2012-12-11 14:34:16 -
CALGARY, ALBERTA -- (Marketwire) -- 12/11/12 -- Teras Resources Inc. ("Teras" or the "Company") (TSX VENTURE:TRA)(OTCQX:TRARF) Teras is pleased to provide its shareholders with a corporate update on the Watseca and Cahuilla projects.
Teras is pleased to announce that it received a total payment of US$500,000 as partial payment pursuant to the purchase and sale agreement dated October 22, 2012 (the "Purchase Agreement") on the Watseca property in Madison County, Montana (the "Watseca Property") among Teras and a private arm's length purchaser (the "Purchaser"). Pursuant to the Purchase Agreement, Teras is selling its Watseca property for a cash price of US$3,000,000 (the "Purchase Price") with the following payment terms: (i) a non-refundable payment of US$500,000 has been paid; (ii) a payment of US$250,000 will be paid on the day that is 6 months after closing; and (iii) payments of US$250,000 will be paid on the first day of each calendar quarter commencing after the payment made in (ii) above until Teras has received the full Purchase Price. As a result of the payment terms, subject to increasing quarterly payments, the full payment of the Purchase Price for the Watseca Property is anticipated to be received by Teras 36 months after closing. If certain conditions in respect of the processing of ore on the Watseca property are met, quarterly payments will be increased to US$500,000, thus shortening the time period for receipt of the full payment of the Purchase Price.
Further definitive agreements, such as an escrow agreement ("Escrow Agreement") in respect of the transfer of the title to the Watseca Property, and an operating agreement governing the operations on the Wateseca Property, are in the process of being negotiated and finalized and are expected to be executed in the next 4 to 6 weeks. The disposition of the Watseca Property is subject to final TSX Venture Exchange approval.
Pursuant to the Purchase Agreement, Teras will deliver a warranty deed to the escrow agent under the Escrow Agreement which will transfer title to the Watseca Property only on the fulfilment of the terms and conditions as set forth in the Escrow Agreement, which conditions shall include the full payment of the Purchase Price as set forth above. In the event that there is a default by the Purchaser in respect of its obligations in the Purchase Agreement, including in respect of the quarterly payments as set forth above, after the expiry of a cure period of up to 30 days, the Purchaser will forfeit all rights and interests in the Watseca Property and the Watseca Property will revert, unencumbered, back to Teras. Upon such a default, all payments received by Teras to the date of such default remain non-refundable and shall be kept by Teras. The Purchaser, at its sole costs, will render improvements to the mill on the Watseca Property, and apply for all necessary permits to operate and process ore at the Watseca mill site. The Purchaser, at its sole cost, will pay for taxes in respect of the Watseca Property from 2013 going forward and the Purchaser, at its sole cost, shall carry full insurance covering any and all potential losses or environmental liabilities in respect of the processing of ore at the Watseca mill.
Teras has planned and developed an aggressive exploration and development program for the Cahuilla project during the remainder of this year and in 2013. Metallurgical test work has also begun on samples from the 2011/2012 drill program and will continue throughout 2013.
In addition, Teras has initiated a comprehensive geophysical program to focus on better identifying high grade feeder structures that represent the source of high grade veins and disseminated precious metal mineralization, which have been discovered at many other epithermal gold/silver deposits similar to Cahuilla.
Teras will also initiate a detailed geological study to better define further targets at Cahuilla with respect to precious metal mineralization. Emphasis will be placed on a detailed mineralization investigation to determine the relationship between lithology, alteration, and mineralization along with a detailed structural study to better define faulting and structural controls of mineralization.
Drilling is scheduled to begin in the first quarter 2013 with purpose of expanding the current NI 43-101 resource model and further identify high grade precious metal veins. Initial drilling will focus on the northeast and southeast portions of the project area outside of the current resource as illustrated on the map below where wide-spaced historical drilling has returned anomalous to ore grade gold values.
A map of the Cahuilla - First Quarter 2013 Drill Targets is available at the following address: media3.marketwire.com/docs/TRA121211_2013-Drill_targets.pdf
. : media3.marketwire.com/docs/TRA121211_2013-Drill_targets.pdf
Dr. Dennis J. LaPoint, a Registered Member of SME, Qualified Person under National Instrument 43-101 and a Director of Teras, states "On visiting the project for the first time, I was very impressed with the potential for Cahuilla to develop into a mine with a significant gold/silver resource. It is well located for development in terms of power, infrastructure, labor and easy access for mining. The current NI 43-101 report to be released in the near future has placed Teras on a firm basis with over a million ounce indicated resource (70.148 million tons at an average grade of 0.015 ounces per ton gold) and very significant potential to further expand the resource in ounces and grade along trend and at depth. The drill results and geologic model developed as part of the resource study are excellent to effectively plan further drilling. I am pleased with Teras' aggressive drilling and evaluation program designed to rapidly advance the Cahuilla project in 2013."
The scientific and technical information in this press release was prepared and approved by Dennis J. LaPoint, a Registered Member of SME, who is a Qualified Person under National Instrument 43-101 and a Director of Teras.
Teras is focused on developing its Cahuilla project located in Imperial County, California. The project encompasses an area of at least 3 km by 1.5 km and demonstrates the potential for a large-scale, bulk mining operation consisting of altered and mineralized sedimentary and volcanic host rocks with numerous sheeted high grade quartz veins. On November 30, 2012 Teras announced it received a NI 43-101 compliant indicated resource of 1 million plus ounces of gold and 11 million plus ounces of silver on its Cahuilla project (70.148 million tons at an average grade of 0.015 ounces per ton gold and 0.17 ounces per ton silver with a cutoff of 0.008 opt gold). The technical report will be filed on SEDAR in the near future. Teras has an aggressive plan to increase the resource and develop the project for future mining operations.
This press release may contain "forward-looking information" within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein may be forward-looking information. Generally, forward-looking information may be identified by the use of forward-looking terminology such as "plans", " expects" or "does not expect", "proposed", "is expected", "budgets", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. In particular, this press release contains forward-looking information regarding: the timing and payment of the Purchase Price for the Watseca Property; the execution of definitive agreements and the closing of the sale of the Watseca Property; the potential of the Cahuilla project; the potential to expand the resource at the Cahuilla project; the possible techniques to mine the Cahuilla project and to process the minerals mined from the Cahuilla project; the timing and results of future drilling at the Cahuilla project; the timing of and potential of drilling and exploration programs, surveys, studies, geological research and developments in respect of the Cahuilla project; the potential for finding high grade veins or deposits at the Cahuilla project; and future metallurgical work in respect of the Cahuilla project.
This forward-looking information reflects the Company's current beliefs and is based on information currently available to the Company and on assumptions the Company believes are reasonable. These assumptions include, but are not limited to, the ability of the Purchaser to process ore from the Watseca mill and make the payments set forth in the Purchase Agreement; the actual results of exploration projects being equivalent to or better than estimated results in technical reports or prior exploration results; future costs and expenses being based on historical costs and expenses, adjusted for inflation; continued success in drilling and exploration programs at the Cahuilla project; successful studies in mining techniques and metallurgy; commodity prices continuing at today's prices or rising; obtaining the necessary funding to carry out recommended work programs, exploration and studies at the Cahuilla project; and continued success in obtaining permits. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: the early stage development of the Company and its projects; general business, economic, competitive, political and social uncertainties; commodity prices; the actual results of current exploration and development or operational activities; competition; changes in project parameters as plans continue to be refined; accidents and other risks inherent in the mining industry; lack of insurance; delay or failure to receive board or regulatory approvals; changes in legislation, including environmental legislation, affecting the Company; timing and availability of external financing on acceptable terms; conclusions of economic evaluations; and lack of qualified, skilled labour or loss of key individuals. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
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 of accuracy of this news release.
Teras Resources Inc.
(403) 262-8411 or (403) 852-0644 firstname.lastname@example.org