Southwestern and Vale Sign Option Agreement for Antay Project
Southwestern Resources Corp. (TSX: SWG) (“Southwestern” or the “Company”) is pleased to announce that its wholly owned subsidiary has entered into an option agreement (the “Agreement”) with Vale Exploration Peru S.A.C., a subsidiary of Companhia Vale do Rio Doce (“Vale”), respecting Southwestern’s 100% owned Antay copper-molybdenum project, located in southern Peru.
Under the terms of the Agreement, Vale has the option to earn a 51% interest in the Antay Project by making cash payments totaling US$1.35 million, completing a total of 13,500 metres of diamond drilling (including 3,000 metres in the first year) and completing a scoping study over a three-year period (the “Option”). Vale will have the additional right to earn a further 9% interest by funding and completing a bankable feasibility study within two years of exercising the Option (the “Additional Option Period”). Vale may elect to extend the Additional Option Period by 12 months by paying Southwestern US$1 million.
In addition, within two years of delivering a bankable feasibility study, Vale will have the further option to make a binding, all cash offer to acquire Southwestern’s remaining 40% interest within 90 days of Vale’s decision to construct a mine, at which point Southwestern will have 120 days to accept Vale’s offer, or to negotiate a better all cash offer from a third party.
The 31,000 hectare Antay Project is situated within the Bambas-Tintaya Porphyry Belt and is accessible by road from Cuzco, 150 kilometres to the northeast. The Sayta Porphyry, which is situated in the northern section of the Antay Project, is a large porphyry system exposed over 1.5 kilometres and consists of multi-phase porphyritic intrusions, sheeted and stock-work quartz vein zones and hydrothermal breccia bodies. Work carried out by Southwestern in 2008 included mapping, sampling and geophysical surveying and it has recently commenced a 2,400 metre drilling program.
Timo Jauristo, the Company’s Interim President and CEO, commented that: “We look forward to working with Vale to advance the Antay Project. Vale’s position as one of the largest mining companies in the world, as well as its presence in South America, will provide us with invaluable expertise respecting exploration of the Antay Project. This Agreement, along with our previously announced joint ventures, has put the Company in a strong position to advance its Peruvian projects with the assistance of prominent mining partners.”
Vale is the second-largest metals and mining company in the world and the largest in the Americas, based on market capitalization. It is the world’s largest producer of iron ore and iron ore pellets, the world’s second-largest producer of nickel and one of the world’s largest producers of manganese ore and ferroalloys. Vale also produces bauxite, alumina, aluminium, copper, coal, cobalt, precious metals, potash and other products. To support its growth strategy, Vale is actively engaged in mineral exploration efforts in 21 countries around the globe. Vale operates large logistics systems in Brazil, including railroads, maritime terminals and a port, which are integrated with its mining operations. Directly and through affiliates and joint ventures, Vale has investments in the energy and steel businesses.
Southwestern is a Vancouver-based mineral exploration company engaged in the identification, acquisition, evaluation and exploration of gold, silver and base metals mineral properties. The Company has a number of significant projects, including the Liam gold-silver project in Peru with Hochschild Mining. Southwestern is a reporting issuer in British Columbia, Alberta, Manitoba, and Ontario and trades on the Toronto Stock Exchange under the symbol SWG.
Statements in this news release that are forward-looking statements are based on the current expectations, beliefs, assumptions, estimates and forecasts about the Company’s business and the industry and markets in which it operates. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements due to a number of factors, including but not limited to, the Company’s access to additional capital to fund future activities, the loss of mineral properties or the inability to obtain mining licenses, the inherently risky nature of the Company’s activities and its lack of experience in bringing an exploration property into production, its ability to repatriate any earnings, foreign exchange fluctuations, the political stability and economic uncertainty of those areas in which the Company carries on operations and the lack of infrastructure in those areas, title risks, the risks and uncertainties associated with joint ventures and the Company’s reliance on third parties, statutory and regulatory compliance, the adequacy and availability of insurance coverage, the Company’s dependence upon employees and consultants and fluctuations in mineral prices and other risks detailed in the Company’s filings with the Canadian Securities Authorities.
These risks, as well as others, could cause actual results and events to vary significantly. The Company expressly disclaims any intent or obligation to update these forward-looking statements, unless the Company specifically states otherwise.
Contacts: Southwestern Resources Corp. Timo Jauristo Interim President & CEO (604) 669-2525 Southwestern Resources Corp. David Black Chair of the Board (604) 669-2525
SOURCE: Southwestern Resources Corp.