Tara Gold Resources Corp. (OTC: TRGD), a development stage company, engages in the exploration and development of mining properties primarily gold and precious metals in Mexico. It has 100% interest in the La Estrella mining concession, totaling 59 hectares located in the Sierra Madre Gold-Silver belt, Mexico. The company has options to acquire 100% of the assets and concession rights in La Currita property in Chihuahua, Mexico, a set of 3 mineral concessions, including 4 mines and a 150 ton a day flotation mill for processing ore; 100% of the rights to 12 undeveloped concessions, known as San Miguel located in Chihuahua, Mexico; 60% interest in La Millionaire, a set of 4 mineral concessions on approximately 2,162 acres in Chihuahua, Mexico; and certain assets and rights to 4 mining claims located in Guazapares, Chihuahua, Mexico, known as the La Blanca property. The company was incorporated in 1999. It was formerly known as American Stellar Energy, Inc. and changed its name to Tara Gold Resources Corp. in February 2006. Tara Gold Resources is based in Wheaton, Illinois.
CHICAGO, IL, Jul 26, 2006 (MARKET WIRE via COMTEX News Network) -- (PINKSHEETS: TRGD) (FRANKFURT: T8N) Tara Gold Resources Corp. is pleased to announce that it has entered into an Option Agreement with Lateegra Gold Corp. (TSX-V: LRG) (FRANKFURT: LTG) to acquire up to a 70% interest in the Picacho Gold Mine. Picacho is located within the Northern Sierra Madre Gold Belt, 120 kilometers south of the United States Border, in Sonora State, Republic of Mexico.
The Picacho mine, a 3,236 hectare mining concession, is 24km by haulage road from Bacoachi, a town with a population of approximately 2000 people serviced by the national electrical grid, a 1200m airstrip, a paved highway accessing the nearby mining town of Cananea and the State capital of Hermosillo.
The previous owners have been exploiting an up to 5 meter wide vein structure for the past three years by driving a 5 meter by 5 meter ramp declining 8% extending over 1km in length. Production comes from several working faces averaging 4-6 meters in width, dipping at 700, with very competent hanging wall conditions. The owner reported, and the company has verified, ore grades averaging 5 grams gold and 15 grams silver. The structure that hosts the mineralization is 85% silica creating a tailings product that is being sold as a flux agent to the local smelters for US$35.00/tonne, an amount that is estimated to generate sufficient revenues to cover current mining and milling costs. Management believes the ore body width, dip, and hanging wall competency will offer very good flexibility by allowing for a variety of mining methodologies that can be employed to contribute enhanced efficiencies and minimize pillar volumes and dilution.
Lateegra has commissioned three separate site visits to the Picacho property with several samples being taken under the supervision of 43-101 qualified persons Michael Sandidge P.Geo, Jeffrey Reeder P.Geo and James McCrea P.Geo. The samples tabulated below were random, representing both the structure and the wall rock. Results as obtained from samples:
Sample No. Au (g/t) Ag g/t Site Sample No. Au (g/t) Ag g/t Site 16476 1.315 9.3 MP 0004-06 3.86 4.5 UG 16477 0.57 3.8 MP 0005-06 0.354 6.9 DAV 16478 0.258 4.0 MP 1 0.018 1.9 UG 16479 0.451 13.9 MP 2 0.049 0.6 UG 16480 5.72 31.1 UG 3 1.31 2.9 UG 16481 7.82 22.3 UG 4 0.041 1.4 UG 16482 29.9 53.2 GF 5 1.59 11.1 UG 16483 2.42 12.0 OP 6 3.66 23.9 UG 16484 2.37 9.4 OP 7 0.258 1.6 UG 16485 3.93 12.0 OP 8 6.17 15.3 UG 0001-06 6.47 26.2 OP 9 5.85 11.4 UG 0002-06 2.56 7.6 UG 10 0.135 5.4 UG 0003-06 1.565 4.4 UG 11 7.88 43.1 UG
The samples were collected and transported by independent consultants to ALS Chemex Laboratory (Chemex) in Hermosillo, Sonora, Mexico, (a laboratory certified by ISO 9002).
The purchase of the mine includes an extensive processing facility currently capable of 250 tonnes/per day of ore throughput. The mill includes a 1500 tonnes/day jaw crusher, a 500 tonnes/day cone crusher, 2 ball mills, 2 floatation cells (400 tonnes/day), 2 caterpillar gen-sets and a large shop facility. The rolling stock consists of 3 Wagner ST8 scoop trams, a Gardner Denver 2 boom pneumatic jumbo, a stationary hydraulic exploration drill, 2 compressors, 2 Cat D8 and D9 dozers, a Clarke Michigan front end loader, 1 track loader, haul trucks and ancillary mining equipment. The equipment is in good serviceable condition and operations can continue while a scoping study is performed to recommend various optimization scenarios for plant and equipment upgrading.
The Picacho Project is interpreted as a low sulfidation epithermal gold-silver system hosted in a Middle-Upper Tertiary "caldera complex" of silicified andesites and andesitic tuffs intruded by nearly contemporaneous rhyodacites, diotites, and andesitic breccias. This "caldera complex" is part of a volcanic regime covering northern Sonora and Chihuahua States of Mexico overprinting a NW-SE trending Lower Tertiary porphyry copper belt hosting Mexico's largest copper deposits, Cananea and La Caridad. The property is structurally delineated by NW-SE, N-S and NE-SW fault and fracture trending structures traced for over 5kms and potentially representing a reactivation of older structures, developing an extensive vein system hosting gold and characterized by multiphase banded quartz and sulfide stockwork veining with hydrothermal brecciation within intensely silicified andesitic volcanics.
A new zone of intense alteration comprised of vuggy silica, discovered in recent workings, represents a near surface heap leach-able gold target that is believed to be related to the structure currently being mined on strike more than 2 km away. The new zone will be drill tested as part of a resource definition program.
Low sulfidation systems of this type, under favorable conditions, have formed large bulk tonnage gold deposits including the 42million oz Lihir Deposit in Papua New Guinea, the 16million oz Zhao-Ye Deposit in China, the 5million oz Kori-Kollo Deposit in Bolivia, and the 18millon oz Cadia East Deposit in Australia.
The terms of the option agreement to earn an initial 65% interest in the project is as follows. Lateegra will make staged escalating payments to the vendors totaling $7,325,000 over a 5-year period plus an additional $100,000 per year on the anniversary of the agreement for the term of the JV. Lateegra will also commit to spending $1,000,000 in exploration and $2,000,000 on mine development and production plant enhancements within 18 months of the signing of the agreement as well as issue Tara Gold 50,000 shares per month for a period of 12 months. Once Lateegra has earned the 65% interest a Joint venture will be formed and a standard dilution clause will be in effect. As a basis for the dilution clause, each party will be deemed to have invested the following amount of money in the Picacho Groupings, Lateegra US$10,325,000 (representing its 65% interest); and Tara: US$5,600,000 (representing its 35% interest). In the event a participant has been diluted down to a 10% interest, this interest will automatically convert into a 3% N.S.R. and the joint venture agreement will become null and void. For a period of no longer then 1 year, the 3% NSR can be reduced to 1% by any partner in exchange for a US$2,000,000 payment for each 1% increment. It is also agreed that Lateegra will have an 18 month option to increase its interest in the Picacho Groupings to 70% thereby reducing Tara's interest in the Picacho Groupings to 30%, whereby the price for the 5% will be determined based on a sliding scale of daily production averaged over 3 months.
Mr. Francis Biscan Jr., President of Tara Gold Resources stated, "We welcome Lateegra as a partner to expand and operate the Picacho mine. Cash flow from the mine will benefit our shareholders and provide non-dilutive cash to continue to build our project portfolio with high quality prospects."
The above proposed transaction is subject to TSX Venture Exchange approval. The technical information in this news release has been reviewed by Michael Sandidge, P. Geo, a Qualified Person as defined in national policy 43-101 and acknowledges that the property specific data is historical and believed to be accurate but should not be relied on.
About Lateegra Gold Corp.
Lateegra Gold Corp. is a mineral exploration and development company with a mandate to build a significant portfolio of mineral exploration and development properties in Latin America.
About Tara Gold Resources Corp.
Tara Gold Resources Corp. is a precious metals exploration and development company with existing production. Management is focused strongly on building the mining production base and becoming a significant gold, silver and mineral producer. Tara gold continues to acquire advanced-stage projects and/or producing mines. For more information, please visit the Company's web site at: www.taragoldresources.com
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained herein which are not historical are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, certain delays beyond the company's control with respect to market acceptance of new technologies or products, delays in testing and evaluation of products, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission
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