|December 02, 2010|
Indico Resources Closes $4,000,000 Private Placement, provides Update on Ocaña Property Option and Appoints New Director
|Vancouver, British Columbia - Indico Resources Ltd. ("Indico") wishes to provide an update to its news release dated September 14, 2010 wherein Indico announced that it has been granted the exclusive option to acquire a 100% indirect interest in the Ocaña Copper Gold Porphyry Project located in South-Central Peru.|
Indico has now received TSX Venture Exchange (the "Exchange") acceptance to the Share Purchase Option Agreement (the "Option Agreement") dated September 9, 2010, between Indico's Peruvian subsidiary, Indico Peru S.A.C., and Manilo Bassino Pinasco and Percy Samaniego Pimentel (the "Vendors"), to acquire a 100% interest in the Ocana Project. In order to earn a 100% interest, Indico must pay to the Vendors a total of US$17.75 million cash (US$390,000 payable on closing and US$310,000 on or before April 20, 2011) and issue an aggregate of 8,500,000 common shares (200,000 shares on or before April 20, 2011), over a period of five years.
The Ocaña Project consists of 22 concessions covering 110.24 km2 and is located on the northwest extension of the Southern Peru Porphyry Copper Belt, a trend defined in part by the Toquepala, Quellavaca, Cuajone, and Cerro Verde Mines to the southeast. Recent exploration of the belt has resulted in discovery of the Zafranal copper porphyry deposit, located approximately 75 km to the southeast of the Ocaña Project.
Indico retained Paul Klipfel, Ph.D., Consulting Economic Geologist, of Reno, Nevada, to complete the Technical Report on the Ocaña Project. This report is written in compliance with requirements of National Instrument 43-101 and Form 43-101F1 and is in support of documentation filed with the Exchange in support of Indico's entering into the Option Agreement. Mr. Klipfel is a Qualified Person for the purpose of Canadian NI 43-101, Standards of Disclosure for Mineral Projects.
The report provides a detailed summary of the geology, history and exploration of the Ocaña Project. The report is available at www.sedar.com and will be added to Indico's website at www.indicoresources.com.
As a condition to the closing of the Option Agreement, Indico has also completed its non-brokered private placement totalling $4,000,000. These funds were raised through the issue by Indico of 10,000,000 units at a price of $0.40 per unit, each unit consisting of one common share and one-half of one share purchase warrant. Each whole warrant entitles the holder, on exercise, to purchase one common share at a price of $0.60 until November 19, 2011, subject to Indico's right to accelerate the exercise of the warrants if the closing price of the Indico's shares on the TSX Venture Exchange is equal to or exceeds $1.00 per share for a period of 20 consecutive trading days between March 20, 2011 and the date of expiry of the warrants.
Total commissions of $20,000 and 200,000 units were paid by Indico to agents as consideration for arranging the private placement, each unit consisting of one common share and one-half of one share purchase warrant, of which one whole warrant entitles the agent to purchase one common share of Indico at a price of $0.60 until November 19, 2011. Indico also issued agent's warrants, which entitle the agents to purchase up to 250,000 common shares of Indico at a price of at a price of $0.60 until November 19, 2011.
The securities issued pursuant to this offering, and any common shares to be issued upon the exercise of the warrants and agent's warrants, are subject to a hold period expiring March 20, 2011.
A portion of the proceeds of the private placement will be used to fund the initial option payments due to the Vendors (US$390,000) and to undertake the proposed work program on the Ocaña Project. The balance of the proceeds will be used for general working capital purposes.
Planned Work Program
Indico intends to rapidly advance the Ocaña Project to the drill stage. The exploration program will include detailed geological, structural and alteration mapping in tandem with detailed geochemcial sampling and trenching.
A ground magnetic survey is current being designed to target observed northwest-trending magnetite bearing veins and silicified zones. This will help identify structural fabric and map magnetic intrusions and/or magnetite alteration. An Induced Polarization (IP) survey is also planned to define zones of sulphide mineralization.
A budget of $3.4M is proposed for Phase 1, which will take the project from the surface exploration phase through to initial drilling.
Appointment of New Board Member
Effective December 1, 2010 Indico has appointed Susannah Coille Van Alphen to its board of directors and as a member of its audit committee. Ms. Van Alphen is currently working with Cardero Resource Group in their corporate development team. She has industry and investment banking experience through working with a leading public institution and one of Canada's largest independent investment dealers. In these roles, Ms. Van Alphen was involved in public and private equity transactions and negotiating mergers and acquisitions. Ms. Van Alphen holds a Masters in Business Administration from the Richard Ivey School of Business at the University of Western Ontario, graduating with distinction.
Granting of Stock Options
Indico pursuant to its incentive stock option plan, has granted incentive stock options to certain directors, allowing them to purchase up to a total of 100,000 common shares in the capital stock of Indico. The options are exercisable at a price of $0.84 per share for a period of two years ending December 2, 2012.
About Indico Resources Ltd.
Indico Resources Ltd. is a Canadian exploration company focussed on the resource sector in South America. The Ocaña Porphyry Project is Indico's primary exploration project and the main focus of exploration activities.
For further details on Indico, readers are referred to the Canadian regulatory filing on SEDAR at www.sedar.com.
ON BEHALF OF THE BOARD OF DIRECTORS
INDICO RESOURCES LTD.
Gary Freeman, President & CEO
Neither 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 release.
This press release contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward looking information" within the meaning of the British Columbia Securities Act and the Alberta Securities Act. Generally, the words "expect", "intend", "estimate", "will" and similar expressions identify forward-looking information. By their very nature, forward-looking statements are subject to known and unknown risks and uncertainties that may cause our actual results, performance or achievements, or that of our industry, to differ materially from those expressed or implied in any of our forward looking information. Statements in this press release regarding Indico's business or proposed business, which are not historical facts are forward-looking information that involve risks and uncertainties, such as estimates and statements that describe Indico's future plans, objectives or goals, including words to the effect that Indico or management expects a stated condition or result to occur. Since forward-looking statements address events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. All of the Company's Canadian public disclosure filings may be accessed via www.sedar.com and readers are urged to review these materials, including the technical reports filed with respect to the Company's mineral properties. The foregoing commentary is based on the beliefs, expectations and opinions of management on the date the statements are made. The Company disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise.
You can view the Next News Releases item: Mon Mar 7, 2011, Indico Identifies Two Large Copper-Moly-Gold Porphyry Targets at Ocaña Project, Southern Peru Porphyry Belt
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