VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 20, 2011) - Terreno Resources Corp. (TSX VENTURE:TNO) ("Terreno" or the "Company") is pleased to announce that it has agreed to acquire, from a private vendor, 100% of the Jatuarana Phosphate Project, the Nova Olinda Potash Project and the Manaus Bauxite Project, all located in Amazonas State, Brazil. The transaction is subject to certain due diligence conditions and to approval by the TSX Venture Exchange.
Jatuarana Phosphate Project
The project consists of 18 tenements covering 1770 km2 of the Jatuarana Sedimentary Basin in Amazonas State, north-western Brazil. The project is transected by the Trans-Amazon Hwy and lies 30 km to the west of the main agricultural centre in the Amazon State and 220 km to the north of the Mato Grosso soy belt region. Phosphate occurrences were first discovered on the project by the Geological Survey of Brazil in the 1980s. Rock chip sampling at the time returned grades of 7% to 9.3% P2O5 over a widespread area. Analysis suggests that surface weathering could have depleted the P2O5 grades reported by as much 50%. In certain areas, the phosphate mineralization is inter-bedded with Glauconite rich rock which contains soluble potassium. The sedimentary rock hosting the mineralization is flat lying, exposed at surface and has been identified over a significant area.
Nova Olinda Potash Project
The project consists of 5 tenement applications in the Amazon potash basin. The tenements are located to the west of the Fazendinha and Arari sylvinite deposits which are owned by Petrobras and contain reserves of in excess of 1 billion tonnes at a grade of 18.5% K2O. The Amazon potash basin is considered to be an analog to the Saskatchewan potash basin based on similar geology, origin and size. Estimates suggest the basin could contain on the order of 30 billion tonnes of K2O.
Manaus Bauxite Project
The project consists of two tenements north of the Amazon River and floodplain. The bauxite formation has been identified in 12 plateaus on the project covering 34 km2. The project is located to the west of the Porto Trombetas (MRN) mine, the largest bauxite mine in Brazil producing over 17 million tonnes in 2010.
"We are very excited to acquire this portfolio of projects in Brazil. Each project has been targeted for its prospective geology and for commodities with attractive fundamentals globally and within Brazil specifically," commented Philip Williams President and CEO. "We look forward to completing our due diligence expeditiously so we can begin work programs on each project this summer. The Jatuarana Phosphate project is drill ready and we see potential to generate an initial resource in a short time frame. At the Nova Olinda Potash project our focus will be on interpreting existing data and commissioning additional geophysical programs to identify drill targets while at the Manaus Bauxite project we intend to undertake a surface sampling program this summer to assess the grade and thickness of the target horizon."
Terreno will pay the vendor an initial US$100,000 option fee which provides for a 90 day period to complete certain due diligence. Once the option is exercised, Terreno will have 30 days to settle the transaction at which point it will make a US$300,000 payment followed by two separate US$250,000 payments on the 6 month and 12 month anniversaries of the settlement date. A further US$100,000 is payable to the vendor 14 days following the grant of the last tenements comprising the Nova Olinda Potash Project. On settlement Terreno will also issue to the vendor 7,500,000 shares subject to a minimum 1 year escrow and conditions of regulatory approvals. A further 1,500,000 shares will be issued to the vendor 14 days following the grant of the last tenements comprising the Nova Olinda Potash Project also subject to a minimum 1 year escrow and conditions of regulatory approvals.
The vendor is also entitled to additional cash payments based on the follow project milestones:
- US$250,000 within 14 days of the completion of a maiden resource on each project.
- US$2,000,000 within 14 days of the completion of a preliminary economic assessment on each project.
- US$3,000,000 within 14 days of the date that commercial production commences on each project.
Further, the vendor will retain a 2.0% NSR on each project of which 1% can be purchased by the company for US$2,500,000 after which the company would retain a right of first refusal on the remaining 1%.
The Qualified Person for Terreno's projects is Mr. Peter Mullens, who is a member of the Australian Institute of Mining and Metallurgy. Mr. Mullens has reviewed and approved the technical content of this release.
About Terreno Resources
Terreno, meaning "of the earth" in Spanish, represents the Company's focus on natural resource opportunity development in South America. Terreno has option agreements on three exploration projects in Argentina; La Poposa (formerly referred to as Amarillo) in San Juan, Socompa and Trigal in Salta. All three projects boast significant alteration systems and have the potential for copper, gold and silver mineralization. For more information, please visit www.terrenoresources.com.
To view Figure 1, please visit the following link: http://media3.marketwire.com/docs/PNP420fig1.pdf
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.
Contact Information:
Philip Williams, CFA
President and CEO
416.643.7631