Plexmar Resources Inc.
TSX VENTURE : PLE

Plexmar Resources Inc.

September 19, 2007 14:08 ET

Signature of an Option and Joint Venture Agreement for the Escondida Project in Ecuador

QUEBEC, QUEBEC--(Marketwire - Sept. 19, 2007) - Plexmar Resources Inc. (TSX VENTURE:PLE) is pleased to announce the signature of an option and joint venture agreement (the 'Option Agreement') for its Escondida project in Ecuador.

Plexmar Resources Inc. ('Plexmar') and its subsidiary Plexmar Ecuador S.A. ('Plex-Sub') entered into the Option Agreement with Escondoro Resources Ltd. ('Escondoro') and its subsidiary Sadcoecuador S.A. ('Esc-sub'), pursuant to which Esc-Sub is granted an exclusive option to acquire up to an undivided 60% interest in the Escondida Project owned by Plex-Sub. This transaction is part of a series of transactions announced since the acquisition by Plex-Sub in November 2006 of 100 % of the mining rights of the concessions forming part of the Escondida project.

Escondoro is currently actually a private company but plans to file a preliminary prospectus in the coming days and intends to complete its initial public offering ('IPO') in the coming weeks.

Pursuant to the Option Agreement, the grant to Esc-Sub of up to an undivided 60% interest in the Escondida project is subject to the following terms and conditions:

a) the payment by Escondoro to Plexmar of an aggregate amount equal to the investment made by Plexmar being CAD $1,384,822 ;

b) the undertaking by Escondoro to bear and pay all payments due by Plexmar or Plex-Sub to Minera DMG S.A. being US$850,000;

c) the issuance by Escondoro, on the date that its outstanding common shares become listed on the TSX Venture Exchange ('Listing date'), of 3,000,000 Common Shares to Plexmar;

d) Work expenditures by Esc-Sub aggregating US$3,000,000 in exploration and development of the Property in accordance with the following schedule:

(i) US$750,000 on or before one year after the Listing Date of Escondoro;

(ii) US$1,000,000 on or before two years after the Listing Date of Escondoro;

(iii) US$1,250,000 on or before three years after the Listing Date of Escondoro;

e) as long as Plexmar or Plex-Sub is a shareholder of Escondoro, Plexmar can designate two directors to the board of directors of Escondoro.

Upon Esc-Sub having acquired a 60% interest in the Escondida project, a joint venture will automatically form with Plex-Sub holding a 40% interest. Terms of the joint venture will include:

a) Esc-Sub will act as operator of the joint venture and will have the right (but not the obligation) to remain operator for so long as its participating interest is 50% or more; and

b) a management committee will be formed for the direction and control the affairs of the joint venture, with the operator having a preponderant vote on any matter to be determined by the committee;

Also, Escondoro will reimburse Plexmar all expenditures pertaining to the project: exploration work, legal fees & others currently estimated at CAD $700,000. The total sum to be received by Plexmar is approximately CAD $2.1M.

This transaction has been approved by the boards of directors of both Companies and is awaiting final approval from the regulatory authorities.

According to Guy Bedard, "This is an excellent deal for Plexmar, it will greatly limit share dilution, keep the necessary funds to advance Bolsa del Diablo and have a large exposure in southeastern Ecuador near a major gold find. Plexmar will receive a significant number of shares in Escondoro, and retain a 40% carried interest in the project for the next 3 years."

The Escondida project represents one of the largest land positions in the Cordillera del Condor near Aurelian Resources' Fruta del Norte gold discovery. The project covers 84,110 hectares (841.1 km2) and borders Aurelian's large land package on the western flank and north of Corriente Resources claims. Namely, the northern block covers 28.5 Km of the contact between the Zamora batholith and the Misahualli volcanic formation. (Refer to www.plexmar.com for a map) Fruta del Norte is believed to be the most significant gold discovery made by a junior miner in over a decade.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

This press release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future exploration drilling, exploration activities and events or developments that the Company expects, are forward looking statements. 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 or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions.

PROFILE

Plexmar is a junior company focused on precious metals in Peru and Ecuador

PROPERTIES

Gold :Peru: Oro Del Norte,Marilia,

Bolsa Del Diablo, Ecuador: Escondida

CORPORATE INFO

- 133 M shares outstanding

Contact Information

  • Guy Bedard, president
    418-658-6776