Perth, Aug 21, 2008 AEST (ABN Newswire) - Exco Resources Limited (ASX:EXS)(PINK:EXRSF) and Ivanhoe Australia Limited (Ivanhoe - ASX:IVA) entered into a Joint Venture (JV) agreement in May 2007 outlining joint venture terms over a number of Exco's tenements in the Soldiers Cap and Tringadee Project areas. The JV tenements (see Table 1) cover a total of ~560km2, and are contiguous with Ivanhoe's Cloncurry Project tenements in the Selwyn District.
- The Exco-Ivanhoe JV covers ~560km2 of tenements south of Cloncurry, contiguous with Ivanhoe's existing projects around the Selwyn District.
- Ivanhoe has met the expenditure commitments of the initial earn-in period and intends to continue with further exploration on the joint venture tenements.
- Ivanhoe can earn an 80% interest in the JV tenements by spending a total of A$5 million by May 2010.
Table 1: Lease areas included in the Exco-Ivanhoe Joint Venture
----------------------------------------------Lease Lease Name Sub-Blocks Area Km2----------------------------------------------EPM 11169 Garnet Creek 7 22.32EPM 11676 Mount Tracey 62 197.55EPM 12023 Back Creek 16 50.89EPM 12285 Saxby 2 6.38EPM 12290 Fairmile West 2 6.38EPM 13709 Pegmont South 11 34.93EPM 13741 Spell Paddock 35 111.13EPM 13770 Tringadee 3 9.52EPM 14033 Wewak 5 15.91EPM 14223 Killer Bore 11 34.94EPM 14434 Nora Creek 1 3.19EPM 14520 Willy's Bore 4 12.76EPMA 16177 Killer Bore North 15 47.66----------------------------------------------TOTALS 174 553.56----------------------------------------------
The joint venture comprised an initial option period, during which time Ivanhoe was required to spend a minimum of A$600,000. At the end of this option period Ivanhoe had exceeded the minimum spend and has confirmed its intention to continue with further exploration on the joint venture tenements. A total expenditure of A$5 million by May 2010 will earn Ivanhoe an 80% interest in the tenements.
SUMMARY & HIGHLIGHTS OF WORK COMPLETED TO DATE
EPM 11169 Garnet Creek
Work consisted of drilling 214 shallow aircore drill holes to between 5 and 92 metres. This program was designed to test basement and provide geochemical and geological information needed for further drill testing. The program has defined a 3 km long zone of potential sulphide mineralisation within the basement. This mineralisation takes the form of a large pyrite halo with a chalcopyrite core. This chalcopyrite core appears to be directly associated with a narrow, north-northwest trending magnetic feature. A 2 by 1.5 km Sub Audio Magnetics (SAM) survey was completed over the central area of the grid, defining a conductivity high coincident with this magnetic feature. Assays are pending.
EPM 11676 Mt Tracey
Work consisted of geological mapping and rock chip sampling of the Amethyst area. Best copper results from these samples were 5% Cu from gossanous veins (average result 0.16% Cu). The best gold results from the rock chip sampling were 30.6 g/t Au, also from a gossanous vein with strong boxworks (average Au result 0.64 g/t). Other work consisted of the preparation for a regional scale, helicopter supported stream sediment sampling program which is currently underway.
EPM 12023 Back Creek
Data on the Back Creek prospect was reviewed and a proposal to drill three deep vertical RC drill holes into the three main magnetic features was prepared. Local ground magnetic surveys were carried out in order to determine the depth of these magnetic features and to aid drill targeting.
EPM 12285 Saxby
Work conducted during the period consisted of reviews of previous data and limited rock chip sampling. Eleven rock chips samples were collected during a regional helicopter reconnaissance program. Best results were 0.14% Cu with 7.2 g/t Ag. A 50 m spaced ground magnetic grid was completed over the entire tenement with an aim to highlight magnetic features beneath the Cainozoic cover and aid in further drill targeting. A 250 m spaced grid of aircore drill holes were drilled over the entire tenement to obtain geochemical and geological data for further drill targeting. Assays are pending.
EPM 12290 Fairmile West
A 50 m spaced ground magnetic grid was completed over the entire tenement with an aim to highlight magnetic features beneath the Cainozoic cover and aid in further drill targeting. A 250 m spaced grid of aircore drill holes were drilled over the entire tenement to obtain geochemical and geological data for further drill targeting. Assays are pending.
EPM13709 Pegmont South
An aircore program has been designed to test for geochemistry above the prominent magnetic anomalies within the EPM.
EPM 14033 Wewak
Mapping and rock chip sampling covered the area around the Wewak pit and the ironstone at East Wewak. Two hundred and fifty-seven rock chip samples were collected. Best copper result was 18.7% Cu (average result 0.37% Cu). Best gold result was 8.21 g/t Au (average result 0.17 g/t Au). In April and May 2008 three diamond drill holes of a four hole program targeted shear hosted mineralisation at 100 m depth at the Wewak prospect. Drilling intersected only weak mineralisation at depth compared with the surface expression. It appears that mineralisation followed brittle extension which allowed for the mineralised fluid movement. Weak chalcopyrite was intersected outside of the shear zone in the northernmost drill hole (WWDH003) suggesting non shear-hosted mineralisation may be dipping north. Though visible mineralisation appears weak, the shear zones may host chalcocite as at Mount Dore and the significant pyrite may host gold which is elevated in the surface rock chips. Assay results have not been returned. Drilling of the fourth deeper hole has been deferred pending the assay results.
EPM14223 Killer Bore
A 100 drill hole aircore program has begun on EPM 14223. This program is designed to test basement for mineralisation over the subtle magnetic feature beneath Mesozoic cover. The program is expected to be completed in late August. Initial assays are pending.
EPM 14520 Willy's Bore
The tenement was mapped using ASTER imagery and a ferric iron signature identified. This anomaly was visited during a regional helicopter survey and nine rock chip samples were collected. These samples were collected from dolerites, breccias and gossanous horizons. Best copper results were 0.09% Cu (average result 0.04% Cu). Best results for gold were 0.02 g/t Au (average result below detection limit). The gossanous samples had anomalous cobalt with 611 ppm the best assay returned. Exco looks forward to the ongoing working relationship with Ivanhoe, and to keeping shareholders informed of joint venture activities.
Information on Exco Resources
Exco is an Australian focused ASX-listed mining company (ASX: EXS) with a clear focus on developing the Cloncurry Copper Project (CCP) in north-west Queensland, where the Company holds a large (>4,100km2), strategically located and highly prospective land package.
The CCP comprises numerous tenements and mining leases, which host the flagship E1 Camp, Monakoff and Great Australia deposits. Resources delineated for the project to date total 35.8 Mt of ore, containing 332,500 tonnes of copper and 287,100 ounces of gold, with further exploration underway and indicated resource development nearing completion.
Exco recently completed a Pre-Feasibility Study (PFS) on the CCP, which demonstrated the technical and commercial credentials of a 2Mtpa project. Encouraged by the positive PFS results, and with ongoing drilling expected to deliver further resource upgrades in the short term, the Company has commenced a Definitive Feasibility Study (DFS) on a slightly larger operation treating 2.5 to 3Mtpa through a concentrator facility located at the E1 Camp. At this expanded throughput the project will produce >25,000 tonnes of copper in concentrate per annum (25% more than envisaged by the PFS) with substantial by-product credits from gold, cobalt, magnetite and potentially uranium.
The Company expects to complete the DFS in early 2009 and is targeting first production by late 2010 with a view to capitalising on sustained copper demand, projected supply gaps and the positive forward price outlook for copper and the project's various by-products.
Exco also has a number of exploration joint ventures in Queensland with major companies including Xstrata, BHP Billiton and Ivanhoe Mines. These JVs are managed by Exco's partners, creating additional development options, and allowing the Company to maintain its primary focus on the CCP.
In South Australia Exco has entered into an agreement with Polymetals Group Pty Ltd for their acquisition of a 50% interest in the White Dam Gold Project, which contains a resource inventory of 330,400 ounces of gold. Subject to final approvals being obtained, the parties anticipate that the project can commence construction in late 2008, with first gold production scheduled by mid 2009. Exco's share of prospective cash flows from White Dam will ultimately assist in expediting development of the Cloncurry Copper Project.
The Board of Exco, backed by the Company's major shareholders including Ivanhoe Mines, the Lion Selection Group and management, are committed to unlocking value from this highly prospective portfolio of projects, and looks forward to keeping shareholders informed of developments.
Further information is available at www.excoresources.com.au
Information in this report relating to exploration results is based on data compiled by Ivanhoe Australia Limited's Exploration Manager Mr Paul Carter, BSc Hons Geo., who is a member of The South African Council for Natural Scientific Professions. Mr Carter has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons under the 2004 Edition of the Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Carter consents to the inclusion of the data in the form and context in which it appears.
Contact
Exco Resources Ltd +61 8 9211 2000
Michael Anderson (Managing Director)
Geoff Laing (GM: Corporate & Project Development)
Fox-Davies Capital +44 207 936 5200
Daniel Fox-Davies (Managing Director)
Peter Rose (Head of Mining Research)
Richard Hail (Head of Corporate Finance)
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