Noranda signs on with Aripuana juniors — Major joins Ambrex, St. Genevieve and Ourominas in Brazil

The Aripuana base metals project in Brazil has attracted the attention of a Canadian major.

Noranda (NOR-T) has signed a letter of intent to invest up to $28.9 million in Aripuana in order to gain up to a 70% interest.

Noranda has agreed to spend $2 million on exploration prior to April 30, 1998, and possibly fund the project up to delivery of a feasibility study.

The 20-sq.-km. Aripuana property, situated in northwestern Mato Grosso state, has a long history of gold exploration, most recently under the ownership of Consolidated Madison Holdings, which has since been renamed Ourominas Minerals (OMI-T).

Ambrex Mining (AMBX-C) is in the process of earning a 49% interest in the Aripuana project, and its work has been partially bankrolled by its largest shareholder, St. Genevieve Resources (SGV-T), which, itself, is earning a 21% interest in Aripuana.

To earn an initial 55%, Noranda has agreed to contribute the following: * $2 million in exploration spending during the remainder of this year; * a $650,000 payment in 1997 and $150,000 in early 1998 to cover property payments to local garimpeiros (artisanal miners);

* a cash payment of US$800,000, at the time of a production decision, to previous owners;

* further exploration expenditures, to December 1999, of $10 million; and * a final $3-Million pro rata cash payment to its joint-Venture partners at the time of a production decision.

After these expenditures, Noranda will have earned a 55% interest, leaving Ambrex with 22.05%, Ourominas with 13.5% and St. Genevieve with 9.45%.

To earn a further 15%, Noranda has agreed to spend $12 million on a feasibility study. In that event, Noranda will have earned 70%, leaving Ambrex with 14.7%, Ourominas with 9% and St. Genevieve with 6.3%.

The agreement calls for Ambrex either to provide or supervise on-site work, though Noranda will be the official project operator.

Ambrex discovered the Aripuana volcanogenic massive sulphide deposit in September 1996 during the first phase of its planned exploration program, which, to date, has examined only a third of the property. An independent consulting firm has since calculated a 10-Million-Tonne potential, and a formally calculated resource of 2 million tonnes grading 10.7% zinc, 2% lead and 87.5 grams silver per tonne for the portion of the property known as the Valley deposit.

To date, the Valley deposit has been drilled to a depth of 300 metres and along strike for 225 metres. It remains open at depth and along strike in both directions. The geophysical data indicate the deposit extends to at least 600 metres below surface.

The North Ridge copper-gold deposit has been drilled as well, and several magnetic and geochemical anomalies have been identified to the west, east and northeast of North Ridge.

“We are oriented toward base metals, and, in our opinion, this was an outstanding exploration opportunity in a newly emerging area,” Noranda’s vice-president of exploration, David Stevens, said of his company’s decision to join the project.

“We wouldn’t go to a property if we thought the potential was for only 10 million tonnes. There’s a substantial area along strike that remains to be explored. The drilling and exploration to date have been on only a small portion of that favorable zone.”