Orocan Resource Corp.
TSX VENTURE : OR

Orocan Resource Corp.

March 03, 2011 19:18 ET

Orocan Enters Letter of Intent to Purchase All of the Shares of ARNEVUT Resources Inc.

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 3, 2011) - Orocan Resource Corp. ("Orocan" or the "Company") (TSX VENTURE:OR) is pleased to announce that it has entered into a non-binding letter of intent (the "LOI") with Arnevut Resources Inc. ("ARNEVUT"), a private Colorado corporation under which the parties have agreed to negotiate a definitive agreement pursuant to which the Company would acquire all of the outstanding shares of ARNEVUT in exchange for 14,700,000 common shares of Orocan (the "Transaction"). The primary asset of ARNEVUT is its option to acquire up to a 75% interest in the Island Mountain Gold Property, in Elko County in the Jerritt Canyon Trend of northeast Nevada. The Island Mountain Property hosts a NI 43-101 compliant measured and indicated resource of approximately 472,000 oz/Au and an inferred resource of approximately 269,000 oz/Au at 0.20 g/t Au cut-off.

The final details of the Transaction remain to be negotiated, including its legal structure, but it is expected to take the form of an amalgamation, arrangement, share purchase, or similar form of business combination. The parties have given mutual exclusivity covenants while negotiations and due diligence are completed (until the later of 45 days after the date that ARNEVUT delivers or otherwise makes available to Orocan its property data and 5 business days after Orocan receives a copy of the audited financial statements of ARNEVUT for each of its last 3 financial years).

Completion of the Transaction is subject to several conditions, including the execution of a definitive binding agreement, satisfactory due diligence investigations, receipt of all necessary shareholder, respective Board approvals regulatory and court approvals, including approval of the TSX Venture Exchange and the closing of a private placement financing of Orocan of a minimum of $3,000,000 and up to $4,000,000. 

About ARNEVUT Resources

Arnevut Resources is a private Colorado exploration company which holds the option to acquire up to a 75% interest in the Island Mountain Gold Property in northern Elko County, Nevada from Gateway Gold (USA) Corp. (a wholly-owned subsidiary of Victoria Gold Corp.). The Island Mountain property is located within the prolific Jerritt Canyon Trend of Northern Nevada and ARNEVUT has reported a NI 43-101 compliant resource of 741,000 oz/Au as set out in the table below.

Table 1- Island Mountain Resource Estimate – 0.2 g/t Au cut-off
Category Tonnes Average Grade
 g/t Au
Contained Gold
(oz)
Measured 2,113,978 3.71 252,376
Indicated 1,927,699 3.55 219,985
M & I 4,041,677 3.63 472,361
Inferred 2,456,899 3.40 269,068
Table 2- Island Mountain Resource Estimate – 0.4 g/t Au cut-off
Category Tonnes Average Grade
g/t Au
Contained Gold
(oz)
Measured 1,751,299 4.42 249,059
Indicated 1,679,328 4.03 217,628
M & I 3,430,627 4.23 466,687
Inferred 2,075,875 3.97 265,515

The National Instrument 43-101 compliant technical report on the Island Mountain Gold Property referred to in this news release is authored by Allan P. Juhas, Ph.D., CPG and Lee Rice, P.E., of Data Technology Services, Lakewood Colorado, who is an "Independent Qualified Person" as defined in the Instrument. Mr. Juhas and Mr. Lee have reviewed and approved the contents of this news release as applicable. The NI43-101, dated August 11, 2010 can be viewed at www.orocanresources.com.

Qualified Person

Mr. Alan Hitchborn, P.Geo., who is the Company's Qualified Person as defined by National Instrument 43-101, has reviewed and approved the contents of this news release as applicable.

ON BEHALF OF THE BOARD 

Chris Bogart, President & CEO

Cautionary Statement:

The foregoing information may contain forward-looking statements relating to the future performance of Orocan Resource Corp. Forward-looking statements, specifically those concerned with future performance are subject to certain risks and uncertainties, and actual results may differ materially. The LOI described above is non-binding and may not lead to a formal binding agreement or the completion of the acquisition for various reasons, including that the conditions outlined above may not be satisfied. Resource estimates are subject to risks and uncertainties and presume continuity of metal grades, which may not be present. These risks and uncertainties are detailed from time to time in Orocan Resource Corp.'s filings with the appropriate securities commissions.

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.

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