Zacoro Metals Corp.

Zacoro Metals Corp.
Vistior Capital Limited

August 23, 2007 13:38 ET

Zacoro Metals Corp. and Vistior Capital Limited Announce Letter of Intent for Business Combination

TORONTO, ONTARIO--(Marketwire - Aug. 23, 2007) - ZACORO METALS CORP. ("Zacoro") and VISTIOR CAPITAL LIMITED ("Vistior") (TSX VENTURE:VCL.P) announce that they have entered into an arm's length letter of intent dated July 24, 2007, for the completion of a business combination, which, if completed, will be the qualifying transaction (the "Proposed Transaction") for Vistior and result in the listing of the new combined entity to be named Zacoro Metals Corp. (the "Resulting Issuer").


Zacoro Metals Corp. is a widely held Ontario company with its head office in Toronto, Ontario. Zacoro, through its 100% owned Mexican subsidiary, Eucan Mines, S.A. de C.V., has the right to earn a 50% interest in the El Cobre Project comprised of 22 exploitation concessions covering 1,433 ha located in Concepcion del Oro, Zacatecas, Mexico along with related assets. The El Cobre Project has an audited mineral resource and a mill facility with a rated design of 2,250 tonnes per day ("tpd"). In addition, Zacoro is presently conducting a substantial drilling program to further delineate the El Cobre Project resource, all as summarized below.

El Cobre Project Resource Estimate

Zacoro has completed a preliminary resource estimate (the "Resource Estimate") for the El Cobre Project area, which estimate has been audited by Micon International Limited in a National Instrument 43-101 ("NI 43-101") compliant technical report dated March 30, 2007 (the "Technical Report"). The Resource Estimate calculates an indicated resource of 47.7 million tonnes with a grade of 0.7% copper and an inferred resource of 22.8 million tonnes with a grade of 0.484% copper. This Canadian Institute of Mining and Petroleum ("CIM") compliant Resource Estimate is based on over 36,000 metres in 447 holes drilled by Asarco, the Fomento Minero and Macocozac during the 1960's through the 1990's.

Preliminary Resource Estimate for the
In-Situ Copper on the El Cobre Property (No Cut-off Grade)

Contained Contained
Resource Grade Copper Copper
Category Tonnes (% copper) (t) (lbs)
Indicated Total 47,693,281 0.7 335,922 673,187,688
Inferred Total 22,785,052 0.484 110,280 243,187,236

The Technical Report is authored by William Lewis of Micon International Limited, a qualified person as required by NI 43-101.

In addition to the audited Resource Estimate, previous mining operations have stockpiled mixed oxide and sulphide ores totalling approximately 11,250,000 tonnes. Based upon historical information provided to Zacoro by the property owner, these stockpiles have an average reported grade of 1.21% copper. Micon has not audited the stockpiled material and, in light of the need to conduct further sampling and metallurgical testing to define the grade and recoverability, this material cannot be considered as compliant resources under NI 43-101 regulations and should not be relied upon.

Further, the last resource estimate prior to the NI 43-101 compliant Resource Estimate discussed herein, dated December 31, 1993, identified that the El Cobre Property included 11,797,200 tonnes averaging 0.29 g/t gold, 12 g/t silver and 1.14% copper. Zacoro's NI 43-101 compliant Resource Estimate discussed herein does not include these historical gold and silver values as the database for these metals is incomplete.

Zacoro's present exploration program (discussed below) is directed, in part, to provide the missing datasets necessary to establish these values. However, readers are cautioned that while the historical resource estimates discussed in the preceding two paragraphs are considered to be relevant they do not use categories as defined in NI 43-101 and may not be reliable. The historical resource estimates discussed in the preceding two paragraphs are preliminary assessments and are based on prior data and reports obtained and prepared by previous operators, and the reader is cautioned that, unless otherwise stated, none of the calculations conform to NI 43-101 requirements for reporting reserves and resources. There has been insufficient exploration to define the historical resource estimates discussed in the preceding two paragraphs as being NI 43-101 compliant, and as such the historical estimates should not be relied upon. The El Cobre Property will require considerable further evaluation, which Zacoro management and consultants intend to carry out in due course.

In the Technical Report, Micon states that no environmental, permitting, legal, title, taxation, socio-economic, marketing or political issues exist which would adversely affect the mineral resources estimated above. However, mineral resources that are not mineral reserves do not have demonstrated economic viability.

Key Assumptions, Parameters and Methods for the Resource Estimate

Geological modeling was carried out in a systematic process, beginning with a review of the previous geological cross-section interpretations. These sections were used as the baseline geology for a reinterpretation of the drilling data. This work was advanced in conjunction with the interpretation of the geological bench plans during the first phase of modeling. The section and bench plans form a rectified geological model and were entered into a three dimensional model in GEMS software. The bench plans were further refined within the zone of drilling and tied together to make a solid model. The solid model was modified bench by bench and section by section in order to adjust the hard boundaries to include most of the mineralized intervals and exclude weakly mineralized intervals where possible, to define the best estimation of the mineralized skarn body.

Data Verification

As the resource estimate is based on the drilling results of previous operators as far back as the 1960s, the majority of the drill core from the previous exploration programs has not survived. Accordingly, Micon verified the data in two methods: first, sampling of the mineralization, both underground and on surface, has confirmed the presence of base metal as well as gold and silver mineralization at similar tenor to that reported for the El Cobre property; and second, the little drill core that remains from previous exploration programs was reviewed by Micon against descriptions entered into the drill logs, and Micon found that these descriptions adequately described the geological units, structure and mineralogy seen in the core and conform to the generally accepted industry standards currently in effect.

El Cobre Project Mill Facility

A 2,250 tpd mill is located on the El Cobre property, with additional warehousing, office and related infrastructure in place. Zacoro has expended approximately USD $7,500,000 to date in rehabilitation costs to place the mill back into production. Production from the mill commenced on July 9, 2007 and it is presently operating at a rate of approximately 800 tpd. More than 70,000 tonnes of ore are currently stockpiled for crusher feed. Rehabilitation of the mill facility is nearly complete, and 25 days of production have been completed producing approximately 93 tonnes of concentrate. One 60 tonne shipment has gone to port grading 25% copper, 5 % Zinc, 5 grams gold, and 282 grams silver. To date, copper recoveries have ranged from 85 to 97%. The addition of a zinc floatation circuit is under consideration along with Knelson gold concentrating units to recover free milling gold. All required permits for the operation of the mill facility are in place.

El Cobre Project Exploration

Zacoro has undertaken a significant drilling program on the El Cobre Project. Currently four drill rigs are on site, with two more set to arrive in late August. Fifty diamond core drill holes have been completed totaling approximately 16,000 metres in length. Assay results have been received for 23 drill holes to date as set forth below. Results of the remainder of the drill holes are pending. Results include 43m of 3.82% Cu, 2.87 gm Au and 40 gm Ag, and 95m of 1.8% Cu, 2.08 gm Au and 15 gm Ag. Select drill hole results include:

mineralized Mineralized Au Ag
DH# TD zone Metres Cu% gm gm Zn% Bi ppm
53875-2 441.20 14-109m 95m 1.8 2.08 15 low 168
53875-1 101.00 30-38m 8m 4.5 2.5 120 1.25 250
53875-4 207.60 108-151m 43m 3.82 2.87 40.2 0.2 202

0-16m 16m 1.6 0.65 22 low 37
30-48m 18m 2.5 0.79 29 low 62
53850-3 550.05 64-94m 30m 1.45 0.31 15 low 25
104-114m 10m 0.9 0.31 6 low 22
312-323.4m 11.4m 2.24 1.34 72 0.55 89

53875-3 445.01 110-234m 124m 1.51 0.5 17 0.46 low
ding (202-231m) (29m) (1.77)


193-195m 2m 2.2 1.90 14.5 low 36
53875-6 532.00 222-232m 10m 0.74 0.40 5 low 24
318-322m 4m 1.25 0.87 18 low 61

53800-3 401.05 6-66m 60m 2.2 2.13 33.7 0.76 395
138-202m 64m 2.1 0.8 29.0 0.15 246

53975-1 261.12 204.88-222 17.12m 1.04 1.57 11 0.88 low

7.75-79.8 72.05m 1.86 0.85 15 low 273
121.7-124.2 2.5m 2.8 0.74 11 low 115
132-135 3m 2.03 0.127 8 low 83
53800-4 300.53 152-156 4m 1.32 0.138 12 low 121
178-190 12m 1.45 0.37 14.5 low 187
206-210 4m 1.28 0.63 8 low 65

53800-2 199.00 4-95m 91m 1.86 1.77 27.8 0.2 118
53900-2 337.41 152.5-162 9.5m 4.47 2.35 35 0.15 low

53800-1 156.00 4-50m 46m 1.21 0.6 6 low 176
60-82 22m 0.56 0.15 1 low 55

53800-5 128.00 4-64m 60m 1.33 0.62 7.7 low 110
53775-5 117.35 7.4-46m 38.6 1.65 0.79 21 0.16 low
53900-3 122.53 97-101 4m 2.53 2.46 51 low low

53775-4 296.00 186-212m 26m 2.16 0.46 22 low low
248-264m 16m 1.15 0.39 14 low low

53775-3 251.00 141.2-159.4m 18.2m 2.3 0.74 19 low 703
53850-5 501.00 120-123.44m 3.44m 1.87 0.42 85 0.85 low

53700-1 202.69 32-64m 32m 0.99 0.28 5 low 41
90-124m 34m 1.68 0.25 17 low 76

53625-3 330.71 60-83m 23m 2.8 0.74 16 low 47

The drill holes have targeted the skarn mineralization previously identified in drilling completed by Asarco and the Fomento Minero in the period from 1960 through 1988. Mineralized skarn occurs at the contact of the igneous rocks and limestone. Additional mineralized skarn occurs at the contact between limestone and calcareous siltstone and has also been investigated in the current drilling program. The skarn zone at the intrusive contact is nearly vertical with true widths varying from a few metres to more than 150 metres. The mineralized skarn has a strike length of at least 2 kilometres and continues under cover beyond previous drilling. The mineralized skarn has been tested up to 450 metres below the surface, indicating 450 metres of continuous mineralization from the surface in the nearly vertical body. The true width in this cross-section is up to 150 metres and assay results are pending for this fan of drill holes. The proposed 2007 drilling program currently has 90 drill holes planned totaling 35,000 metres including infill and stepout targets. All drill holes are collared with HQ diameter core and are reduced to NQ only when drilling conditions require the reduction in order to complete the drill hole to the target depth.

The table of drill hole assay summaries are weighted averages and account for any differences in sample lengths. Assay values are not cut and the mineralized intervals use a 0.5% cutoff in order to be included in the mineralized interval. In some cases, a two to four metre zone with less than 0.5% copper may be included as internal waste, diluting the overall grade of the interval.

Core samples have been logged, photographed, and half-split for assaying. All assays are being completed by BSI Inspectorate in Reno Nevada and all sample preparation is being completed in their Durango Mexico facility. Selected pulps are being sent to ALS Chemex and SGS for check assays.

NI 43-101 Disclosure

Exploration activities on the El Cobre Project are being conducted under the supervision of Dr. Greg Myers, P. Geo., Zacoro's Executive Vice-President of Exploration and a qualified person for the purposes of NI 43-101.

Terms and Conditions of Zacoro's Option on the El Cobre Project

Pursuant to a mining option agreement dated November 14, 2006 (the "Option Agreement") between Zacoro and Macocozac, S.A. de C.V. (the "Optionor"), Zacoro has the right to earn a 50% interest in the El Cobre Property. To date, Zacoro has completed the following obligations required to earn its interest:

- Paid cash totaling USD $4,250,000;

- Incurred exploration expenses of USD $2,200,000;

- Invested a total of USD $7,500,000 into the rehabilitation of the El Cobre Project; and

- Issued 3,775,364 common shares.

In addition, Zacoro has advanced USD $2,200,000 in working capital to the El Cobre Project, which funds are to be recovered through the payment of 15% of the gross proceeds from the sale of concentrate from the mill facility.

In order to complete the exercise of the option, Zacoro is required to make a final payment of USD $30,000,000 and issue an additional 4,000,000 common shares on or before April, 2008. The Optionor has the right to convert a portion of the USD $30,000,000 into common shares at a price of CAD $0.75 per share, provided that this conversion right is limited to, when combined with the other shares issued under the Option Agreement, 20% of Zacoro's then outstanding common shares.

In addition, Zacoro has committed to incur an additional USD $8,000,000 in exploration expenses between April 2008 and April 2012.

Pursuant to an exploration, development and mine operating agreement dated January 31, 2007 (the "Operating Agreement") between Zacoro and the Optionor, Zacoro has agreed that the El Cobre Property shall be held by a Mexican company (the "Operating Company") owned 50% by Zacoro and 50% by the Optionor. Zacoro and the Optionor will have equal representation on the board of directors of the Operating Company and the day to day operations will be administered by a management committee consisting of one representative of Zacoro and one representative of the Optionor. On exercise of the Option, the Optionor shall transfer its 100% interest in the El Cobre Property into the Operating Company. After 25 years, title to the El Cobre Property shall revert back to the Optionor. In addition, Zacoro has agreed to provide all funding for all capital investments for the El Cobre Project, which investments shall be recovered, without interest, through an amortization schedule to be determined by the management committee.

Zacoro Capitalization

Zacoro has issued and outstanding 31,571,315 common shares, and special warrants convertible into an additional 47,811,331 common shares upon closing of the Proposed Transaction. In addition, upon conversion of the special warrants, Zacoro will have options and warrants outstanding entitling the holders thereof to purchase an additional 22,612,600 common shares at prices ranging from CAD $0.50 to CAD $1.00 per share. To date Zacoro has raised in excess of CAD $30,000,000 to date in private financings and there is no financing to be completed in connection with the Proposed Transaction.

Zacoro Summary Financial Information

Interim Year Ended
March 31, 2007 December 31, 2006
(unaudited) (audited)
(CAD $ thousands) (CAD $ thousands)
----------------- -----------------

Net income (loss) (745,167) (320,978)
Cash and cash equivalents 5,966,146 6,874,823
Total assets 10,054,513 10,690,053
Working capital 5,702,179 6,292,327
Shareholder's equity 9,760,746

Zacoro Management

In conjunction with the completion of the Proposed Transaction, all current directors and officers of Vistior will resign and will be replaced by the persons, and in the capacities, listed below. Brief biographies of the proposed nominees are as follows:

Daniel T. Farrell, President, Chief Executive Officer and Director

A graduate geologist, Mr. Farrell boasts a career spanning 22 years as a financial advisor focused on the natural resource exploration industry. Between 1980 and 1985, Mr. Farrell was a registered representative at Merit Investments in Toronto and from 1985 -1991 he was a member of The Mining Group at Yorkton Securities in Toronto. Mr. Farrell joined American Express Financial Advisors in 1991, and since 1995, has been involved in management positions with a number of junior resource companies, including Diadem Resources Ltd., Tiaro Bay Resources, RJK Explorations Ltd. and Greater Lenora Resources. Most recently Mr. Farrell founded Quincy Energy Corp. in 2002, which was acquired by Energy Metals Corporation in 2006. Mr. Farrell holds a B.Sc. in geology from Michigan Technological University in Houghton, Michigan.

Greg Myers, PhD., Executive Vice-President, Exploration, Chief Operating Officer and Director

Dr. Myers is a graduate of Washington State University (Ph.D) and the University of Alaska (M.Sc and B.S. in Geology). He is a recognized expert in the assessment and evaluation of gold - copper skarns and porphyry copper settings and has enjoyed a distinguished career that has been strongly field and research oriented. Prior to joining Zacoro, Dr. Myers was the manager of mine exploration for BHP at the Tintaya mine in Peru. During his three year tenure the mine reserve increased from 48 million tonnes to more 170 million tonnes. Dr Myers has designed and implemented several successful exploration and mine feasibility programs in Mexico, Peru, and North America for base and precious metal mineralization, working for several companies including Phelps Dodge, Kennecott, Newmont, and several junior companies. Dr. Myers served as President, CEO, and Director of Sand River Resources and Quaterra Resources, directing base and precious metal exploration in Nevada, Canada, and Mexico.

John Legg, Executive Vice-President, Finance, General Counsel and Director

Mr. Legg is a member of the Law Society of British Columbia and the Business and Securities Law Subsections of the Canadian Bar Association, and has over 10 years experience in natural resources law, securities and corporate finance law, corporate law and mergers and acquisitions. Mr. Legg holds a BA from the University of British Columbia and an LLB from Dalhousie Law School.

James Fairbairn, Chief Financial Officer

Mr. Fairbairn, a Chartered Accountant, has over 20 years of experience in the junior mining exploration business. He has served as the CFO/Treasurer for a number of public companies including Ausnoram Holdings Ltd., Band Ore Resources Corp. and CGX Energy Inc. Mr. Fairbairn holds a BA from the University of Western Ontario.

Charlotte May, Corporate Secretary

Ms. May has over 20 years experience gained in the institutional brokerage industry and the oil and gas and junior industrial sectors. Ms. May provides consulting services to a number of junior resource companies in the areas of marketing, corporate secretarial and public company administration.

John Cullen, Director

Mr. Cullen has over 24 years experience in public company financing, corporate/capital structuring and management. Following 15 years of Canadian investment brokerage experience, Mr. Cullen founded a number of public international resource companies, including CGX Energy Inc. and Candax Energy Inc. He is also a founder/board member of a number of private oil/gas and mining enterprises.

Dieter Krewedl, Director

Mr. Krewedl has been a self-employed mining industry consultant since January 2004. In addition, Mr. Krewedl has been an officer or director of several companies involved in the natural resource exploration business including: Senior Vice President, Exploration based in Coeur d'Alene Mines, a silver and gold producer with offices in Coeur d'Alene, Idaho (May 1998 to December 2003); and Vice President, Exploration of Echo Bay Mines Ltd., a North American gold mining company (June 1996 to February 1998).

William Sheriff, Director

Mr. Sheriff has been the President of Platoro West Incorporated since 1985, a mineral exploration firm specializing in project identification and acquisitions throughout the western USA. Mr. Sheriff currently serves as a Director (since 2005) and Chairman (since 2006) of Energy Metals Corporation, a public company listed on the TSX and the NYSE Arca, and a Director of Pan-Nevada Gold Corporation (since 2003) and Eurasian Minerals Inc. (since 2006), both public companies listed on the TSXV. Mr. Sheriff also serves as President of Pacific Intermountain Gold Corporation ("PIGCO"), a private corporation owned by Seabridge Gold Corporation. PIGCO holds over 30 advanced gold exploration projects throughout Nevada. Mr. Sheriff received his B.Sc. in Geology from Fort Lewis College, Colorado and conducted graduate studies at the University of Texas-El Paso in Mining Geology and Mineral Economics.


Pursuant to the terms of the letter of intent, subject to completion of satisfactory due diligence and receipt of applicable regulatory and shareholder approvals, if required, and entering into a definitive agreement, in order to acquire a 100% interest in Zacoro, it is intended that Vistior will issue 79,382,646 common shares (the "Vistior Shares") to the holders of the common shares of Zacoro (the "Zacoro Shares"). Prior to the combination, Vistior will consolidate its shares on the basis of one Vistior Share for each two and a half (2.5) presently outstanding Vistior Shares, resulting in 1,200,000 post consolidation Vistior Shares being outstanding prior to the completion of the Proposed Transaction. It is intended that the Proposed Transaction will be effected by way of a three-cornered amalgamation, with each issued and outstanding Zacoro Share being exchanged for one post consolidation Vistior Share, for deemed consideration equivalent to CAD $0.75 per Vistior Share and total consideration of CAD $59,536,985.

In addition, Vistior will issue 7,500,000 options and 15,112,600 warrants to acquire Vistior Shares for each option or warrant of Zacoro outstanding, as the case may be, not exercised prior to closing of the Proposed Transaction, which replacement options and warrants shall, subject to adjustment, be exercisable on the same terms and conditions as the Zacoro options and warrants.

It is anticipated that the Resulting Issuer will meet the listing requirements of the Toronto Stock Exchange ("TSX") for a Mining Issuer.


Zacoro will, if necessary, engage a sponsor in connection with the Proposed Transaction. If an agreement to act as sponsor is entered into it should not be construed as any assurance with respect to the merits of the Proposed Transaction or the likelihood of completion.

Terms and Conditions of the Proposed Transaction

The Proposed Transaction is an arm's length transaction as the directors and officers of Vistior have no ownership or other interest in Zacoro. As part of the regulatory approval process, Vistior anticipates submitting for review to the TSX Venture Exchange ("TSXV") a filing statement. The Vistior Shares will remain halted until such time as permission to resume trading has been obtained from the TSXV and submission of required documentation to the TSXV.

Completion of the transaction is subject to a number of conditions including, but not limited to, the parties entering into a definitive agreement, TSXV acceptance and, if applicable pursuant to the requirements of the TSXV, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

All information contained in this news release with respect to Zacoro was supplied by Zacoro for inclusion herein, and with respect to such information, Vistior and its board of directors and officers have relied on Zacoro.

This press release includes "forward looking statements", within the meaning of applicable securities legislation, which are based on the opinions and estimates of management and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward looking statements.
Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "budget", "plan", "continue", "estimate", "expect", "forecast", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar words suggesting future outcomes or statements regarding an outlook. Assuming completion of the Proposed Transaction, such risks and uncertainties include, but are not limited to, risks associated with the mining industry (including operational risks in exploration development and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainties involved in the discovery and delineation of mineral deposits, resources or reserves; the uncertainty of resource and reserve estimates and the ability to economically exploit resources and reserves; the uncertainty of estimates and projections in relation to production, costs and expenses; the uncertainty surrounding the ability of Zacoro to obtain all permits, consents or authorizations required for its operations and activities; and health and safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the ability of Zacoro to fund the capital and operating expenses necessary to achieve the business objectives of Zacoro, the uncertainty associated with commercial negotiations and negotiating with foreign governments and risks associated with international business activities, as well as those risks described in public disclosure documents filed by Zacoro. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in securities of Visitior and, assuming completion of the Proposed Transaction, the Resulting Issuer should not place undue reliance on these forward-looking statements. Statements in relation to "resources" and "reserves" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described can be profitably produced in the future. Readers are cautioned that the foregoing lists of risks, uncertainties and other factors are not exhaustive. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements contained in this press release or in any other documents filed with Canadian securities regulatory authorities, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.


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