VANCOUVER, Jan. 12 /CNW/ - Goldrea Resources Corp. (GOR-TSX.V) reports
the company has entered into a Letter of Intent with Rushan City to purchase
up to a 100% interest in their operating 1,750 TPD Daye Gold Mine located
approximately 30 km northwest of Rushan City, Shangdong Province, China.
Goldrea currently has the option to earn a 74% interest in mineral
licenses along strike and downdip from the Daye Gold Mill and open pit. Recent
drilling by Goldrea has established gold grade up to 8 grams per tonne gold
over 4 meter widths 600 meters downdip and to the south of the existing open
pit.
The Daye Mine is currently operating from two declines and one shaft at
the open pit and is mining the remaining ore down to the 150 meter level where
Goldrea's joint venture interest begins. Also the Daye Mine is processing ore
from a small open pit grading 1g/tonne located 35 km from their existing
operation. Material from other gold mining operations in the vicinity is also
being custom milled for other mining companies in the vicinity. Production
from the open pit averaged approximately 60,000 ounces/year before reaching
the end of the pit life.
The Daye Mine is owned 100% by the Rushan City municipal government and
the Letter of Intent grants Goldrea the right to carry out a due diligence on
all of the Daye assets and an evaluation of the operation up to June 30, 2006
with negotiations and purchase of the Daye Mine and its interest in
subsidiaries of Daye by October 30, 2006. The potential purchase has resulted
from a desire by China to privatize gold operations within the country.
Currently the Daye Mine has 701 employees including 125 mining technicians.
Hospitals and schools are within 1 - 3 km of the mine site with onsite
barracks for single employees. The rest of the employees are living within the
surrounding villages.
The purchase of the Daye Gold Mine would include interests in three other
enterprises as follows:
1) Daye Gold Mine owns 25% of the sericite recovery operations from
tailings located on the Daye mine site. The gold ore being mined
on the Daye property reportedly contains approximately 25%
sericite with a value of $45.00 US/tonne.
The other interests are held by the Hunan Nonferrous Metal
Research Institute as to 30% and Junze (Hong Kang) Investment Co.
Ltd. for 45%.
The sericite operation employs 48 people.
2) The Daye Gold Mine has a 30% interest and the Weihai Boiler
Factory has a 70% interest in the fabrication of air entrained
concrete blocks from tailings. One hundred and twenty employees
are involved in the production and sales division.
3) Daye Gold Mine owns a 25% interest in the Rushan Yuandong Steel -
Casting Co., Ltd. with Shaugang Andagongmao Co. Ltd. as to 40%
and Hong Kang Nanyi Developing Co., Ltd., having a 35% interest.
The Company is primarily involved in the manufacture of steel balls used
in ball mills through out the mining industry.
The Daye Mine is strategically located within senior water and power
rights giving the owners a leading advantage to be involved with mining
operations and deposits within a 50 km radius.
Recent exploration by Goldrea has indicated significant mineralization is
located along strike and downdip from the existing operations. Goldrea views
the purchase of the Daye Mine an excellent opportunity to establish the
company as a prominent foreign miner in China.
ON BEHALF OF MANAGEMENT
"Larry W. Reaugh"
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Larry W. Reaugh,
President and C.E.O.
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The TSX-Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release. This news release
may contain certain "Forward-Looking Statements" within the meaning of Section
21E of the United States Securities Exchange Act of 1934, as amended. All
statements, other than statements of historical fact, included herein are
forward-looking statements that involve various risks and uncertainties. There
can be no assurance that such statements will prove to be accurate, and actual
results and future events could differ materially from those anticipated in
such statements. Important factors that could cause actual results to differ
materially from the Company's expectations are disclosed in the Company's
documents filed from time to time with the Toronto Venture Exchange, the
British Columbia Securities Commission and the US Securities and Exchange
Commission.
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