Regal Resources Inc.
CNSX : RGR

Regal Resources Inc.

February 03, 2012 09:00 ET

Regal Signs Definitive Agreement to Acquire 100% Of the Patagonia/Sunnyside Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 3, 2012) - Regal Resources Inc. (the "Company" or "Regal") (CNSX:RGR), is pleased to announce the signing of a definitive agreement (the "Purchase Agreement") with Minquest Inc. ("Minquest") of Reno Nevada to acquire all of the claims comprising the Patagonia (Sunnyside) project (the "Property"). Under the terms of the Purchase Agreement, in consideration for the Property, Regal will pay to Minquest the sum of US$800,000, of which US$100,000 will be forwarded as a non-refundable deposit within 3 business days of signing the Purchase Agreement. The Property is currently the subject of an option agreement between Regal and Minquest, which will be terminated upon completion of the transactions contemplated by the Purchase Agreement, thereby eliminating work commitments of more than $US25,000,000 and payments of nearly 2,000,000 shares of Regal's shares. The Purchase Agreement also provides that Minquest will retain a 1.5% royalty on the Net Smelter Returns from the Property (which is a reduction from the 3% royalty reserved for Minquest under the current option agreement) which can be converted at Minquest's election into shares of Regal in certain circumstances. Further, the Purchase Agreement provides that Minquest will assign its rights and obligations under an agreement among Minquest, Russell Corn and Brian Corn pertaining to certain claims (the "Corn Claims") which form part of the Property. Minquest has also agreed to assist Regal in negotiating the purchase of the Corn Claims, for which Regal will be responsible for $100,000 of the purchase price. If such purchase is successful within 90 days of the closing of the transactions contemplated by the Purchase Agreement, Minquest shall also receive a 1.5% royalty on the Net Smelter Returns from the Corn Claims.

Additionally, Regal advises that it has expanded its claim holdings by an additional 15 claims contiguous to its existing Patagonia claim block.

The Project

The Patagonia/Sunnyside project is located near Nogales, Arizona, 45 miles (72 kilometers) south of Tucson. The project is located in the prolific Laramide porphyry copper province along the trend of the Cananea Mine (7.14 billion tons @ 0.41% copper) to the south, and the Resolution Copper deposit to the north (1.5 billion tons @ 1.5% copper). The property consists of 295 claims totaling 5600 acres (2266.2 hectares), and contains several areas of drilling completed by ASARCO, Anaconda and others. This historic work has identified four primary targets and several secondary targets. The four main targets were identified by geologic mapping and core drilling conducted from 1952 through 1992. The targets include the BX Breccia, Sunnyside Deep, Sunnyside shallow and Sunnyside Skarn.

The BX Breccia is a large altered area containing chalcocite-enargite mineralization near surface. The BX breccia pipe had several holes drilled by Anaconda in the mid 1950's. The target area is centered on drill holes SU-2 and 3 which contain 317 feet grading 0.67% copper as chalcocite and 74 feet grading 0.62% copper as chalcocite respectively according to reports written by Anaconda.

The Sunnyside targets consist of approximately three square miles of alteration (777 hectares) containing chalcocite-enargite mineralization near surface. Wide spaced drilling by Kerr-McGee and ASARCO identified deep porphyry copper-molybdenum mineralization (Sunnyside Deep) in five drill holes spaced from 1000 to 2000 feet apart. ASARCO internal reports list drill hole TR 10 which include an interval of 350 feet grading 0.57% copper, 0.033% molybdenum, 0.006 oz/ton gold and 0.10 oz/ton silver. Drill hole TM 8, from the same report, contains 1200 feet averaging 0.25% copper, 0.017% molybdenum, and 0.10 oz/ton silver (no gold assays were available). The mineralization is open to the south, west, and north and to depth according to ASARCO reports.

The drilling above also intersected copper mineralization as chalcocite-enargite near surface (Sunnyside Shallow). Drill hole TM 8 described above intersected 70 feet of 0.58% copper, an intervening zone of 160 feet grading 0.25% copper, and an additional 110 feet grading 0.68% copper from 120 feet to 480 feet below surface. Other drill holes include BB 1 with 140 feet grading 0.41% copper, BB 2 with 100 feet of 0.60% copper, BB3 with 76 feet of 0.60% copper and BB 6 with 110 feet of 0.91% copper. Silver occurs along with the copper in amounts from 0.10 to 0.50 oz/ton.

Confirmation sampling by Regal on obtained historic ASARCO core notably drill hole TCH 2 intersected several mineralized zones including 57 feet @ 1.2% copper, 4.1% lead, 10.2% zinc, 10.2 oz/ton silver, 0.07% bismuth, as well as 124 feet of 0.22% copper, 0.9% lead, 13.6% zinc, 8.1 oz/ton silver, 0.09% bismuth. Furthermore, results of historic ASARCO drill hole TCH 2A returned 40 feet of 1.42% copper, 0.3% lead, 0.6% zinc, 2.6 oz/ton silver, 0.006 opt gold, 0.03% bismuth, 0.08% cerium, 0.06% lanthanum. These holes are spaced from 350 to 1500 feet (107 to 457 meters) apart.

The information contained herein with respect to historical drill results comes from historical records and has not been independently verified by the Company.

The technical information in this release has been reviewed and approved by Mr. Richard Kern, BSc., M.Sc., P. Geo.; a 'qualified person', as defined by NI 43-101, Standards for Disclosure of Mineral Projects unless otherwise noted.

About Regal Resources Inc. www.regalresinc.com

Regal Resources Inc. is a junior mineral exploration and development company based in Vancouver, Canada. The company is focused on the development and acquisition of copper projects in the prolific copper producing state of Arizona. The company currently has two advanced exploration copper/silver properties, the Patagonia property (Sunnyside), located near Nogales, Arizona and the Squaw Peak property located near Camp Verde, Arizona. Regal Resources is listed on the Canadian National Stock Exchange (CNSX) under the symbol (RGR).

This news release contains certain statements that may be deemed "forward-looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. The Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change, except as required by law.

Contact Information

  • Regal Resources Inc.
    Gregory M Thomas
    President
    604.730.0234

    Regal Resources Inc.
    Drew N Brass
    VP Communications
    604.730.0234
    www.regalresinc.com