Nevoro Inc.
TSX : NVR

Nevoro Inc.

April 17, 2008 14:43 ET

Nevoro to Acquire Aurora Metals (BVI) Limited and its Stillwater PGE-Nickel-Copper-Cobalt-Chromite Project

TORONTO, ONTARIO--(Marketwire - April 17, 2008) - Nevoro Inc. ("Nevoro") (TSX:NVR) announced today that Nevoro and Aurora Metals (BVI) Limited ("Aurora") (OTCBB:AURMF.OB) have entered into an arrangement agreement (the "Arrangement Agreement") pursuant to which Nevoro will acquire 100% of the common shares of Aurora through a court-approved plan of arrangement (the "Arrangement"). Certain shareholders, the owners of approximately 51.3% of the outstanding common shares of Aurora, have entered into voting agreements with Nevoro, pursuant to which they have agreed to, among other things, vote their common shares in favour of the Arrangement.

Highlights

- Aurora's Stillwater Project consists of 221 claims totaling 4,578 acres (1,853 hectares) in North America's largest platinum group element ("PGE") mineral district, adjacent to the Stillwater palladium-platinum mine. (See "Location Map").

- The Stillwater Project has early-to advanced-stage Ni, Cu, Co, PGE and chromite exploration targets and historic resources (see "Stillwater Project" and "Historic Technical Information" below).

- There is potential to upgrade existing mineralization and complete a current NI 43-101 resource estimate within reasonable time frames.

- The Stillwater Complex has the largest identified chromite deposit in the Western Hemisphere, according to the United States Geological Survey Open File Report 2001-381, entitled Chromium, by Papp and Lipin, 2001.

Terms of the Acquisition

The acquisition will be completed by way of a court-approved plan of arrangement whereby each Aurora common share will be cancelled and the holders thereof will receive for each share one Nevoro common share, which represents a value of approximately C$0.495 per share based upon the closing price of Nevoro common shares on the Toronto Stock Exchange on April 16, 2008. There are currently 75,163,584 Nevoro common shares outstanding and 19,981,476 Aurora common shares outstanding. Upon the completion of the proposed Arrangement current Nevoro shareholders would own approximately 79% of Nevoro and current Aurora shareholders would own approximately 21% of Nevoro.

The completion of the Arrangement is subject to a number of conditions precedent, including that Aurora continue from the jurisdiction of the British Virgin Islands into the Province of British Columbia in order for the arrangement to be completed under British Columbia law. The arrangement is subject to additional customary conditions precedent, including that the parties shall have complied with all covenants and obligations under the Arrangement Agreement and that the Arrangement is approved by at least 2/3 of the Aurora shareholders attending, in person or by proxy, the shareholders meeting. Aurora shareholders holding 51.3% of the issued and outstanding shares have agreed to support the transaction. The Arrangement is also subject to approval of the Toronto Stock Exchange. The transaction is expected to close on or before July 31, 2008.

In addition to the Arrangement Agreement, Nevoro and Aurora have executed a grid note (the "Note") under which Aurora can receive advances up to C$500,000, in the aggregate, from Nevoro. The advances will be secured by a mortgage of Aurora's interest in the Stillwater Project and are subject to an interest rate equal to the Prime Rate, as quoted by the Royal Bank of Canada, plus 2% per annum. The Note can be called on 90 days notice, but in any event, no later than January 1, 2009, by Nevoro and can be satisfied, at Nevoro's option, in part or in full by the issuance of common shares of Aurora, the value of each common share issued shall be the lesser of (i) C$0.03 and (ii) 75% of the previous 20-day volume weighed average trading price of the common shares of Aurora at such time.

Commenting on the proposed transaction, William Schara, President and CEO of Nevoro said, "The supply and demand fundamentals for platinum, palladium and chromite are strong and have led to record prices. Furthermore, current power supply problems in South Africa could add to this situation. The Stillwater Project is an advanced exploration project with lower political risks compared to those in South Africa."

Stillwater Project

Currently, Aurora controls 4,578 acres (1,853 hectares) of patented and unpatented claims immediately adjacent to the Stillwater mine, operated by the Stillwater Mining Company, a PGE mine located in south-central Montana, USA. The Stillwater mine is currently the world's highest-grade and third largest PGE producing operation. Aurora's claims have previously been successfully explored for Ni-Cu+/-Co and chromite deposits, and they host many PGE indications or occurrences, but they have never been systematically explored for PGE.

The Stillwater Project is underlain by the Stillwater Complex, an Archean layered mafic-ultramafic magmatic intrusive body of unknown total size, exposed over an area of only 47 by 8 km and tilted on edge, but otherwise very similar to the Bushveld Complex of South Africa. The Stillwater Complex, like the Bushveld Complex, contains significant deposits of layered (stratiform) PGE, Ni-Cu-Co and Cr hosted in a series of distinct lithologic sequences. In the Stillwater Complex, Aurora's claims cover major strategic parts of the two lower mineralized lithologic sequences beneath the host sequence for the Stillwater Mine in the intensely mineralized eastern end of the Stillwater Complex.

To view the Location Map, please visit the following link: http://media3.marketwire.com/docs/NVRMAP.pdf

PGE in the Ultramafic Series - Aurora's claims cover portions of 17 km of strike in the Ultramafic Series and Basal Series rocks underneath the Lower Banded Series, which is host to the J-M Reef and the Stillwater mine. According to Stillwater Mining Company's ("Stillwater Mining") 2007 year-end results news release, the Stillwater mine produced 537,500 ounces of PGE at an average head grade of 0.52 oz./ton (17.8 g/t) from the J-M Reef in 2007. This reef, with a 40 km strike length, is considered to be an analog of the lower-grade, Merensky Reef in the Bushveld Complex. The news release stated that reserves for the J-M Reef were 40 million tons containing approximately 21.2 million ounces of Pd and Pt at the end of 2007.

The Ultramafic Series beneath J-M Reef horizon is a chromitite-bearing unit analogous to the host sequence for the UG2 Reef in the Bushveld Complex. An increasingly significant portion of PGE production from the Bushveld Complex now comes from the UG2 Reef, which underlies the historically better-known Merensky Reef. The UG2 Reef is about 0.6 m thick and contains 8 to 9 g/t PGE. In the Stillwater Complex, the Ultramafic Series beneath the well-known productive J-M Reef horizon contains 13 laterally extensive chromitite seams, of which the two lowermost seams, the "A" and "B" chromitites, comprise promising PGE target horizons markedly similar to the UG2 Reef of the Bushveld Complex.

The PGE-bearing "A" and "B" chromitite seams on Aurora's properties have been sampled only sporadically by trenching and limited drilling. The seams vary from less than 1 m up to 3m or more in thickness, with the widths and grades apparently increasing gradually down-dip into an as-yet untested primary magmatic basin developed during emplacement of the Stillwater Complex. In the Stillwater Complex, as in the Bushveld Complex, PGE grades typically increase as the mineralized seams (reefs) thicken into troughs or basins thought to be products of magmatic thickening caused by structural subsidence in the floor of the magma chamber.

In the Crescent Creek area, approximately 10 km west of the Stillwater River, Aurora's claims cover 3.7 km of strike along the "A" and "B" chromitite seams. Limited surface channel sampling conducted by Anaconda Company ("Anaconda") in 1979 indicates the presence of anomalous PGEs over narrow widths in these two seams. Some of the better samples include:



True Pt Pd Pt+Pd
Width (m) (g/t) (g/t) (g/t) Comments
--------------------------------------------------------------------------
0.92 0.94 1.80 2.74 Lower or middle part of A Chromitite
0.58 0.52 2.02 2.54 Upper (?) part of the A Chromitite
0.64 0.63 3.44 4.06 Upper part of "A" Chromitite
0.58 1.22 3.14 4.36 Lower part of "A" Chromitite
0.79 1.05 5.91 6.96 Lower and footwall parts of the "B"
Chromitite
0.24 1.12 5.71 6.83 Lower part of the "B" Chromitite
0.37 1.84 4.75 6.59 Lower part of the "B" Chromitite
0.64 1.03 2.81 3.84 Upper part of the "B" Chromitite
0.85 2.30 5.26 7.56 Lower part of the "B" Chromitite
0.40 1.36 4.51 5.87 Upper part of the "B" Chromitite
1.10 3.60 5.43 9.03 Lower part of the "B" Chromitite
1.83 0.80 1.97 2.77 "B" Chromitite
0.76 2.55 2.55 5.10 Basal part of "B" Chromitite
--------------------------------------------------------------------------


Historical drilling at Crescent Creek by Anaconda, in the late 1980s, and by Chrome Corporation of America in the late 1990s totals about 20 shallow (less than 150 m depth) small-diameter core holes. All of these historical holes reportedly intersected anomalous PGE over narrow widths (generally 1 m or less). A listing of the historical information regarding this drilling will be available on Nevoro's website (www.nevoro.com). The four best holes are as follows:



True Width Pt Pd Rh Total
Drill Hole (m) (g/t) (g/t) (g/t) PGE (g/t)
----------------------------------------------------------------
CC-79-4 0.30 12.50 14.20 0.00 26.70
CC-79-6A 1.50 1.40 2.98 0.00 4.38
WF-87-4 1.80 1.75 3.48 0.48 4.71
WF-87-2 0.55 1.29 3.33 0.29 4.91
and 0.10 5.50 4.30 1.50 11.30
----------------------------------------------------------------


Three of the historical Crescent Creek holes were drilled on a single section to examine the "B" Chromitite seam at increasing depth. The results indicate a progressive thickening of the seam down-dip over a 65 m interval accompanied by a systematic increase in Pt, Pd, and Rh values. This may represent thickening into a primary magmatic basin, similar to that observed in the Bushveld Complex where thickened stratigraphy is often associated with increased grades and widths of PGE mineralization. The rhodium (Rh) values in the Crescent Creek area are particularly interesting, with an average Pt:Pd:Rh ratio of approximately 4:10:1, generally similar to the 4:7:1 ratio in the UG2 Reef in the Bushveld Complex. The high rhodium content is especially encouraging considering this rare element is currently valued in the $8,500 to $9,500 per ounce range.

In the Mouat Mine area, approximately 2 km west of the Stillwater River, the PGE-bearing "A" and "B" chromitite seams crop out sporadically along 2.5 km of strike. These two seams in this area are potentially important PGE exploration targets, but they have not been adequately tested by surface sampling or drilling. Locally, the "B" chromitite seam in this area exceeds 2.3 m in width. Several trench samples collected along a 360 m long outcrop exposure of the "B" seam average 2.49 g/t PGE, with one very narrow interval (0.12 m) containing 2.8 g/t Pt, 6.4 g/t Pd, 0.9 g/t Rh and 0.6 g/t Ru. Only one hole (drilled in 1988) has ever been drilled in this area to test the "B" seam at depth, but this hole failed to intersect the seam due to unexpected fault complications.

In the Nye Basin area, immediately east of the Stillwater River, the PGE-bearing "A" and "B" chromitite seams extend for at least another 4 km along strike. This area has been scarcely tested for PGE. In 1985, Anaconda drilled five shallow, small-diameter core holes in the "A" and "B" chromitite zones to satisfy annual claim assessment requirements, but none of these holes was assayed for PGE and the cores were subsequently misplaced.

Ni-Cu-Co+/-PGE in the Basal Series - Aurora's claims also include more than 12 total km of strike of the Basal Series, which underlies the Ultramafic Series. In the 1960s and 1970s, Anaconda explored this sequence in the Mouat Mine area, 2 km west of the Stillwater River, with a grid of 127 closely spaced core holes, totaling more than 33,000 m, and 500 m of underground development.

This work defined a published historical resource estimate (1987) of 92 million tons grading 0.27% Ni and 0.29% Cu, using a 0.2% Ni cutoff, or 23 million tons grading 0.62% Ni and 0.45% Cu, using a 0.4% Ni cutoff. These are historical resource estimates only and not current resources as defined by NI 43-101 (see "Cautionary Statement" below). Nickel and copper prices at the time were both less than $1.00 per pound. No systematic sampling was done for PGE.

Anaconda also tested continuity of Ni-Cu mineralization in the Basal Series east of the Stillwater River along 5 km of strike in the Nye Basin-Benbow areas. They drilled a series of 32 widely spaced drill holes (6,450 m), of which 25 successfully intersected the correct magmatic stratigraphy. All 25 of these historical holes were mineralized, collectively averaging 0.6% Ni, 0.5% Cu and 0.06% Co over drill widths of 2 to 30 m, with individual holes ranging from 0.3% to 1.0% Ni, 0.2% to 1.0 % Cu, and 0.04% to 0.09% Co. A listing of the historical information regarding this drilling will be available on Nevoro's website (www.nevoro.com). Eleven of the historical holes - principally those located close to transverse faults which cut across the stratigraphy - intersected multiple stratiform mineralized zones. Six of the better historical drill intercepts include:



Drill Hole Interval (m) True Thickness (m) Ni (%) Cu (%) Co (%)
--------------------------------------------------------------------------
NB-19 234.4 - 246.0 11.6 0.58 0.36 0.04
NB-13 84.1 - 98.7 14.6 0.70 0.49 NA
NB-20 85.3 - 98.4 13.1 0.74 0.49 NA
NB-17 30.5 - 37.5 7.0 0.71 1.02 0.05
NB-17A 227.5 - 234.2 6.7 0.80 0.57 0.08
NB-10 87.2 - 110.7 23.5 0.44 0.65 NA
--------------------------------------------------------------------------


Historical estimates of mineralization published by the United States Geological Survey (1987) for the Nye Basin area are in the range of 70 to 90 million tons grading 0.6 to 0.8% Ni and 0.6 to 0.8% Cu, and for the Benbow mine area are 10 to 20 million tons at 0.4 to 0.5% Ni and 0.5 to 0.6% Cu. These are conceptual exploration targets and not resources (see "Cautionary Statement" below).

The core from these Ni-Cu+/-Co zones was subsequently consumed in metallurgical testing and never assayed for PGE. However, Anaconda did electron-probe microanalysis of a single sulfide concentrate sample from hole # NB-17A in their Tucson laboratory on a few grains each of pyrrhotite (iron sulfide), chalcopyrite (iron-copper sulfide), and cobaltiferous pentlandite (iron-nickel-cobalt sulfide). The actual concentration factor is unknown, but because the sample was reportedly taken from massive to semi-massive sulfide interval containing 50% or more sulfide minerals, the sulfide concentrate was presumably about 2 times. The average PGE tenor of the three sulfide phases in the concentrate are as follows:



- pyrrhotite (6 grains probed): 1.60 oz/t Pt, 1.36 oz/t Pd
- chalcopyrite (3 grains probed): 2.62 oz/t Pt, 1.07 oz/t Pd
- cobaltiferous pentlandite (2 grains probed): 3.21 oz/t Pt, 2.62 oz/t Pd


These results provide encouraging evidence of possible PGE enrichment and suggest that the Ni-Cu+/-Co zones in the Nye Basin--Benbow areas should be systematically explored for PGE.

(Cautionary Statement: The technical information presented above, including resource estimates, is historical. Nevoro has not done sufficient work to classify the historical estimates as current "mineral resources" or "mineral reserves" as defined in NI 43-101, nor is Nevoro treating the historical estimates as current mineral resources or mineral reserves. Nevoro has not verified the scientific and technical information disclosed, including sampling, analytical and test data underlying such information, because such scientific and technical information was not prepared by Nevoro. The historical estimates should not be relied upon. Nevoro considers that these historical estimates provide a conceptual indication of the potential quantity and grade of the mineral resources on the property. There has been insufficient exploration to define any mineral resource and it remains uncertain if further exploration will result in the target of such exploration being delineated as a current mineral resource.)

Chromite in the Ultramafic Series - Aurora's claims in the Ultramafic Series, beneath the Lower Banded Series which hosts the Stillwater Mine, include two major chromitite seams, "G" and "H", which contain four massive chromite deposits of possible commercial importance. Two of these deposits, Mountain View and Benbow, are sites of historic mines responsible for a significant portion of the United States' chrome supply during World War I and II and the Korean War. These two deposits plus two other drill-defined deposits, Benbow East and Nye Basin, contain substantial amounts of chromite consistently similar in grade and thickness to that historically produced.

Extensive studies, including drilling and underground exploration, done by Chrome Corporation of America and others in the decades since the Korean War demonstrate in-place historical resources of 14 million tons of 23% Cr2O3 at the Mountain View mine, 21 million tons of 22% Cr2O3 at the Benbow mine, 9 million tons of 20% Cr2O3 in the Benbow East deposit, and 6 million tons of 22% Cr2O3 in the Nye Basin deposit. In 1986--87, Chrome Corporation of America completed an exhaustive four-volume feasibility study of the Mountain View deposit as a prelude to opening a 132,000 ton/yr high-carbon ferrochrome operation, but the project was subsequently abandoned due to lack of funding. No work has been done since. Collectively, these four deposits represent the largest historical chromite resource presently known in North America. They have had only limited sampling for PGE.

(Cautionary Statement: The technical information presented above, including resource estimates, is historical. Nevoro has not done sufficient work to classify the historical estimates as current "mineral resources" or "mineral reserves" as defined in NI 43-101, nor is Nevoro treating the historical estimates as current mineral resources or mineral reserves. Nevoro has not verified the scientific and technical information disclosed, including sampling, analytical and test data underlying such information, because such scientific and technical information was not prepared by Nevoro. The historical estimates should not be relied upon. Nevoro considers that these historical estimates provide a conceptual indication of the potential quantity and grade of the mineral resources on the property. There has been insufficient exploration to define any mineral resource and it remains uncertain if further exploration will result in the target of such exploration being delineated as a current mineral resource).

Other Potential PGE Targets - Aurora's claims have other potential, but untested, PGE targets. These include the Volatile Enriched Zone ("VEZ"), at the very top of the Ultramafic Series, and scattered dunite bodies of unknown size, which cross-cut stratigraphy of the two lower lithologic sequences and may represent the feeders to PGE mineralization in the J-M Reef.

Historical Technical Information

Technical information contained herein, including resource calculations, is based on "historical estimates" as such term is defined in National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"). Nevoro is not treating the historical estimates as current mineral resources or mineral reserves and has not verified scientific and technical information disclosed, including sampling, analytical and test data underlying such information, because such scientific and technical information was not prepared by Nevoro. The historical estimates should not be relied upon. Nevoro considers that these historical estimates provide a conceptual indication of the potential quantity and grade of the mineral resources on the property. There has been insufficient exploration to define any current mineral resource and it remains uncertain if further exploration will result in the target of such exploration being delineated as a current mineral resource.

Aurora Agreements

In January and February of 2004, Aurora acquired its interest in the Stillwater Project by entering into two arms' length lease agreements covering patented and unpatented claims in the Stillwater Complex. The Mountain View Lease agreement covering 77 unpatented claims and one patented claim totaling 1,719 acres (695 hectares), has a primary term of ten years from the date of execution and is extendable for a further five years upon payment of Advance Royalties of US$50,000 to the lessors under the Mountain View Lease (the "Mountain View Lessors"). Aurora is responsible for payment of annual fees, to the U.S. Bureau of Land Management ("BLM"), for the unpatented claims and property ownership taxes on patented claims. A Net Smelter Return royalty ("NSR") of 2%, less milling, refining, smelting and transportation costs, will apply to all products from mining operations. Advance Royalties of US$500,000 are payable to the Mountain View Lessors at commencement of construction of a mine.

The Basal Zone Lease agreement covering 26 unpatented claims and 34 patented claims totaling 1,248 acres (505 hectares), has a primary term of ten years from the date of execution, extendable for a further five years. Aurora is responsible for payment of annual fees, to the BLM, for the unpatented claims and ownership taxes on patented claims. Aurora is responsible for paying the lessors under the Basal Zone Lease a monthly fee of US$500 on the first anniversary of the Agreement, US$1,000 per month on the second anniversary, US$1,500 per month on the third anniversary, and US$2,000 per month from the sixth anniversary and subsequently for the term of the Agreement. An NSR of 2%, less milling, refining, smelting and transportation costs, will apply to all products from mining operations.

PGE Markets

PGE prices have been increasing in the last few years, particularly since recent production from South Africa has seen disruptions. Mine accidents, weather problems, labour disruptions along with the now well-publicized power shortages and outages have impaired production in South Africa. According to Johnson Matthey, South Africa supplied 78% of the world's platinum and 34% of the world's palladium in 2007.

The qualified person under NI 43-101 responsible for reviewing all technical data reported in this news release is Mr. Mel Klohn, M.Sc., L.P. Geo., a director of Nevoro Inc.

About Nevoro Inc.

Nevoro is a TSX-listed exploration and development company focused on the discovery of precious and base metals in the western USA. In addition to the planned purchase of Aurora Mining (BVI) Limited and advancement of its Stillwater PGE-nickel-copper-cobalt-chromite project, Nevoro holds 13 projects in Nevada and Idaho, 11 of which are wholly owned or optioned and two are leased to third parties. Nevoro intends to advance the Stillwater Project, seek additional advanced stage opportunities and continue drilling programs at its St. Elmo, Dome Hill, Silver King and Cross projects in the spring.

CAUTIONARY STATEMENT: This press release contains certain forward-looking information, including future oriented financial information. This information relates to future events or future performance and reflects management's expectations and assumptions regarding the growth, results of operations, performance and business prospects and opportunities of Nevoro. Such forward-looking information reflects management's current beliefs and is based on information currently available to management of Nevoro. In some cases, forward-looking information can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue" or the negative of these terms or other similar expressions concerning matters that are not historical facts. Forward-looking information in this new release includes but is not limited to, completion of the arrangement, economic performance of Nevoro and of the combined company, statements regarding potential mineralization and reserve explorations and future plans and objectives of Nevoro, including exploration and development. Forward-looking information involves significant risks and uncertainties. A number of factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking information including risks related to investments, conditions of capital markets, economic conditions, dependence on key personnel, interest rates, regulatory change and availability of future financing. These factors should not be considered exhaustive.

In addition, in evaluating this information, investors should specifically consider various factors, including risk factors which may cause actual events or results to differ materially from any forward-looking statement. In formulating forward-looking information herein, management has assumed that business and economic conditions affecting Nevoro will continue substantially in the ordinary course, including without limitation with respect to general levels of economic activity, regulations, taxes, interest rates and that there will be no material changes. Although the forward-looking information is based on what management of Nevoro considers to be reasonable assumptions based on information currently available to it, there can be no assurance that actual events or results will be consistent with this forward-looking information, and management's assumptions may prove to be incorrect. This forward-looking information is made as of the date of this press release, and Nevoro does not assume any obligation, except as required by law, to update or revise them to reflect new events or circumstances. Undue reliance should not be placed on forward looking information.

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