TSX-V: ORS October 9, 2009 - Orestone Mining Corp. (“Orestone” or the “Company”) announces that it has entered into an arm’s length letter agreement (the “Letter Agreement”) dated October 8, 2009 with Intuitive Exploration Inc., a private British Columbia company (“Intuitive”), for the acquisition of 50% of Intuitive’s interest in certain mineral exploration properties in the Skeena Mining Division, Stewart Gold Camp, in northwestern British Columbia and known as the Todd and Funk properties. Intuitive’s interests in these properties are held pursuant to two option agreements.
The Todd property option agreement, dated April 3, 2008 (the “Todd Agreement”), is made among Intuitive, Goldeye Explorations Limited (“Goldeye”), Polar Star Mining Corporation (“Polar”) and Geofine Exploration Consultants Ltd. (“Geofine”). Pursuant to the Todd Agreement, Intuitive has the right to acquire up to a 70% interest in the Todd property by incurring certain expenditures on the Todd property, making certain property payments to Geofine and issuing certain shares to Geofine. In order to earn an initial 51% undivided interest in the Todd Property, Intuitive is required to commit to expend a further $300,000 on the Todd property (in addition to the $2.2 million it has already spent), pay $140,000 to Geofine and issue 130,000 shares of Intuitive to Geofine by October 31, 2009.
The Funk property option, dated August 19, 2008, is made among Intuitive, 802213 Alberta Ltd. and Kelly Brent Funk (the “Funk Agreement”). Pursuant to the Funk Agreement, Intuitive has the right to acquire up to a 100% interest in the Funk property by making payments aggregating $450,000 and issuing 350,000 shares of Intuitive to 802213 Alberta Ltd. over a five year period expiring October 31, 2013. A total of $25,000 has been paid and 25,000 shares of Intuitive issued to date. A further payment of $40,000 and issuance of 40,000 Intuitive shares is due on October 31, 2009.
pursuant to the Letter Agreement, Orestone may earn 50% of the interests held by Intuitive in the Todd and Funk properties and option agreements by: (i) expending $500,000 on the Todd and Funk properties prior to December 31, 2009 (of which $300,000 is to be committed by October 31, 2009 for expenditure by December 31, 2009); (ii) paying $140,000 to Geofine by October 31, 2009; and (iii) paying $40,000 to 802213 Alberta Ltd. by October 31, 2009. Upon Orestone making the foregoing expenditures and payments and upon Intuitive issuing certain shares in compliance with its obligations under the Todd and Funk Agreements, Orestone will have earned an undivided 25.5% interest in the Todd property (equal to 50% of Intuitive’s 51% interest) as well as a 50% interest in Intuitive’s option to acquire a 100% interest in the Funk property.
The Letter Agreement is subject to Goldeye and Polar not exercising their right of first offer held pursuant to the Todd agreement, which right expires 15 days from the receipt of notice by Goldeye and Polar from Intuitive setting out the terms and conditions of the Letter Agreement. In the event Goldeye and Polar exercise their right of first offer, the Letter Agreement will be terminated and be of no further force or effect.
The Todd and Funk properties are located about 35 Km northeast of Stewart BC and comprise a total of 19,467 Ha. The Todd Creek property occurs within the Stewart Gold Camp developed within the favorable Hazelton Group stratigraphy and associated suites of intrusions. This geological environment hosts many large and significant mineral deposits including the Granduc, Eskay Creek, Silbak-Premier and Kerr/Sulphurets/Mitchell zones. The property is roughly 9 Km east of discoveries recently announced by Decade Resources Ltd. Historical exploration on the property by Noranda Mining identified a non-43¬101 compliant resource of about 30,000 ounces of gold. A qualified person has not done sufficient work to classify this historical estimate as current mineral resources or mineral reserves and the Company is not treating the estimate as such. Readers are cautioned that the historical estimate should not be relied upon. The style and grade of mineralization was confirmed by Intuitive drilling and remains open along strike and at depth. More recent work has demonstrated alteration and mineralization consistent with potential for porphyry-style copper and gold mineralization. During the 2008 exploration season Intuitive geologists identified geology and mineralization indicative of Kuroko-type volcanogenic massive sulfides. This favorable geology has been traced for more than 7 km of strike and it has never been drilled or investigated by geophysics.
The $500,000 in expenditures on the property contemplated by Orestone will be used to assay roughly 450 surface rock samples, compile historical data and fund a significant helicopter-borne magnetic and Electromagnetic (EM) survey to investigate the porphyry and VMS potential of the property. The Company anticipates that the geophysical survey results will be useful in mapping subsurface geology, including prospective intrusive bodies, as well as directly identifying conductive bodies such as would be expected from massive sulfide mineralization.
The Company also announces that it intends to complete a non-brokered private placement to raise a minimum of $600,000 to a maximum of $900,000 through the sale of units (“Units”) at a price of $0.10 per Unit. Each Unit will be comprised of one common share and one-half of one share purchase warrant, each whole warrant entitling the holder to purchase one additional common share for a period of two years at a price of $0.15 per common share. Finder’s fees may be payable as permitted under the policies of the TSX Venture Exchange. Proceeds of the private placement will be used to finance exploration programs on the Company’s mineral projects and for general working capital. The private placement is subject to the acceptance of the TSX Venture Exchange.
Upon completion of the private placement and transactions described in the Letter Agreement, Gordon Richards and Brian Kent Bowen will be resigning from the Board of Directors. Replacing Messrs. Richards and Bowen on the Board will be Robert Perry and Herrick Lau. Mr. Perry is a Certified Professional Geologist with more than 30 years of exploration experience in the western US, Canada, Europe and South America and is the Vice President Exploration of Intuitive. Mr. Perry discovered the Beartrack Gold mine in Idaho as well as two uranium mines in Colorado. Mr. Lau is currently Vice President, Corporate Finance of Baron Group Canada and is an experienced investment banking professional. Mr. Lau also has experience as a finance executive in publicly traded and private companies. His industry practice involves developing financing strategy, devising business development plans and maintaining compliance with corporate governance. Mr. Lau is a Chartered Financial Analyst (CFA) charter holder and has a Master degree in Finance and a Bachelor degree in Business Administration at Simon Fraser University.
Robert Perry, PGeo, is a qualified person as defined in National Instrument 43-101, and has reviewed and approved the technical information forming the basis for this release.
Orestone is presently exploring three large claim blocks in northern B.C. within Quesnel Terrane, which extends from the US border to northern B.C. Quesnel Terrane hosts numerous mines and many developing bulk tonnage Cu-Au prospects such as those on the Mt. Milligan and Kwanika properties in north-central B.C., as well as sediment-hosted gold mineralization on the Spanish Mountain and Frasergold properties in south-central B.C. For further information contact Gordon Richards, the President of Orestone, at (604) 940-6466 or Jim Mitchell, a director of Orestone, at 1-604-796-9418.
ON BEHALF OF THE BOARD OF DIRECTORS OF ORESTONE MINING CORP.
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. This news release has been prepared by management and no regulatory authority has approved or disapproved the information contained herein.