|November 05, 2009|
Geologix Acquires Right To Purchase 100% Interest In The Tepal Gold-Copper Project, Mexico
|Vancouver, B.C., November 5, 2009 - Geologix Explorations Inc. (the "Company" or "Geologix") is pleased to announce it has entered into an agreement with Arian Silver Corp. ("Arian") whereby Geologix has been granted the exclusive rights to purchase Arian's 100% interest in the Tepal Gold-Copper Project in the state of Michoacán, Mexico.|
The Tepal project hosts a resource estimated at 1.15 million ounces ("ozs") gold and 413 million pounds ("lbs") copper (see details below). Under the terms of the agreement, Geologix can elect to complete the purchase of 100% of the property, subject to a 2.5% net smelter return royalty, by delivering to Arian US$3.0 million in staged payments before February 23, 2011 (at Geologix's election, up to 50% payable in Geologix shares), and assuming the balance of Arian's obligations under the terms of the underlying property option agreement.
Dunham Craig, President & CEO stated, "We are excited to have the opportunity to acquire the Tepal Project as it represents an advanced stage Mexican project, with extensive prior drilling, a significant current resource estimation, and multiple exploration targets for possible expansion. The Tepal Project meets the Company's preferred project criteria on multiple levels and fits well with management's exploration and development expertise. In a collaborative effort with Arian, the Company is currently conducting a property scale geophysical (IP) survey and metallurgical test program."
The Tepal Project:
The Tepal Project is located in the northwest portion of Michoacán State, Mexico. Local and regional infrastructure is excellent, with paved roads, deep sea port access, and low topographical relief. The project is comprised of 6 concessions covering approximately 138 square kilometres.
A report on Tepal prepared by ACA Howe International Ltd. has estimated the property resources as of September 24, 2008 as tabulated below:
The estimate is based upon 92 drill holes and utilizes a 0.18 g/t Au envelope that honours geology to constrain the mineralization. An inverse distance method was used to the power of (ID3) to interpolate into 25 x 25 x 20 metre blocks using Micromine software. It is reported using a 0 g/t Au cut off. To the Company's knowledge, such resources will not be materially affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues. The known resource remains open for possible expansion in multiple directions and numerous highly prospective targets remain untested throughout the project area.
The project has a total of 129 drill holes (62 diamond drill and 67 reverse circulation) totalling 20,121 metres which led to the identification of two main mineralized zones, the North Zone and the South Zone, which host the current resource estimate. In addition, surface geochemical surveys throughout much of the project area indicate numerous highly prospective untested gold and copper anomalies; most notably to the east of the current deposits (see geochemical maps on the Company's website).
Upon successful completion of the Company's due diligence, management intends to initiate a program of trenching, sampling and drill target delineation in advance of a next phase drill program expected to test new target areas and upgrade the current resource.
Terms of the Purchase Transaction:
Under the agreement Geologix has advanced to Arian US$517,500 which has been used by Arian to complete an outstanding underlying option payment due to the property vendor (US$450,000 plus the applicable IVA (value added tax) of US$67,500). The advance was made by Geologix to Arian as an interest free loan repayable on April 23, 2010 unless Geologix elects to option the property, in which case the loan will be applied against the purchase price.
In consideration for the loan, Arian has granted Geologix a five month exclusivity period during which Geologix shall undertake a due diligence review of the property. Following completion of its due diligence review and before the end of the five months, Geologix may elect to acquire the property from Arian on an option basis for US$3-million, payable to Arian in two instalments:
Geologix will also assume the balance of Arian's obligations under the terms of an underlying property option agreement whereby Geologix will be responsible for completing staged payments to the underlying property vendor (as previously disclosed by Arian Silver Corp.). The Tepal claims are subject to a 2.5% net smelter return ("NSR") to the underlying vendor.
If Geologix elects not to acquire the property, Arian must repay the initial advance (including the IVA, if not already repaid) to Geologix no later than April 23, 2010, and Geologix's interest in the property will terminate. If Arian fails to repay the advance Geologix may elect to either:
Geologix Explorations Inc. is a mineral exploration company focused on acquiring, exploring and developing mineral properties in North and South America.
For further information contact:
V.P. Corporate Communications
Phone: (604) 694-1742
Toll Free in Canada and USA:
1 (888) 694-1742
President & CEO
Phone: (604) 694-1742
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
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