|September 14, 2010|
Indico Signs Agreement to Acquire the Ocaña Copper Gold Porphyry Project, Southern Peru
|Announces Non-Brokered Private Placement for Gross Proceeds up to $4,000,000|
FOR IMMEDIATE RELEASE... Vancouver, British Columbia - Indico Resources Ltd. ("Indico" or the "Company") (TSX-V: IDI) is pleased to announce, that it has entered into an agreement with Manlio Bassino Pinasco and Percy Samaniego Pimentel of Lima Peru (the "Vendors") wherein Indico has been granted the exclusive option to acquire a 100% indirect interest in the Ocaña Copper Gold Porphyry Project, in South-Central Peru (the "Transaction"). The Ocaña property consists of 22 concessions covering 110.24 km2 and is located on the northwest extension of the Southern Peru Porphyry Copper Belt, a trend defined in part by the Toquepala, Quellavaca, Cuajone, and Cerro Verde Mines to the southeast (Figure 1). Recent exploration of the belt has resulted in discovery of the Zafranal copper porphyry deposit, located approximately 75 km to the southeast of the Ocaña Project.
The Ocaña property targets an approximately 110 square kilometre area with widespread color alteration anomalies typical of large porphyry copper-gold systems. Rock types, alteration and quartz veining on the property is consistent with the model.
Figure 1. Regional map of southern Peru showing main geologic components - pink colour represents intrusive rocks of the Coastal Batholith. Deposits: T- Toquepala; Q - Quellavaca; C - Cuajone; CV - Cerro Verde; CN - Cerro Negro; Z - Zafranal; C - Canama.
Geology & Target Type
The Southern Peru Porphyry Copper Belt hosts the large porphyry copper deposits of Toquepala (770 million tonnes at 0.74% copper), Quellaveco (213 million tonnes @ 0.94% copper & 761 million tonnes @ 0.57% copper), Cuajone (61 million tonnes @ 0.56% copper & 1,212 million tonnes @ 0.64% copper), Cerro Verde (1,000 million tonnes @ 0.51% copper), and Cerro Negro (64 million tonnes @ 0.56% copper) as well as the newly discovered Zafranal porphyry system. The technical information with respect to the above deposits was obtained through the respective company's public disclosure documents and on SEDAR.
The Ocaña Project is underlain by Precambrian basement rocks intruded by multi-phase plutonic complex of the Coast Batholith. These permissive intrusive rocks are not identified on existing published geologic maps and have been identified through field investigation.
Alteration consists of widespread 'proximal' potassic (K-spar--magnetite) and silica alteration near the center of the system grading outward to sodic--calcic (chlorite--epidote--calcite) 'propylitic' alteration over a radial distance of 4 to 8 km. Gold-bearing quartz veins in the periphery of this new porphyry district are currently being mined by artisanal miners. The operating Arirahua Gold Mine is located 7 kilometres west of the project.
Planned Work Program
Indico intends to rapidly advance the property to the drill stage. The exploration program will include detailed geological, structural and alteration mapping in tandem with detailed geochemcial sampling and trenching.
A ground magnetic survey is current being designed to target observed northwest-trending magnetite bearing veins and silicified zones. This will help identify structural fabric and map magnetic intrusions and/or magnetite alteration. An Induced Polarization (IP) survey is also planned to define zones of sulphide mineralization.
A budget of $3M is proposed for Year 1, which will take the project from the surface exploration phase through to Phase I drilling.
Terms of the Agreement
The Ocaña property is currently owned by three Peruvian companies: Minera Andina de Explorationes S.A.A., Mines Representaciones S.A.C. and S.M.R.L. Rosita No. 1 de Arequipa. Each of the owners has entered into a mining assignment and option agreement with Inversiones Minerales S.A.C. ("Inversiones") granting Inversiones the exclusive the right to acquire a 100% interest in the Ocaña property.
Pursuant to the Agreement the Vendors, being all of the shareholders of Inversiones, have granted Indico the exclusive option to acquire all of the issued and outstanding shares of Inversiones by Indico making, at its option, payments of escalating cash and shares over a 5 year period ending April 20, 2015. The total transfer price is US$ 17.75M and 8.5M shares of Indico with the majority ($15.49 M and 6.5M shares) being payable in year 5. There are no exploration expenditure commitments and no finder's fee are payable in connection with the Transaction.
The schedule of payments is as follows:
Indico announces its intention to complete a non-brokered private placement consisting of the issuance of up to 10,000,000 units of Indico at a price of C$0.40 per unit, for gross proceeds of up to C$4,000,000 (the "Private Placement"). Each unit will comprise one common share and one half common share purchase warrant of Indico. Each whole warrant will entitle the holder to purchase one additional common share of Indico at a price of $0.60 for a period of one year subject to the Indico's right to accelerate the exercise of the warrants if the closing price of the Indico's shares on the TSX-V is equal to or exceeds C$1 per share for a period of 20 consecutive trading days between 4 months and a day from date of issue of the warrants and the date of expiry of the warrants.
The Company has agreed to allocate a portion of the Offering to subscribers found by Axemen Resource Capital Ltd. ("Axemen"), an exempt market dealer, and may agree to similar allocations to other exempt market or investment dealers. The Company will pay finder's fees equal to 5% of subscription amounts received, payable in cash or units, plus issuer finder's warrant exercisable into one common share of the Company at a price of $0.65 for 12 months from closing.
The proceeds of the Private Placement will be used to undertake the proposed work program on the property, initial payments to the Vendors and for general working capital purposes.
Conditions to Closing
The closing of the Transaction will be subject to, among others, the following conditions precedent:
EurGeol Keith J. Henderson, P.Geo., Indico's Chief Scientific Officer, a Director, and a qualified person as defined by National Instrument 43-101, has reviewed the scientific and technical information that forms the basis for this news release. Mr. Henderson is not independent of the Company as he is an officer and a shareholder.
About Indico Resources Ltd.
Indico Resources Ltd. is a Canadian exploration company focussed on the resource sector in South America. The Ocaña Porphyry Project is the Company's primary exploration project and the main focus of exploration activities.
For further details on the Company, readers are referred to the Canadian regulatory filing on SEDAR at www.sedar.com.
ON BEHALF OF THE BOARD OF DIRECTORS
INDICO RESOURCES LTD.
Gary Freeman, President & CEO
Neither 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.
This press release contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward looking information" within the meaning of the British Columbia Securities Act and the Alberta Securities Act. Generally, the words "expect", "intend", "estimate", "will" and similar expressions identify forward-looking information. By their very nature, forward-looking statements are subject to known and unknown risks and uncertainties that may cause our actual results, performance or achievements, or that of our industry, to differ materially from those expressed or implied in any of our forward looking information. Statements in this press release regarding Indico's business or proposed business, which are not historical facts are forward-looking information that involve risks and uncertainties, such as estimates and statements that describe Indico's future plans, objectives or goals, including words to the effect that Indico or management expects a stated condition or result to occur. Since forward-looking statements address events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. All of the Company's Canadian public disclosure filings may be accessed via www.sedar.com and readers are urged to review these materials, including the technical reports filed with respect to the Company's mineral properties. The foregoing commentary is based on the beliefs, expectations and opinions of management on the date the statements are made. The Company disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise.
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