974 treated a then unheard of 135,000 tons of ore daily. In 1978, one of the peak production years, Panguna produced 403 million lbs. of copper, 751,000 oz. of gold and 1.7 million oz. of silver which at today's prices would aggregate to total sales of $2.8 billion for the year.

At the time the Panguna mine was shut down by civil unrest in 1989 it was still producing in excess of 400,000 oz of gold per annum.

The Isina Lands, by virtue of the historical information on the area and their geological setting in proximity to Panguna, offer unique opportunities for the discovery of world-class high grade epithermal gold and porphyry gold-copper deposits.

Rockwell

The current LOI flows from the program that Morumbi acquired through the purchase of Rockwell Exploration S.A. Rockwell has had well established and ongoing relationships for over six years on Bougainville at the village and Governmental level. The current LOI over Isina Lands is a product of these strong relationships and is expected to be followed by other such arrangements on the Island.

Morumbi also announced that on May 30, 2011, in accordance with its stock option plan, the board of directors of Morumbi approved the grant of an aggregate of 2,100,000 incentive stock options to certain directors, officers and consultants of the Company. Of these options, 425,000 are exercisable on or before May 30, 2013 with the remainder being exercisable on or before May 30, 2016 each at an exercise price of $0.33 per share.

About Morumbi

Morumbi Oil & Gas Inc. is a public company with attractive near-term light oil exploitation opportunities in northwest Alberta, and, through its recent acquisition of Rockwell, it is actively undertaking programs to develop existing assets and conducting activities to acquire additional high impact Oil/Gas and Mineral assets. The Company trades on the TSX Venture Exchange under the symbol "MOC". For more information about Morumbi and the Company's McKinley Property and plans visit our website at www.morumbi.ca.

Disclaimer

Certain statements contained in this news release may contain forward-looking information within the meaning of Canadian securities laws. Such forward-looking information is identified by words such as "estimates", "intends", "expects", "believes", "may", "will" and include, without limitation, statements regarding the company's plan of business operations (including plans for developing assets) and projected expenditures. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others, commodity prices, risks inherent in the oil & gas industry, financing risks, labour risks, title disputes, regulatory risks, currency fluctuations, competition, unexpected decline rates in wells, changes in taxation or royalty regimes and environmental concerns. Most of these factors are outside the control of the company. Investors are cautioned not to put undue reliance on forward-looking information. Except as otherwise required by applicable securities statutes or regulation, the company expressly disclaims any intent or obligation to update publicly forward looking information, whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor 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.

Contact Information

  • Morumbi Oil & Gas Inc.
    Mark Brennan
    Chief Executive Officer
    416-364-2266
    1-(877) 954-6327
    mbrennan@morumbi.ca