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New Destiny Enters Into MOU to Option Cerro Blanco Property, Argentina
By: Marketwire .
Nov. 5, 2012 01:22 PM
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 11/05/12 -- New Destiny Mining Corp. (TSX VENTURE:NED) (the "Company" or "New Destiny") reports that it has entered into a memorandum of understanding ("MOU") with Argentina Mining Ltd. ("AVK"), an ASX listed company, its wholly-owned subsidiary, and the underlying property owner ("Owner"), wherein the parties have agreed that they will conduct exclusive negotiations for New Destiny to acquire the exclusive option to purchase an undivided 60% interest (the "Option") in seven exploration concessions in Argentina, known as the Cerro Blanco Property, comprising an area of 12,830 hectares, more or less (the "Property"). The Property is subject to an 8.75% interest retained by the Owner. Under the MOU, the Company will have until January 31, 2013 to conduct due diligence investigations on the Property and to enter into a definitive agreement (the "Formal Contract") with the other parties, upon the terms set out in the MOU. The Company may extend the exclusivity period from January 31, 2013, until March 1, 2103 by electing to pay USD $50,000 to AVK.
To exercise the Option to acquire a 60% interest in the Property, the MOU contemplates that New Destiny must complete USD$2 million in drilling-based exploration on the Property, being $500,000 within 12 months of the Execution Date and a further $1.5 million within 24 months of the Execution Date.
In addition, New Destiny will pay AVK USD$300,000 ($100,000 on signing the Formal Contract (the "Execution Date"), and two further installments of $100,000 every six months thereafter) and, upon regulatory approval, issue AVK the number of common shares equal to 12.5% of the total issued shares of the Company following completion of the necessary capital raising to fund the exercise of the Option.
The Company has also agreed to assume all of AVK's remaining underlying property payments to Owner, totaling USD $150,000, and payable in annual installments of $50,000 each December 31 until December 31, 2014, with the next installment being due on December 31, 2012. The Company will also assume responsibility for the payment to Owner of USD $200,000, upon making a decision to commence a bankable feasibility study (the "BFS").
Upon New Destiny acquiring a 60% interest in the Property, the parties will enter into a joint venture agreement for further exploration and development of the Property, with each holding their respective joint venture interests (New Destiny 60%, AVK 31.25%, and Owner 8.75%). Subject to the following, each party will contribute towards the ongoing costs in proportion to their joint venture interests. Prior to or upon the decision to commence the BFS, AVK may elect to not contribute its share of joint venture costs, in which case its 31.25% interest will convert to a 10% free carried interest ("FCI") until a decision is made to enter into commercial production (the "Production Decision"). The Owner may also elect to not contribute its share of joint venture costs prior or upon the decision to commence the BFS, then the Company will have the right of first refusal to acquire the Owner's 8.75% interest for USD $1 million, increasing New Destiny's interest to either 68.75% or 90%, if AVK has elected to convert its interest to a 10% FCI. In addition, in the event of the buy-out of Owner's 8.75% interest, Owner is entitled to a 1.5% net smelter returns royalty.
At the time of a Production Decision, AVK will either be entitled to: (i) a 31.25% participating joint venture interest where it has elected to contribute its share of all costs, or (ii) a 10% FCI if it has not. If a Production Decision is made and AVK holds a 10% FCI, then AVK may elect not to contribute towards the mine development and construction costs, and it's 10% FCI will convert to a 1% net smelter returns royalty.
Any Formal Contract will also be subject to certain conditions precedent, including third party consents or waivers, and regulatory acceptance.
"The opportunity to bring on a world class asset in the mining friendly jurisdiction of San Juan runs correlates to the corporate strategy of New Destiny of finding high value mineral rich assets in Argentina", stated Rob Birmingham, President of New Destiny Mining Corp. "We look forward to completing our due diligence as we build our relationship with Argentina Mining Ltd."
About the Cerro Blanco Property:
The 12,830 Ha Cerro Blanco Property is located in the Argentinian Pre-Cordillera of the San Juan Province, about 35 km SSW of the town of Barreal. The geology of the Cerro Blanco Property is dominated by folded Carboniferous shales, schists and other sedimentary rocks later intruded or covered by Permo-Triassic granitoids and volcanic rocks. The intrusion of Tertiary porphyry dacitic stocks lead to widespread hydrothermal alteration, leaching and Cu-Au+/-Mo mineralization, typical of poprphyry copper-type deposits. Late to Post-Tertiary dacitic tuffs overlie the volcano-plutonic assemblages. The main exploration target is a near-circular assemblage, 1.2 km in diameter, of pervasively hydrothermally altered dacitic porphyry stocks exposing secondary copper mineralization related to weathering, supergene alteration and faulting.
The Cerro Blanco Property features all the important geological, geochemical and geophysical characteristics that may lead to the exploitation of a world class porphyry copper-type deposit : a) deep primary mineralization containing abundant pyrite and chalcopyrite, b) a 20 m copper-gold mineralized leached cap, c) a 20 m zone of copper oxides (malachite, chrysocolla, turquoise and azurite) which at greater depth shows supergene sulphide enrichment, d) widespread phyllic quartz-sericite alteration interfacing with abundant potassic alteration associated mainly with sulphide-rich veins and veinlets which often form stockworks, e) disseminated bornite accompanied by chalcocite and covellite in addition to pyrite and chalcopyrite, especially at the phyllic/potassic interface and, f) late kaolin alunite (argillic) alteration.
Recent exploration work conducted by AVK in 2011 included ground-based geophysical surveys (Mag and IP), rock and soil sampling accompanied by an exploratory drilling program. High grade intersections obtained from the 2011 drillcore include: 102.5 m @ 0.18 wt. % copper, 0.06 g/t Au and 65 ppm Mo (DDH MC-1), 108 m @ 0.20 wt. % copper, 0.08 g/t Au and 95 ppm Mo (DDH MC-3) and 20 m @ 0.47 wt. % copper, 0.21 g/t Au and 244 ppm Mo (DDH MC-4). The Mag survey revealed high- magnetic broadly annular shape zones typical of zoned porphyry copper deposits and associated with sulphide mineralized intersects in the 2011 diamond drill cores. The IP survey defined a 1.5 x 0.9 km ovoid-shaped high chargeability zone centered on Cerro Blanco and interpreted as the signature of sulphide-rich zones.
In connection with the sub-option agreement, the Company has also agreed to pay an arm's length finder a finder's fee equal to 1,410,000 common shares. The finder's shares will also be subject to a hold period of 4 months and a day from their date of issuance.
New Destiny Mining would also like to announce that Mr. Michael Dake has resigned, effective immediately from his position on the Board of Directors. New Destiny wishes to thank Mr. Dake for his contribution to the development of the Company.
The technical information contained in this press release has been reviewed and verified by Michel Boily, PhD., P. Geo., a "qualified person" as defined under NI 43-101.
About Argentina Mining Limited:
Argentina Mining Limited listed on ASX on 9 March 2011. The Company is exploring a suite of gold and base metal projects in San Juan Province, Argentina. These projects range from the established porphyry copper-gold-molybdenum project at Cerro Blanco, epithermal vein gold and copper mineralisation at Amiches, San Francisco and regional exploration projects near Barrick Gold Corporation's major Veladero (Reserves 12Moz Au) and Pascua-Lama (Reserves 17.8Moz) gold operations.
The Company's first five diamond core-holes drilled in two phases in 2011 at the Copper Hill Prospect at Cerro Blanco intersected broad zones of porphyry copper-gold-molybdenum mineralisation which, supported by results from geophysical Ground IP-Res and Magnetics surveys, confirm the presence of a large mineralised porphyry sulphide and oxide system.
ON BEHALF OF THE BOARD OF DIRECTORS
Rob Birmingham, President and CEO
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this release.
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