Stingray Resources Inc.

Stingray Resources Inc.

November 29, 2006 14:29 ET

Stingray Acquires Noranda Exploracion Mexico From Xstrata

TORONTO, ONTARIO--(CCNMatthews - Nov. 29, 2006) - Stingray Resources Inc. (Stingray)(TSX VENTURE:SRY) is pleased to announce that it has entered into an Agreement with Xstrata plc (Xstrata), through Xstrata's subsidiaries Falconbridge Limited and Noranda Mining and Exploration Inc. whereby Stingray will acquire Noranda Exploracion Mexico S.A. de C.V.("Normex"). The acquisition will result in Stingray owning a 100% interest in the El Pilar Copper Property (El Pilar) located in Sonora, Mexico. In addition, Stingray will acquire a 25 year data base, several exploration stage properties plus office, employees and equipment that will be beneficial for future work.

Peter Mordaunt President and Chairman of Stingray states "This is a tremendous acquisition for Stingray. The El Pilar is an advanced exploration property that has all the earmarks of an SX-EW copper mine and is precisely the type of project our management group can advance to a Feasibility Study with a methodical and expeditious work program. We know this part of Mexico as well as anyone and have demonstrated in the past through hard work and the right project we can add value for our shareholders."


The terms of the deal require Stingray to make 2 cash payments to Xstrata totaling $US 20 million within 6 months and issuing to Xstrata 2 tranches of Stingray common shares; 5% of the outstanding shares at the conclusion of the acquisition and an additional 5% of the outstanding shares upon delivery of a Feasibility Study. Other details include a sliding scale Metal Sales Royalty starting at 1% for an accumulated resource up to 3 billion pounds of copper equivalent rising to a maximum of 3% for more than 5 billion pounds. In addition, there is a 50% Back-In Right provision for Xstrata in the event that more than 5 billion pounds of accumulated copper equivalent resources (measured and indicated) and reserve (proven and probable) are calculated on the El Pilar property. If the Back-In Right is exercised Stingray will remain operator of the Joint Venture. No finders fees are payable on the transaction.


Stingray has completed technical and corporate due diligence over a 6 month period on El Pilar and Normex. Based on the review of all available data, Stingray believes there is strong evidence that El Pilar could be a mine. Initial work at the property will focus on infill resource/reserve definition drilling and detailed metallurgy. Metallurgical work on the property thus far has concluded that the majority of the copper minerals at El Pilar are acid soluble and amenable to heap leaching.


The property is located in north-central Sonora, roughly fifteen (15) kilometres south of the Arizona/Sonora border. The property is situated in the highly productive/prospective, Sonora-Arizona Porphyry Copper Province which hosts numerous copper deposits (see map attached) ranging from the Cananea Copper Mine (7.1 billion tonnes @ 0.42% copper) in the south through to central Arizona where the Morenci Copper Mine of Phelps Dodge Corp. is located (4.7 billion tonnes @ 0.52% copper). This copper trend accounts for the second largest concentration of porphyry copper deposits in the world where mining for copper has been continuous for over 100 years. El Pilar lies 45 kilometres northwest of the Cananea Copper Mine of Grupo Mexico, the largest porphyry copper deposit in Mexico and one of the largest in the world. The El Pilar property consists of concessions that total 6324 hectares in fifteen claim blocks located in the middle of this prolific copper trend.


Copper at El Pilar is hosted by a conglomerate unit containing clasts of intrusive, porphyry and highly silicified rock. The mineralization is interpreted to have been derived from a pre existing porphyry copper deposit and/or related structurally controlled mineralization. Reconstruction of geological events suggests that this material was mechanically weathered and eroded, transported, and deposited in a conglomerate formation. The Geological Report and Resource, is detailed in the NI 43-101 compliant Technical Report dated October 31, 2006 by Gary Woods, P.Geo., Manager of Central America for Normex. Independent resource calculations calculated by Magri Consultants of Chile in 2005 are; Total Inferred Resource - 306,200,000 tonnes averaging 0.28% of total copper containing 875,000 tonnes of copper. At a 0.25% total copper cut-off grade, the Inferred Resource was estimated at 179,817,000 tonnes averaging 0.365% total copper containing 656,332 tonnes of copper (1.447 billion pounds copper). The principal copper mineral is chrysocolla which is acid soluble and a known copper mineral in many copper heap leach operations. The deposit has been drill tested with roughly 200 metre spaced holes. 100 metre drill spacing is needed to increase the level of confidence in the resource. At this time, the resource remains open to the south.


A study entitled "El Pilar's Preliminary Economic Evaluation: Scoping Study January, 2006" was prepared by AMEC E&C Services Inc. of Phoenix, Arizona. The AMEC report concludes "A preliminary economic evaluation completed by AMEC indicates that the property has the potential to be a viable copper producer". Metallurgical test work to date is of a preliminary nature and much more metallurgical testing is required in order to provide information needed to predict the metallurgical characteristics of the deposit and simulate a commercial operation. However, preliminary column leach tests completed on El Pilar mineralization indicate that copper recoveries are highly dependent on copper grade with higher grades yielding higher recoveries. Metallurgical test work was carried out on resource material at Falconbridge's Lomas Bayas mine in Chile in 2004. Copper recoveries averaged 63% for all columns including low grade material not considered economic. For mineralized material greater than 0.25% copper, the recoveries increased to an average of 75%.


Two holes drilled at the south end and outside of the resource are spaced 600 metres apart and both contain significant mineralized intervals averaging greater than 0.25% copper. Further drilling could identify a higher grade section between the two holes which would provide significant upside to the size of the resource. The most southerly drill hole along the conglomerate horizon, situated 400 metres further south of the above mentioned holes contains 32 metres of 0.31 % copper and more drilling is needed to confirm the tonnage and grade of the mineralization in this area. Stingray anticipates that the resource at El Pilar will increase with further drilling.


The current size and grades of copper mineralization defined at El Pilar are similar to those reported by Frontera Copper Corp. at their Piedras Verdes Property in the southern part of Sonora, Mexico. This new copper mine is being placed into commercial production within the 4th quarter of this year and it is expected to yield comparable operational costs and other considerations that Stingray will encounter in their effort to advance the El Pilar copper project.


As part of the purchase, Stingray will also acquire 7 additional exploration properties within Mexico. These properties total more than 187,000 hectares and are at various stages of development which offer Stingray additional exploration opportunities.


Stingray anticipates the arranging of an equity financing to fund both the El Pilar property acquisition and for an advanced exploration program to better define the size, quality and character of this copper resource. Project advancement to a Feasibility Stage will be the focus of Stingray's immediate efforts in Mexico.

Peter Mordaunt, P. Geo is the qualified person pursuant to National Instrument 43-101 and supervised the preparation of the technical information presented in this news release.

TSX Venture; Issued: 12,806,330 common shares.

Certain Statements presented herein may constitute "forward-looking statements". Such forward-looking statements may include potential mineralization, resources and reserves, conclusions of economic scoping, prefeasibility and feasibility studies, estimates of future production, capital and operating costs, prices of metals and other known and unknown risks. These and other factors and uncertainties may cause material differences from future results as expressed or implied by these forward-looking statements. These risks, uncertainties and other factors include but are not limited to the risks involved in the exploration, development and mining business.

For a map of the Arizona & Sonora - Significant Copper Deposits, please click on the link below:


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