Tirex Resources (TSX VENTURE: TXX) -
-- Ekin Maden is Turkey's leading non-ferrous metals and minerals trading
company since 1982 with significant mining and processing experience in
Albania
-- mining partnership to focus on six deposit areas of the Mirdita District
while Tirex continues exploration targeting discovery in other areas of
property
-- arrangement allows Tirex to move into copper and gold production with
zero share dilution
Tirex Resources ("Tirex") is pleased to announce it has signed a
Definitive Agreement ("the Agreement") with Ekin Maden Tic. Ve San.
A.S. ("Ekin Maden") to commence commercial production of copper and
gold from six areas of the Mirdita District located in Albania. The
Agreement allows Tirex to target significant cash flow through a
quick transition into commercial production, without any
corresponding share dilution relating to the financing of capital
and operating expenditures.
The Agreement stipulates that Tirex will contribute six
historically known mineral deposits to a newly formed operating
company ("OpCo") in which Tirex and Ekin Maden will each hold an
indirect 50 percent interest. OpCo will be managed by a technical
team within Albania under the leadership of a Board of Directors
that has equal representation from both Tirex and Ekin Maden.
Funding of the Initial Phase and the Second Phase of development,
as set out below, will be pursuant to approval of programs and
budgets, with deadlock resolution by an independent Expert.
Key details of the Agreement are outlined below:
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Tirex Ekin Maden
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Contribution 6 Deposit Areas: Tuc, Paluca, 500 tpd mill capacity
to OpCo Qaf Bari, Letitna, Gurthi- (150,000 t/y)
Koshaj, and Fushe Arres Finance of:
Mine development capital
Operating capital
Mining equipment
Possibly new OpCo processing
facilities and all expansions
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Receives via 50% of net ore value less 50% of net ore value less
OpCo mining, processing and sales mining, processing and sales
cost cost
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Other Protection from cash calls for Receives a portion of
24 months through capital and concentrate as compensation
operating loan by Ekin Maden for processing and sales
to Opco services
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Ekin Maden will finance mine development capital, operating
capital and mining equipment as well as contribute the mill
capacity required by OpCo to commence production and sales. This
mill capacity is made available to OpCo via Ekin Maden's existing
mill and flotation plant complex located in Fushe Arres, owned by
BERALB SH A., an affiliate of Ekin Maden, which has recently
completed a major capacity expansion.
Under the terms of the Agreement, Tirex will transfer the six
properties to OpCo and Ekin Maden will fund the capital and
operating costs of reaching production. The initial six deposit
areas targeted for production are Tuc, Paluca, Qaf Bari, Letitna,
Gurthi-Koshaj and Fushe Arres.
The Agreement has been structured to expedite OpCo commencing
production through a multi-stage process as follows:
Initial Phase of Production
Ekin Maden will fund the capital (and, if needed 24 months
operating) costs of the Initial Phase in which OpCo will target to
develop 500 tonnes production of ore per day. Ekin Maden, through
BERALB, will perform ore processing and sales agency for OpCo.
The mill capacity required for the Initial Phase is in place and
fully constructed and operational. This capacity will be dedicated
for the use of OpCo under the terms of an Ore Processing Agreement
and Sales Agency agreement between BERALB and OpCo. BERALB is
entitled to a portion of the produced concentrate as compensation
for processing and sales services. OpCo will receive the gross
proceeds of the remaining concentrate sales less all repayment of
any operating loan advances from Ekin Maden and the costs of
production and sales.
OpCo will not be responsible for the repayment of any of the
capital expenditures incurred by Ekin Maden to date relating to the
construction of the BERALB mill. A maximum of 25% of OpCo net
profits are earmarked to pay mine capital expenditure debt financed
by Ekin Maden, in respect of the Initial Phase, with the balance
being paid in 24 months of first ore delivery to BERALB.
Potential Growth (Second Phase)
Under the terms of the Agreement, OpCo will then enter into its
second phase, targeting production of at least an additional 500
tonnes per day. The ore processing and sales agency arrangement
will remain in place. Tirex (through OpCo) will participate in the
ownership of any new OpCo processing facilities constructed to
service the Second Phase production while Ekin Maden will have the
obligation to fund or arrange financing for the construction of
such facilities, if required. It is anticipated that future
expansion of mill facilities would be required if OpCo's production
profile exceeds 2000 tonnes per day, as targeted.
If expanded mill capacity is required under the Second Phase,
then OpCo will have the option to participate in the profitability
of the milling and processing of ore through direct processing
facility ownership over and above the profitability targeted as
miners during the Initial Phase.
Tirex Chief Executive Officer, Bryan Slusarchuk, states, "Tirex
is forging ahead in this unique opportunity to create a substantial
copper and gold production profile with no corresponding
shareholder dilution. As we grow the cash flow from our mining
operations, we will continue to concurrently target the discovery
of new economic ore bodies within the Mirdita District. We are
proud to be working with Ekin Maden within the production process,
a company with an outstanding track record as Turkey's leading
non-ferrous metals trading group with well established mining
interests in Albania."
Ekin Maden Chief Executive Officer, Erol Kohen, states, "Ekin
Maden looks forward to creating a significant mining partnership
with Tirex Resources on these deposits within the Mirdita District
in Albania. The new OpCo will work to the highest international
standards while creating significant benefits for the local
communities, the country and stakeholders."
The Agreement is subject to regulatory and European Bank of
Reconstruction and Development approval.
Tirex Deposits
Current on-site assessment work is taking place at Fushe Arres,
Tuc and Qaf Bari. While Tirex has not drilled these areas, the
deposits are of significant interest due to past historical work
and the existence of underground mine workings. According to early
1970s resource estimates (not National Instrument 43-101 ("NI
43-101") compliant) by the Albanian Geological Survey (AGS), the
deposits at Fushe Arres totals 1,115,600 tons of 1.04% Cu, within
which is a 267,000 tons zone near surface of 2.77% Cu, Qaf Bari
totals 445,700 tons of 2.07% Cu and Tuc totals 2,072,000 tons of
1.54% Cu. It is the belief of the Tirex technical team, who now
have more than 5 years of onsite experience drilling four separate
areas within the District, that the Fushe Arres, Qaf Bari and Tuc
deposit areas have room for significant expansion and importantly
are prospective for precious metal exploitation. Tirex's advanced
stage drilling at Koshaj, Gurthi and Letitna where thick zones of
copper, zinc, gold and silver rich volcanogenic massive sulphide
mineralization were encountered, has demonstrated that often
historical deposit reports either omit or do not recognize gold,
silver and zinc mineralization, having dominantly focussed on
copper.
The early 1970's historical AGS calculations classify the
deposit resources in a combination of C1 & C2 categories, being
based on the Russian deposit reporting system and are roughly
equivalent to the NI 43-101 inferred and indicated categories.
These historical resources are not compliant with NI 43-101 and
should not be relied upon. A qualified person within the meaning of
NI 43-101 has not done sufficient work to classify the historical
estimate as current mineral resources or reserves and additional
work will be required to upgrade or verify the historical
estimates. Tirex is not treating the historical estimates as
current mineral resources or reserves but considers them important
as a guide for future work in the District.
Modern Mining in Mirdita District
Ekin Maden is the only modern miner in the Mirdita VMS District
of Albania, with current production at the Lak Roshi and Munelle
deposits. Both Lak Roshi and Munelle were in production during
Albania's communist era as were many of the deposits on Tirex's
ground. Lak Roshi, Munelle and the six deposits being contributed
by Tirex to the joint venture are Kuroko type VMS deposits with
comparable copper and zinc grades.
About Ekin Maden Tic. Ve San. A.S.
Ekin Maden is a well-established, respected and privately held
mining company whose principals have extensive expertise and
experience in mining, metals trading and operations. Ekin Maden is
the owner of the largest copper mine in Albania, namely BERALB SH.
A. Ekin Maden was established in 1982 and is a leading Turkish
company involved in lead, zinc, copper and chrome ore exporting,
the importing of lead, zinc, aluminum metals and copper cathodes,
mining, and mine finance. The annual turnover of Ekin Maden
companies is approximately $1,000,000,000 USD.
John Nicholson, P.Geo., Mirdita Project Manager and a Qualified
Person under the meaning of Canadian National Instrument 43-101, is
responsible for the technical content of this news release.
Further details on Tirex Resources Ltd. and the Mirdita Project
can be found on the Tirex website at www.TirexResources.com.
ON BEHALF OF TIREX RESOURCES LTD.
Bryan J.R. Slusarchuk, CEO and Director
Forward-Looking Statements. This Tirex News Release may contain
certain "forward-looking" statements and information relating to
Tirex. Such statements include but are not limited to statements
about the Agreement, the production arrangements and the timing of
the mine development, mill construction and ore production. Often
forward-looking statements or information include words such as
"plans", expects", "intends", "anticipates", "estimates"
"forecasts", or variations of such words and phrases or statements
that certain actions, events or results "may", "could", "would",
"might" or will be taken occur or be achieved. Although
forward-looking statements and information contained in this
release are based on the beliefs of Tirex management, which we
consider to be reasonable, as well as assumptions made by and
information currently available to Tirex management, there is no
assurance that the forward-looking statement or information will
prove to be accurate. The assumptions made include assumptions
about Tirex's ability to move forward with the arrangements as set
out in the definitive agreement. The forward-looking statements and
information contained in this release are subject to current risks,
uncertainties and assumptions related to certain factors including,
without limitations, obtaining all necessary approvals, feasibility
of mine and plant development, exploration and development risks,
expenditure and financing requirements, title matters, operating
hazards, metal prices, political and economic factors, competitive
factors, general economic conditions, relationships with vendors
and strategic partners, governmental regulation and supervision,
seasonality, technological change, industry practices, and one-time
events as well as risks, uncertainties and other factors discussed
in our quarterly and annual and interim management's discussion and
analysis. Should any one or more of these risks or uncertainties
materialize or change, or should any underlying assumptions prove
incorrect, actual results and forward-looking statements and
information may vary materially from those described herein.
Accordingly, readers should not place undue reliance on
forward-looking statements and information contained in this
release. We undertake no obligation to update forward-looking
statements or information except as required by law.The six mineral
deposits which Tirex will contribute to OpCo are historical in
nature, and Tirex has not reported any mineral resource (as defined
in NI 43-101) and there are no NI 43-101 compliant technical
reports prepared in respect thereto.
"Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release."
Contacts: Tirex Resources Ltd. Bryan J.R. Slusarchuk CEO and
Director 604-687-7160 or Toll Free: 1-877-687-7160 604-687-7165
(FAX) info@TirexResources.com www.TirexResources.com
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