Tearlach enters into JV agreement with StellaTearlach enters into JV agreement with Stellar Pacific
Tearlach Resources Ltd TEA
Shares issued 10,223,470 Aug 23 2004 close $ 0.145
Monday August 23 2004 News Release
Mr. Malcolm Fraser reports
CHINA GOLD INTEREST
Tearlach Resources Ltd. has executed a joint venture agreement with Stellar Pacific Ventures Inc., a Quebec-based corporation, for the exploration and development of the Maying gold mine and contiguous mineral exploration licensed property located in the villages of Maying and Dizhang Xiang in Luoning county of Henan province in central China.
Henan province is the second largest gold producer in China, at 730,000 troy ounces in 2003 representing 14.7 per cent of Chinese production. The Maying mine is located in the Little Qingling gold region, which is a structurally controlled epithermal quartz-gold vein system displaying numerous subparallel gold-bearing veins over a structural width in excess of several kilometres. The region forms part of a northwest-trending major structural mineralized shear zone transecting China.
The Tearlach-Stellar joint venture is subject to regulatory approval. The terms of the Tearlach-Stellar joint venture require Tearlach to contribute to 50 per cent of past and future expenses under the terms of the option acquisition agreement entered into on April 14, 2004, between Stellar and Guan's Enterprises Ltd., a private British Columbia corporation holding the rights to enter into a Sino-Canadian joint venture corporation with the government of Luoning county in Henan province. Tearlach's portion of Stellar's past expenses is $33,482. Tearlach's proportion of future expenses for exercise of the option will be $35,000 (U.S.) and the issue of 750,000 shares of the company to Stellar in staged payments over the next 18 months. The Tearlach-Steller joint venture will be required to contribute $1,555,000 (U.S.) to the capitalization of the SCJVC prior to April 14, 2005. Tearlach and Steller will own 70 per cent of the SCJVC with full management rights and the right to earn an additional 10 per cent upon completion of an additional 85 million yuan ($13.15-million) on exploration.
The mining licence and two exploration licences , covering approximately 16 square kilometres of gold-bearing mineralization, are currently being transferred into the name of the SCJVC. The mining licence covers approximately five hectares and includes a 100-tonne-per-day operational mine and mill. All necessary infrastructures, including buildings, water supply, sewage, electricity and access roads are in place. An NI 43-101 report on the Maying mine and exploration licences was prepared by Jacques Marchand, PEng, of Quebec, and may be viewed on Stellar's SEDAR file.
Production from the Maying mine is currently suspended, pending completion within the next few weeks of transfer of the mining licence to the SCJVC. A review of the mine plan and milling procedures will be undertaken to optimize and possibly expand the current 100-tonne-per-day milling capacity. A longer-term exploration program will be conducted by the SCJVC to develop the gold resource to depth within the existing mine licence area and the contiguous exploration licence areas, which contain the strike extensions of the vein structures.
As China moves into the mainstream of world commerce, it has been lifting its internal restrictions on the exploration and development of its mineral resources by foreign entities and is encouraging development of its mineral resources through privatization. China is now the world's fourth largest producer of gold, increasing its production from 2.5 million troy ounces in 1992 to 13 million troy ounces in 2002, and is now almost equal in production with Canada. China is also the fourth largest consumer of gold, having freed up the ownership of gold by its citizens. China currently has many small gold mines employing over 20 million people. The majority of those mines are low production (less than 150,000 tonnes per day) and using old equipment and technology. Central government policy now favours consolidation of these small holdings into larger, more efficient production units employing modern facilities.
Precious metal exploration activity in China is rapidly expanding, particularly in the western regions, with the presence of many well-known companies such as Sino Gold Ltd., QGX Ltd., Southwestern Resource Corp., Central Asia Gold Ltd. and Ivanhoe Mines Ltd. Total mineral exploration expenditures in China are currently over $120-million (U.S.) yearly.
Tearlach is aggressively seeking new near production and advanced exploration properties in those mineral commodities, which it views as having the best long-term joint venture development opportunities.
WARNING: The company relies upon litigation protection for "forward-looking" statements.