Orocan Resource Corp.

Orocan Resource Corp.

November 07, 2011 06:00 ET

Orocan Signs LOI for Graphite Properties in Ontario

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 7, 2011) - Orocan Resource Corp. (the "Company) (TSX VENTURE:OR) is pleased to announce it has signed a Letter of Intent to acquire a 100% interest in three graphite properties in Ontario, Canada including the Black Donald and Little Bryan Properties.

Black Donald Property

Strategically surrounding the past producing Black Donald Graphite Mine (1896-1954), this very large property (~9000 ha) encompasses a substantial area of favourable marble +/- paragneiss geology and contains or adjoins numerous historical graphite occurrences. The Black Donald Graphite Mine was one of the largest and richest graphite deposits in North America and was extremely high grade with historic ore grades of up to 80% Cg. During the last 10 years of mine life the average reported grade was 25-30% Cg. Some 94% of the total value of Ontario graphite production came from the Black Donald Mine. The graphite was in both high quality flake and amorphous form.

A number of historical occurrences are recorded in various Ontario government reports on and the present property. One of these is indicated to extend across 4 lots (1.6 km) along the north side of Black Donald Lake directly across from the old mine on the present property. The graphite host rocks are described as "rusty schist". One major graphitic unit is described as being 6 m in thickness. Three samples taken by government geologists returned graphitic carbon values in the 2.3 to 4.5% Cg range. Two other historical graphite zones of interest are located along the Brougham/Blithfield line on the present property. Here, government geologists report a number of old trenches and pits with graphite reportedly in rusty gneiss and marble.

Little Bryan Property

This ~3000 ha. property located in central Lyndoch Township includes the historic Little-Bryan graphite prospect and a considerable amount of unexplored favourable paragneiss/marble geology to the north and west of the known occurrence.

The immediate area of the graphite prospect was last explored in 1989 by consulting firm Derry, Michener, Booth and Wahl (DMBW) on behalf of Harrington Sound Resources Inc in a comprehensive program including geological mapping and prospecting, trenching, channel sampling and ground geophysics. This work showed the Little-Bryan graphite mineralization to be hosted by pyritic gneisses. Graphite mineralization extends over ~1.3 km in a general east-west direction in surface outcrop on their line grid. DMBW noted that "… results from 11 grab samples… are very encouraging ranging from 0.63% Cg to 34.06% Cg with an average grade of…. 10.94% Cg". Ground electromagnetic surveying (VLF EM-16) showed a number of "conductive trends", some of which correlate with the known graphite mineralization.

Systematic channel sampling in trenches yielded the following results:

Trench 1: 3.79% Cg over 11m incl 5.15% Cg over 6 m

Trench 4: 3.72% Cg over 22 m

Trench 5: 4.74% Cg over 11 m

Trench 6: 4.93% Cg over 10 m

DMBW recommended some additional trenching and sampling work on the graphitic horizons as a prelude to a possible diamond drilling program. There is no indication that any of this work was ever carried out. Note that two holes had been previously drilled on the property in 1974 by James Bryan. The first hole was collared too far to the north of the target graphite horizon but did encounter minor graphite mineralization. Hole 2 was better sited near a historic trench and returned an average of 3.77% Cg over 4.18 m.

The Company has not had the chance to verify the accuracy of the historic sampling and trenching results reported in this news release and cautions readers not to rely upon them. The historic figures were generated from sources believed to be reliable, they have not been confirmed. Although the sampling and drilling results are relevant, they have not been verified.

Graphite Market

Global consumption of natural graphite has increased from ~600,000 t in 2000 to 1.1 MM t in 2010. Demand for graphite has been increasing by approximately 5% per year since 2000 due to the ongoing modernization of China, India and other emerging economies, resulting in strong demand from traditional end uses such as the steel and automotive industries. Graphite also has many important new applications such as lithium ion batteries, fuel cells and nuclear and solar power that have the potential to create significant incremental demand growth. There is roughly 10 times more graphite in a lithium ion battery than there is lithium. Demand for graphite is expected to rise as electric vehicles and lithium battery technology are adopted as well as increasing uses in new technology applications.

Natural graphite comes in several forms: flake, amorphous and lump. Of the one million tonnes of graphite produced annually, approximately 40% is of the most desirable flake type. China, which produces about 73% of the world's graphite, is seeing production and export growth leveling and export taxes and a licensing system have been instituted. A recent European Commission study regarding the criticality of 41 different materials to the European economy included graphite among the 14 materials high in both economic importance and supply risk (Critical Raw Materials for the EU, July 2010).


Orocan has the option to earn a 100% interest in the three Graphite Properties from Zimtu Capital Corp., Bill Brereton and Paul Sobie. (collectively the "Vendors") by making the following payments and issuing the following common shares to the Vendors: (i) $25,000 and 700,000 common shares on receipt of the TSX Venture ("TSXV") acceptance of the Definitive Option Agreement; (ii) 300,000 common shares 6 months from TSXV acceptance: (iii) 500,000 common shares 12 months from TSXV acceptance; and (iv.) 500,000 common shares 24 months from the date of the TSXV acceptance of the Definitive

Option Agreement. The Vendors will retain a 2% Net Smelter Royalty ("NSR") on the properties which can be purchased for CDN $1,000,000. The agreement remains subject to acceptance by the TSXV. A finder's fee will be payable with respect to the transaction pursuant to the policies of the TSXV.

NI 43-101 Disclosure

Mr. Bill Brereton, P.Eng., a qualified person as defined by National Instrument 43-101, supervised the preparation of the technical information in this news release.


"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. 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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