Abacus Mining and Exploration Corporation ("Abacus")(TSX.V:AME) is pleased to announce that it has signed two letters of intent ("LOIs"), one with New Gold Inc. ("New Gold") (TSX/AMEX: NGD) and the second with New Gold and Teck Cominco Limited ("Teck Cominco") (TCK.A, TCK.B:TSX and TCK:NYSE) to resolve certain issues related to land access and surface and mineral rights required for the potential development and future production of its assets in the Afton -- Ajax camp near Kamloops, British Columbia.
The first LOI between Abacus and New Gold will provide Abacus with the ability (through an option) to aggressively explore areas surrounding the historic Ajax pits with the intent to design a large scale open pit operation. The option requires that Abacus incur exploration expenditures of $2.5 million within a 2 year period, over the New Gold's ground which surrounds the Ajax pits, and deliver a preliminary economic evaluation within 6 months after the 2 year period ends. In the event a joint venture is formed, Abacus would hold a 60% interest in, and be the operator of, any open pit operation (to an agreed to maximum pit depth not exceeding 500 metres), while New Gold would hold a 60% interest in, and be the operator of, any underground mining operation. Abacus will retain its 100% interest in the core group of claims in the Ajax West, Ajax East and Monte Carlo areas. The Ajax West area alone contains inferred resources of over 147 million tonnes with average copper grade of 0.37% per tonne and an average gold grade of 0.23 grams per tonne containing over one billion pounds of copper and over one million ounces of gold.(calculated at a 0.20% copper cutoff) The Ajax East NI43-101 resource estimate is expected to be completed in early 2008.
The second LOI is a three Way between Abacus, New Gold and Teck Cominco. Abacus announced the closing of a transaction with Teck Cominco (November 25, 2005) in which it is purchasing the historic Afton mill building, the surface rights surrounding this building, and the tailings facility from the historic Afton open pit mine, in addition to the rights of access for tailings and recycle lines between the two areas. New Gold announced the closing of a transaction (October 25, 2007) in 3 which it acquired the surface rights to the land required to develop its New Afton Project, and the water pipeline which previously supplied the Afton open pit mine. Some of the land purchased by New Gold from Teck Cominco lies between the old mill and tailings facility, and in the three way LOI New Gold has agreed to ensure Abacus maintains the rights of access granted by Teck Cominco. The three way LOI also provides Abacus with shared use of New Gold's water pipeline, to provide all water necessary for Abacus to develop its Afton - Ajax project. This LOI also provides New Gold with access from the Trans-Canada Highway to its New Afton operations over a small portion of the land which Abacus is purchasing from Teck Cominco around the old Afton mill building.
"From the beginning we have believed that all three companies must cooperate to ensure that the Afton-Ajax Cu-Au District is developed in an efficient and mutually advantageous way," said Doug Fulcher, Abacus President and Chief Executive Officer. "As a result of these agreements all three companies receive meaningful benefits and, importantly, Abacus now has the opportunity to test the potential for consolidating the Ajax East and Ajax West pits into one large super pit with a potential strike length of at least 1.5 kilometres. This is a significant step forward in defining what we believe has the potential to be a much larger resource than previously considered and will allow any future production to be optimized."
Teck Cominco, the last active operator for the Afton - Ajax District, sold Abacus the Afton Mill infrastructure, tailings pond and related permits, access right of ways, rights to water and certain surface rights (News Release dated November 25, 2005) In 2005 an independent evaluation valued these assets at more than $38 million. In the event of a production decision these assets are expected to significantly reduce capital costs and timing for start up.
Since 2005 Abacus has increased the resources through an aggressive diamond drilling program. These agreements enable Abacus to vigorously pursue its objective of developing large-scale surface mining operations at the Afton-Ajax camp from Ajax West, Ajax East, DM, and Rainbow by 2010.
The LOI's are non-binding and are subject to the signing of definitive agreements.
About the Afton-Ajax Camp
The Afton-Ajax camp consists of at least seven known copper gold deposits, five of which are 100 per cent owned by Abacus: Ajax West, Ajax East, Rainbow Zone, DM Zone, and the Crescent Area. To date, Abacus has delivered NI43-101 compliant resource estimates on Ajax West, Rainbow Zone, and the DM Zone and will complete enough drilling this year for resource estimates on the remaining areas. A preliminary economic analysis is expected by mid-2008 and a feasibility study anticipated by the end of 2008. Potential production is planned to start up as early as 2010. To date, the deposits controlled by Abacus contain globally over 241 million tonnes of largely open pit potential mineralization comprising of 1.84 billion pounds of copper and over 1.42 million ounces of gold at a 0.20% copper cut-off grade. (See table below)
|Zone||Tonnes||Copper (%)||Gold (g/t)||Copper (lbs)||Gold (ounces)|
(Note: All resources at 0.20 % copper cut off)
About the Company
Abacus is an exploration stage and development company that holds a 100% interest in five significant mineral properties in the prolific Afton Camp. Abacus has three NI43-101 compliant resource estimates19 containing globally over 1.8 billion pounds of copper and over 1.4 million ounces of gold using a 0.20% copper cut-off. Abacus also has the added advantage of owning significant infrastructure in the Afton Camp including tailings dams, mill infrastructure, water rights, and all relevant permits. Abacus expects to complete feasibility studies by the end of 2008 with potential production as early as 2010. For more information, please visit our website at www.amemining.com
On Behalf of the Board,
ABACUS MINING AND EXPLORATION CORPORATION
President and Chief Executive Officer
This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address events or developments that Abacus Mining and Exploration Corp. (the "Company") expects to occur, are 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. Forward looking statements in this release include statements regarding the Company's rights and benefits under the letters of intent with New Gold and Teck Cominco; the Company's future exploration and development plans; and the timing and nature of any future resource estimates, economic analyses or feasibility studies. 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 the forward-looking statements. Factors that could cause the 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. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the 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. These statements are based on a number of assumptions, including, among others, assumptions regarding general business and economic conditions, the ability of the Company and other relevant parties to satisfy stock exchange and other regulatory requirements in timely manner, the availability of financing for the Company's proposed transactions and exploration and development programs on reasonable terms and the ability of third-party service providers to deliver services in a timely manner.
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