Mindoro cuts high gold grades at Lobo (May 26, 2003)

Vancouver The initial results from an on going drill program by Edmonton-based Mindoro Resources (MIO-V) have confirmed the economic potential of the promising Lobo project on the island of Luzon in the Philippines.

Located in the province of Batangas, the property has long been considered prime hunting ground for high-grade copper and gold mineralization. The history of the project dates back to the early 1900’s when the Lobo copper deposit was discovered along the Sampson structural zone. Development however, did not start until 1944 when Pan Philippine developed the project for barite. In 1966, the property was taken over by Copper Belt Mining and developed for copper. Between 1966 and 1969 the mine produced 604 tons of copper, 47.18 kg of gold and 955.75 kg of silver. Since 1969, the property has lied dormant as foreign firms elected to stay away from the country due to draconian mining laws, political unrest and tenement issues.

In 2002, Mindoro inked a deal to earn a 51% stake in the property by spending US$1.5 million over three years and issuing 500,000 shares to a privately held Philippine company. It can then earn an additional 24% by issuing another 500,000 shares and taking the project to the feasibility stage. On completion of a feasibility study, the private company gets a further 500,000 shares.

The Sampson vein contains classic "El Indio" style pyrite-enargite-tetrahedrite veins. Production and reserves at El Indio total 23.2 million tonnes averaging 4% copper, 6.6 grams gold and 50 grams silver per tonne. El Indio also produced 191,000 tonnes of direct shipping ore that averaged 209 grams gold.

The Lobo mine are is underlain by andesitic flow. The vein strikes north 60 degrees east and dips at 60 degrees northwest. In outcrop, the zone is made up of barite and quartz, with occasional copper oxides.

Earlier this year, Mindoro completed a gridding, prospecting, trenching, and rock-geochemical sampling over the project. The reconnaissance work outlined another major epithermal vein systems some 800 metres away. Dubbed Camo, the trend extend for at least 600 metres with widths ranging up to 20 metres. The highest trench values came from the SW Breccia zone in the southwestern part of the Camo trend and became the initial target of the current drill campaign.

The first hole tested the downdip extension of mineralization at the Dita 1 trench (24.7 grams gold and 2.1 grams silver per tonne over 14.5-metre) and returned 2.84 grams gold over 0.9 metre.

Moving 25 metres to the east, hole 2 failed to return any significant values. The company believes that these holes were drilled into an erosional window and that drilling further down, and along, slope will intersect the mineralization.

Some 61 metres to the north, hole 3 tested the down dip extension of mineralization discovered in Dita trench 2 (11 metres grading 19.1 grams gold). Drilled at a 45-degree angle, the hole collared in mineralized quartz-barite-sulphide breccia with the first 13.3 metres grading 8.32 grams gold. Included in this section was a higher-grade portion running 17 grams gold over 4.1 metres.

Hole 4 was collared from the same site and drilled in an easterly direction, slightly oblique to the dip of the mineralized breccia, at a 70-degree angle. Once again, the hole encountered mineralization from surface down to a depth of 17.85 metres, yielding a value of 9.62 grams gold. Included in this section was a 2.9 metre portion running 23.56 grams gold.

Drilled from the same site, hole 5 was drilled in the westerly direction at an angle of 70 degrees; sub parallel to the dip of the mineralization. The hole cut the favourable quartz-barite-sulphide breccia from surface to 5.9 metres returning 3.43 grams gold. This mineralization was followed by infaulted, altered andesite, gouge and hydrofractured andesite to 24.5 metres. The quartz-barite-sulphide breccia was then again intersected down to a depth of 68 metres. Partial assay results down to a depth of 38.3 metres have yielded 14.28 grams gold over 13.8 metres. A 10-metre zone of sulphidic siliceous breccia, with base-metal sulphides, was cut at 74 metres downhole. The complete assay result for the hole is expected shortly.

The mineralization within SW Breccia zone is described as a classical epithermal, gold-rich, low-sulphidation mineralization overprinted onto an earlier, copper-gold high-sulphidation style. The zones occur as pods or lenses, so a considerable amount of drilling will be required to define the mineralization. Mindoro plans to add a second drill rig to Lobo in the next few months.

Meanwhile, work carried out during due diligence at the nearby Archangel project has outlined an alteration system measuring 1.5 by 3 km. The system is characteristic of a porphyry copper-gold deposit and features at least six widely distributed copper oxide showings. Previous operators also defined extensive and strong copper soil anomalies. The targets have yet to be drill-tested.

Earlier this year, Mindoro tabled an inferred resource of 17 million tonnes running 0.7 gram gold and 2.5 grams silver per tonne for the Kay Tanda epithermal gold zone, also on the Archangel property.

Mindoro has 26.2 million shares outstanding, 38.3 million shares fully diluted.