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ORIENTAL MINERALS RECEIVES TITLE TO SANGDONG MINE AND COMPLETES FIRST DRILL HOLE TO 750 METRES
09:00 EST Friday, February 02, 2007
FSC / Press Release
ORIENTAL MINERALS RECEIVES TITLE TO SANGDONG MINE AND COMPLETES FIRST DRILL HOLE TO 750 METRES
Vancouver, British Columbia CANADA, February 02, 2007 /FSC/ - Oriental Minerals Inc. (OTL - TSX Venture, OZ4 - FWB), is pleased to announce that it has completed initial cash and share payments in exchange for transfer in South Korea's Mine Registration Office of the titles for the Sangdong mine. The National Instrument 43-101 Technical Report prepared by Watts Griffis Mcquat has been accepted for filing by the TSX Venture Exchange and has been posted on OTL's website as well as on SEDAR at www.sedar.com. At this time, the acquisition of the Sangdong Mine has not yet received final acceptance by the TSX Venture Exchange (TSX-V).
OTL is also pleased to announce that drillhole SD-01 has reached its target depth of 741 metres at the Sangdong tungsten-molybdenum mine, in pursuit of the reported historical tungsten and molybdenum resources. The hole was completed in 10 weeks and was sampled on a split core, one-metre-interval basis, with samples submitted to ALS Chemex Laboratory in Brisbane, Australia for analysis. Results are being received in installments and will begin to be announced shortly.
Previously, OTL announced that in addition to agreeing to acquire Sangdong, OTL has secured South Korea's largest (historically) producing gold mine (Muguk), and up to 22 additional tungsten-molybdenum and gold exploration projects (see October 26, 2006 press release). Closings of acquisition agreements are underway for purchase of the Gasado and Muguk gold mines and for the Chongyang molybdenum-tungsten mine. While OTL has received conditional approval of the TSX-V in respect of the Gasado, Muguk and Chongyang acquisitions, OTL has not yet received the final approval of the TSX-V.
Sangdong Drill Hole: One of the largest tungsten molybdenum mines in the world during 1947-1992, Sangdong had production rates of 600,000 tpa with bismuth by-product credits, mainly from the 6-metre thick Main Vein old workings. Drilling from 1980 to 1987 (described below) also reported a deep molybdenum deposit below the remaining tungsten resources.
Drill hole SD-01 is sequentially designed to test approximately 200 metres of Pungchon Limestone, 50 metres of tungsten-molybdenum-bismuth mineralized skarn altered Myobong Slate (including the 6-metre thick Main Vein), and 500 metres of Jangsan Quartzite, hosting stockwork molybdenum mineralization of the reported deep molybdenum deposit.
Drill hole SD-01 did intersect the old workings at 191.0-208.0 m (Hangingwall Vein) and again at 248.3-250.6 m (Main Vein), where drilling was delayed as these intersections were cemented-off so that drilling could then continue below the old workings toward the reported deep molybdenum deposit.
ABOUT SANGDONG:
- FORMERLY ONE OF THE WORLD'S LARGEST TUNGSTEN- MOLYBDENUM MINES.
As previously reported, the Sangdong Mining Titles cover the Sangdong tungsten-molybdenum mine, one of the largest in the world when it was prematurely closed in 1992 due to low metals prices. Tungsten prices have increased from US$4 per pound in 1992 to $70 per pound currently, while molybdenum prices have increased from less than US$2 per pound in 1992 to over $30 per pound now.
- REPORTED REMAINING TUNGSTEN RESOURCES
Approximately half of the identified historical tungsten resources are reported to remain with extensions of the mineralization to the east and to the west. The reported "remnant ore reserve" is estimated at 189 million lbs of WO3 from 15.6 million tonnes grading 0.5% WO3 in the "Main ore body" and 1.4 million tonnes at 0.55% WO3 in the "East ore body" (Investigation ore reserve of Sangdong Mine, March 1989, Korea Resources Corporation as quoted in Report on Sangdong Tungsten Mine in Korea, June 2001, Korea Engineering Co., Ltd.). Total strike length of known tungsten mineralization is at least 10 kilometres. Tungsten mineralization occurs as three individual stacked stratiform manto skarn horizons. Note that a qualified person has not done sufficient work to classify these historical "reserves" as current mineral "reserves". The issuer is not treating the historical estimates as current mineral resources and the historical estimates should not be relied upon. As the historically reported "reserve" is not yet accompanied by operating permits or positive economic modeling, the estimate should be considered as a historical resource.
- SURFACE SAMPLING AND ABOVE-GROUND ORE STOCKPILES
Results from sampling of surface exposures at Sangdong were announced by OTL on January 15, 2007; OTL considers the presence of silver-copper-tin-tungsten-bismuth-fluorine mineralisation at the base of the Pungchon limestone to be highly significant and not previously recognized by prior Sangdong operators.
The former mine stockpiles may represent attractive early development ore at current market prices. Trenching, bulk sampling and surveying of the mine stockpiles have been completed. A preliminary resource estimate report is being prepared.
- REPORTED MOLYBDENUM DEPOSIT
The molybdenum deposit reported beneath the existing tungsten mine workings was drill tested by KORES, the Korean government mining organization from 1980 to 1987. Drilling was carried out from the historical underground Tungsten mine workings, with 22 diamond holes completed.
Work undertaken by the Korea Engineering Co. in March 1989 estimated the deeper high grade molybdenum deposit at Sangdong contains a historical resource of 140 million pounds of molybdenum sulphide from 16 million tonnes grading 0.40% MoS2. (While previously the Company had implied a grade of 8.8 lbs MoS2 per tonne, the correct methodology would be to report 7.9 lbs per short ton). A historical global resource of 340 million pounds from 120 million tonnes grading 0.129% MoS2 (or 2.8 lbs MoS2 per tonne, or more correctly 2.6 lbs per short ton) is also reported. This unmined high grade historical molybdenum resource is hosted within quartz vein stockworks above a granite intrusion.
A qualified person has not done sufficient work to classify this historical resource as current mineral resources. The issuer is not treating the historical estimate as current mineral resources and the historical estimates should not be relied upon. These estimates are also subject to independent confirmation as to whether categorization is NI 43-101 compliant.
An extensive data base is still in process of review by and for OTL. The Company has a multi-pronged evaluation strategy at Sangdong, as follows:
- review the deeper high-grade molybdenum deposit.
- evaluating potential for early cash flow from the former operating mine ore stockpiles.
- consider remaining ore blocks in the tungsten mine workings for extraction.
- consider potential for open pit mining on existing tungsten-molybdenum resources.
- examine the significant exploration potential along strike.
SANGDONG ACQUISITION TERMS
The Sangdong Acquisition Agreement calls for the following:
a- US$80,000 upon signing (paid), US$8,000 November 8, 2006 (paid), and US$16,000 January 7, 2007 (paid).
b- US$720,000 cash (paid) and $US800,000 in Company stock issued at a deemed price of the then current 10 day market average upon closing transfer of title (now delivered to the vendor).
c- US$2.4 million cash and US$800,000 in Company stock issued at 6 months after (b); same amounts to be paid again 18 and 30 months after (b).
d- Spend US$800,000 in each of first and second years.
e- Spend US$2.4 million in each of years 3, 4 & 5, except spend at least US$16 million if undertaking commercial production.
f- Oriental is Operator of the project, earns 51% ownership interest and holds balance in trust commencing upon (b) above, 19% more by completing pre-feasibility within 5 years, and earns the final 30% by commencing a feasibility study during year 5 and completing the study within 18 months.
g- As consideration for the payments and share issuances noted in a-c above, the vendor shall provide Oriental with clear title to Sangdong free of all encumbrances in exchange for retaining a 2% net smelter return on all production from Sangdong.
FUTURE KOREAN EXPLORATION STRATEGY
A comprehensive exploration program is being initiated in South Korea involving:
- Continued acquisition of additional identified molybdenum-tungsten, gold-silver and copper-lead-zinc properties of high merit.
- Application for mining rights over large areas of a highly prospective base metal skarn belt.
- Mapping, sampling and delineation of drill targets on the acquired properties.
- Drill testing of acquired properties.
- Pre-feasibility studies on the Sangdong Mo deposit.
- Application for mining rights for uranium-thorium in the Ogchon belt
Oriental Minerals is benefiting from its utilization of technical staff seconded by the vendor, consultants such as Bob Skrzeczynski from Longview Technical and in-country geological expertise such as Mr. Kim Wanjoong (12 years experience) and Mr. Christopher Sennitt, OTL's Vice President-Exploration (26 years experience), both with specific South Korean expertise. Bob Skrzeczynski has particular expertise in tungsten from his involvement in the discovery of the Watershed Tungsten deposit in Australia with the former Utah Development Company and is the former Commercial Manager for BHP in the Australasian region.
The Company's Chairman, Damien Reynolds, reiterated that, "I am very excited that Oriental has capitalized on its current advantage as the only Western company involved in mineral exploration in Korea. The remaining resources at Sangdong represent an enormous opportunity for the Company, and we think there is considerable potential to add to the historical resource base at Sangdong, as well as at the other projects. We look forward to continuing working closely with the vendor, Mr. Jae Youl Sim to maximize the value of these projects."
QUALIFIED PERSON
The qualified person for the purposes of this release is Mr. Mark Dugmore.
On behalf of the Board of Directors,
Damien Reynolds
Director and Chairman
Contact: Anna Dalaire - Investor Relations
(604) 681-5755 adalaire@orientalminerals.com
www.orientalminerals.com
About Oriental Minerals Inc.
Oriental Minerals is a Canadian based exploration company exploring for world-class mineral deposits in South Korea. The Company's current projects include tungsten-molybdenum, base metals and gold-silver properties with significant known mineralization and excellent regional potential.
South Korea is an independent country with strong ties to the USA and a key trading partner with Canada and Australia. The country has an excellent infrastructure, established and workable Mining Laws, and available trained mining workforce.
These factors combined with an in country bi-lingual team, assists OTL in capturing a first class country-wide, diversified minerals portfolio.
Statements in this news release, other than purely historical information, including statements relating to the Company's future plans and objectives or expected results, constitute Forward-looking statements. Such statements are based on numerous assumptions and are subject to all the risks and uncertainties inherent in the Company's business, including risks related to mineral exploration and development. Consequently, actual results may vary materially from those described in the forward-looking statements.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
Source: Oriental Minerals Inc. (OTL - TSXV) www.orientalminerals.com
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Ph: (403) 717-3898 Fx: (403) 717-3896 www.usetdas.com
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